THE Penang government today refuted a recent claim by MCA that factories in the state have closed and thousands of people have lost their jobs.

Chief Minister Chow Kon Yeow said Penang still attracted an average RM5 billion in foreign direct investment and has created 10,000 jobs annually.

He said year-to-date, Penang is only experiencing a very small-scale headcount reduction by a few companies, and there is no plant closure.

“On average, new investments in Penang have created 10,000 jobs annually.

“Penang houses more than 350 multinational corporations and the number is increasing yearly while the average foreign direct investment into Penang (mainly from the electrical and electronics sector) is about RM5 billion yearly.

“In addition, Penang’s unemployment rate was only at 2.1% in 2017, the second lowest among the states. Malaysia’s unemployment rate was 3.4% in 2017,” he said in a statement today.

Last week, MCA vice-president Tan Teik Cheng was quoted in the press raising concerns that seven multi-national electrical and electronics (E&E) factories have closed, causing 5,245 people to lose their jobs from 2015 to March this year.

Chow said Tan had tried to “recycle old news and give them a spin” in his commentary on Penang’s investment and E&E industry.

He said out of the 5,245 affected employees mentioned by Tan, 5,195 employees were impacted between September 2015 and June 2017.

“We did not witness any cases in 2018. It is to note that most retrenched workers will find new job opportunities that are readily available because of ongoing investment.”

Chow also said the E&E business is cyclical, highly competitive and innovation-based; and it is common for companies in the sector to have continuous reorganisation and rationalisation.

“In 2018, we saw many corporations had reserved their investment decision as they took the wait-and-see approach on the US-China trade war.”

Chow, who heads the state’s investment arm Penang Development Corporation, admitted that the sector’s global outlook will remain “cloudy” in the near term due to the tensed relationship between the two superpowers dampening global trade and consumer sentiments.

But he said Penang will benefit in the long run from corporations diversifying their investment destinations.

“We are now working with several serious potential investors. The state government wants to focus on high quality investment that creates high value jobs and suit our industry profile.

“We are not keen in pursuing low quality investment which may bring in huge investment amount but requires low technology and massive labour workforce.”

Penang is a power house in Malaysia’s E&E sector, contributing 38% of the country’s total export, amounting to RM380 billion. – May 15, 2019.