FMM: DISF helpful to manufacturers

The Domestic Investment Strategic Fund (DISF), that is being administered by Malaysian Investment Development Authority (MIDA) is relevant to investments into the palm oil downstream businesses.

KUALA LUMPUR: The Federation of Malaysian Manufacturers (FMM) said the RM1 billion top up to the Domestic Investment Strategic Fund will encourage more manufacturers to adopt higher technology and export more value-added products. 

Prime Minister Datuk Seri Najib Razak announced the additional allocation as one of the proactive measures to strengthen the economy amidst challenging conditions globally.

Under the 10th Malaysia Plan, the Domestic Investment Strategic Fund (DISF) was launched in 2012 with RM1 billion allocation. DISF seeks to boost domestic investment, encourage research & development, provide training in new and emerging technologies, and to accelerate Malaysian industries into the global supply chain.

As at August 31 this year, Malaysian Investment Development Authority (Mida) had approved 181 investment projects for DISF grants totaling RM747.5 million. The beneficiaries are from sectors including electrical & electronics, machinery, transport, services, chemical, oil & gas and food industries.

In a statement yesterday, FMM chief executive officer Dr Yeoh Oon Tean said the DISF will help accelerate the transition of domestic manufacturers to be high value-added, high technology, knowledge-intensive and innovation-based.

Mida has targeted beneficiaries of the DISF to be from sectors such as integrated circuit design, semiconductor, medical devices, pharmaceuticals, biotechnology, aerospace, healthcare, halal, petrochemicals (specialty chemicals & chemical derivatives), advanced oleochemicals, specialised rubber, renewable energy, energy efficiency and waste management.

Yeoh also noted the exemption of import duties on another 90 tariff lines covering spare parts, consumables and research equipment is expected to support upgrading and expansion of exports among FMM members. 

On foreign workers recruitment, Yeoh reiterated manufacturers want the process be streamlined into a one-stop centre. There should be a more comprehensive immigration and foreign worker employment policy. He said FMM thinks this should be led by the Human Resources Ministry. 

"The current foreign worker levy which is fully borne by employers is having serious cost implications on our members. Generally, manufacturers are not in favour of having foreign worker levy based on the ratio to total workforce," he said.

On the 2016 Budget, set to be tabled next month in Parliament, Yeoh said FMM reiterates its appeal to the government to extend Reinvestment Allowance, strictly enforce the “Buy Made in Malaysia” policy in government procurement, and implement trade facilitation measures to help promote export competitiveness and expansion.

FMM also appealed to the authorities to hold off further increases in natural gas pricing, minimum wage rates and foreign workers levy.