Four Multinational Firms Cease Operations in Malaysia in 2024
During the first half of 2024, four multinational firms with total investments amounting to RM7 billion have ceased operations in Malaysia, according to Minister of Investment, Trade, and Industry Tengku Datuk Seri Zafrul Abdul Aziz. This significant development includes companies from the rubber-based product, transport, iron and steel, and food industries.
Key Companies Affected
Among the companies ceasing operations is Goodyear Malaysia Bhd, a notable player in the rubber-based product industry. The other three companies span the transport, iron and steel, and food industries. Both the transport and iron and steel firms, which are majority foreign-owned, will gradually wind down their operations by December 2024. The food industry company, primarily locally-owned, will cease its Port Klang facility operations in stages by December, while maintaining its Johor operations.
Reasons Behind the Cessation
Minister Zafrul highlighted several factors contributing to these companies’ decisions to cease operations, including company restructuring, business model adjustments, and alignment with global production trends. For example, Goodyear Malaysia Bhd closed its Shah Alam factory as part of a restructuring plan following sustained losses since 2017. Similar cost-cutting measures have impacted the company’s operations in Germany and Australia.
Government’s Proactive Measures
Despite these closures, Zafrul emphasized the government’s proactive stance in attracting new investments and supporting domestic ventures. The ministry is focused on enhancing policies, strategies, and stakeholder engagement to foster a favourable business environment and strengthen the investment ecosystem and supply chain.
Investments and Job Creation
From January 2023 to March 2024, the Ministry of Investment, Trade, and Industry, along with the Malaysian Investment Development Authority, approved investments totalling RM194.9 billion across 1,135 projects in the manufacturing sector. These projects are expected to create 91,930 new jobs. Foreign investments accounted for RM166.6 billion or 85.5%, while local investments totalled RM28.3 billion or 14.5%.
Of these approved projects, 445 projects or 39.2%, with RM37.6 billion in foreign investments, have been realized. These include projects in operation, under construction, or in the process of installing machinery and equipment, creating 29,693 jobs.
Conclusion
The cessation of operations by these multinational firms marks a significant shift in Malaysia’s industrial landscape. However, the government’s commitment to attracting new investments and supporting the local economy is evident through its proactive measures. By fostering a favourable business environment and strengthening the investment ecosystem, Malaysia aims to mitigate the impact of these closures and drive future growth and job creation.
