NUSAJAYA (Johor): Singapore companies have set up more than 300 manufacturing projects in Iskandar Malaysia since 2006, according to the latest statistics from the Malaysian Investment Development Authority.
The figure, which was provided in response to queries from The Straits Times, underscores the importance of Singapore to the economic corridor in southern Johor, said Iskandar Regional Development Authority chief executive Ismail Ibrahim.
The Republic is already the largest single foreign investor in Iskandar, having ploughed in more than RM5 billion (S$2 billion) since its inception in 2006.
Total foreign investment in the development region rose from RM22 billion in 2008 to RM37 billion in September this year.
"We see Singapore and Iskandar as a single economic hub," Datuk Ismail told reporters yesterday.
"Much of the investment has been from small and medium-sized companies. But as ties continue to improve between the two countries, we expect bigger projects to come on board."
This week, Singapore billionaire Peter Lim announced that he was building a racing circuit in Iskandar.
He had been wooed to invest in Singapore's stalled Changi Motorsports Hub, but he said he was put off by the high costs.
The same day, Deputy Prime Minister Tharman Shanmugaratnam acknowledged that more Singapore companies will face increasing pressure to move out of the island because of labour and land costs - and that Malaysia would be a logical destination.
One Singapore firm that has expanded its operations to Iskandar is steelworks company Yongnam.
In 2008, it opened a steel fabrication plant in Iskandar's Southern Industrial and Logistics Clusters (SILC), to complement its operations in Singapore.
Yongnam picked Iskandar because it was near Singapore and the company's clients could visit the factory easily.
Another advantage was Iskandar's proximity to Johor's ports - Yongnam exports almost all of its goods from Iskandar.
Operating costs are at least 30 per cent lower in Iskandar than in Singapore, with the greatest savings coming from labour, said Mr Yusufirashim Sadir Mohammed, the administration and human resource manager of Yongnam's Iskandar plant.
The more labour-intensive projects, he said, are carried out at the Iskandar facility.
"But our company will continue to keep our Singapore operations, because we have our headquarters there," he said.
"You can't have a body without a head."
Singapore companies currently occupy about 20 per cent of the land in the 405ha SILC.
Malaysian companies take up more than 70 per cent.
"Such projects show that foreign investors believe in the stability of our country and the opportunity for growth," Johor Menteri Besar Abdul Ghani Othman said yesterday.
He was delivering a speech on behalf of Prime Minister Najib Razak at the official opening of the Puteri Harbour Family Theme Park in Nusajaya.
The park boasts the first Sanrio Hello Kitty Town outside Japan. Since the park opened its doors to the public in October, it has attracted more than 50,000 visitors.