FDI inflow into Iskandar's first phase may top target

ISKANDAR Malaysia in Johor could surpass the US$13 billion (RM44 billion) foreign direct investment target for its first phase of development due to fresh investment interest from Hong Kong, South Korea and Europe.

To date, the economic zone has received 92 per cent, or US$11 billion, of the targeted amount in the first phase of investment.

"We have a lot of foreign developers and investors who have expressed surprise that we are not better known.

"They said Iskandar Malaysia is Asia's best-kept secrets. We can expect Iskandar Malaysia to have a new wave of investments next year," Iskandar Investment Bhd (IIB) managing director Arlida Ariff told Business Times in an interview.
IIB, a unit controlled by state-owned investment arm Khazanah Nasional Bhd, is the catalytic developer of Iskandar Malaysia.

Arlida said investors are attracted to the economic zone as the entry level for investments is lower than other parts of the world.

She added that Iskandar Malaysia has become a viable alternative for investors who want to go into less risky types of investments.

Three times the size of Singapore, Iskandar Malaysia spans 2,217 sq km and is a mixed use development planned for completion in 2025.

The expected investment of US$110 billion (RM375 billion) is split between an initial start-up of US$13 billion from 2006-2010 and US$97 billion (RM331 billion) from 2011-2025.

Since its launch in November 2006, the bulk of investments into Iskandar Malaysia have come from Asia, Europe and the Middle East with focus on manufacturing, pro-perty and tourism projects.

The biggest investment is from Acerinox SA of Spain and Japan's Nisshin Steel, which have committed RM5 billion in investments to build a stainless steel plant.

IIB's Arab partners - Mubadala, Millenium, Kuwait Finance House and Aldar - have committed another US$1.2 billion (RM4.27 billion) to develop properties in Medini in Nusajaya.

Interest has also been shown by Merlin Entertainment to build Legoland Malaysia in Medini for US$200 million (RM726 million) and the UK's Newcastle University of Medicine to set up a branch campus worth US$100 million (RM363 million) in EduCity.

Arlida said the design for Legoland Malaysia has been finalised and 26 sub-contracts have been awarded. "We target to break ground at the site by November this year," she added.

By Business Times (by Sharen Kaur)