Read carefully and read more and you will see many manufacturing facilities in Singapore are starting to move to Iskandar. The reason is very clear. It is never going to be cost efficient when the land that you are buying to build your plant is many times more than the rate of exchange due to scarcity and whatever other costs are all in a currency which has grown much stronger, not just against Malaysia but against majority of all currencies in the region. Frankly, producing in Singapore to sell to other countries, even if it is to the developed ones will be very tough. Imagine if I produce in Malaysia and you produce in Singapore, as long as I can obtain the same type of certifications as you, who do you think will sell more?
I know, some would like to now say that there are much more talents in Singapore. I do not think this is a valid argument or else all the multinationals operating in anywhere within Malaysia today would have closed and moved to Singapore. Oh yeah, even those in Indonesia, Thailand and the Philippines too. In a recent article in the media recently, it was announced that another multinational company with its head office in Singapore would most probably be moving to Iskandar Malaysia. It specialises in the distribution of tropical vegetable oils and their derivatives According to the Johor Tourism, Domestic Trade and Consumerism committee chairman Datuk Tee Siew Kiong, it is a European company and it plans to invest RM250 million for this new setup.
Honestly, the headquarter of all these new or existing multinationals can continue to be in Singapore. Of course, if there are better links, these expats can also stay in Malaysia but perhaps now, they can continue to be based in Singapore. In other words, the rest of the manufacturing side can be within Iskandar and perhaps this is where the best of both worlds would occur. Good connection to the world vis Singapore and a competitive production cost in Iskandar Malaysia. Well, why not produce in China since the cost is likely to be lower? Please ask around about the cost of manufacturing plants and labour in Shanghai before you conclude. Secondly, who will be managing them if the manufacturing plants are so many hours away. As for R&D, I think many would prefer this part of the world, for now. Happy blending and surviving together against the world!
written on 5 Nov 2015
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