KUALA LUMPUR, March 25 (Bernama) — Malaysia remains a preferred destination for foreign direct investment in the region and has attracted increasing interest from multinational corporations (MNCs) aiming to diversify their footprint strategically, says DHL Express Malaysia and Brunei managing director Julian Neo.
Due to the recent geopolitical developments, omni-sourcing has been a key focus for companies across industries as it strengthens supply chain resiliency, he said.
“Contract manufacturers continue to move into the country and we have observed similar expansion by those already here,” he replied to a Bernama question via email.
Citing news report, Neo said Penang alone has attracted over RM60 billion (US$12.68 billion) in foreign direct investment (FDI) last year, more than the total received for 2013 to 2020 combined.
He said Malaysia’s key strengths include easy access to key Asian markets, robust consumer demand for international goods and services, institutional support, well-developed infrastructure, sound legal framework, English-speaking and digitally native talent, as well as liberal trade agreements.
“Therefore, it is no surprise that the country is rated among the best for globalisation,” he added.
According to DHL Group’s latest Global Connectedness Report launched on March 13, 2024, Malaysia ranks 26th out of 181 economies, attributable to the growth of its trade flows (imports and exports, across both goods and services) and increases in FDI flows (inward and outward).
Asked if the six per cent service tax on logistics services which came into effect on March 1, 2024 would affect the company’s business in the country, Neo shrugged off the concern, saying that the service tax only applies to domestic shipments and excludes international ones, which is the main remit of DHL Express Malaysia.
“Regardless, implementation of the service tax has long been a topic of conversation within the logistics industry and we remain in close dialogue with the relevant authorities.
“At the same time, we have maintained open lines of communication with customers to provide the necessary guidance and support towards a smooth transition,” he added.
Setting foot in Malaysia since 1973, DHL Express now has more than 60 per cent time definite international (TDI) market share in the country, while its market shares on the regional and global fronts are around 57 per cent and 43 per cent respectively.
With Malaysia’s gross domestic product (GDP) expected to grow at a faster rate of four to five per cent in 2024 versus 3.7 per cent last year, Neo said the company anticipated demand to rebound quickly in the first half of the year while the economy picks up speed again in the second half of the year.
“The year 2023 saw a post-pandemic world confronted with economic and geopolitical challenges, both far and close to home, and these factors are creating more volatility overall and we see them accompanying us into 2024.
“Against this backdrop, our forward-looking approach to capacity planning, price adjustments and efficiency measures ensured the resilience of our business model,” he said.
On DHL Express Malaysia’s expansion plan in the country over the next five years, Neo did not disclose much but reiterated that the company has continuously invested in its service quality, prioritising its nationwide network capacities, low-emission logistics infrastructure and vehicle fleet, as well as digitalisation such as automation, artificial intelligence (AI) and big data to enhance operational efficiency and customer experience.
On the sustainability front, Neo said DHL Express possesses 52 electric vans and seven electric motorcycles involved in pick-up and delivery, and it is on track to achieve 60 per cent fleet electrification by 2030.
— BERNAMA
