Invest-in-Penang Bhd General Manager Loo Lee Lian told the business paper the news is not as grim as it sounds for the manufacturing sector in Penang.
“While it is true that Seagate will not proceed with its initial RM1.05 billion investment in Batu Kawan on the mainland side of Penang, however, SanDisk Corp, which has been acquired by Western Digital, will continue to operate in Batu Kawan.
“There is nothing to be alarmed about it. Yes, it was a shock to us when we were informed of their (Western Digital’s and Seagate’s) move to Thailand, but it is common in the industry,” Loo was quoted as saying by The Edge FD.
According to the report, Seagate had cancelled plans for a new plant on a 16.8-hectare plot of land in Batu Kawan, despite the foundation for the plant being halfway completed.
Loo downplayed the negative impact saying that the downsizing or closure of organisations are a normal consequence of global mergers and acquisitions.
Loo is positive on the FDI front, however, telling The Edge FD that “other MNCs (multinational corporations) have shown interest in investing in Penang”.
FDI has been reducing in Penang over the past two years with the RM5.11 billion generated in 2014 in the manufacturing sector dropping to RM4.5 billion last year. But it was still the highest among all Malaysian states.
This year, the amount has dropped further with official numbers showing the FDI for the first quarter dropping by 55 per cent to RM1.1 billion from the RM2.5 billion earned for the corresponding period last year.