Accessing industrial site selection criteria by investors in Malaysia

Liaw, Bing Kun (2024) Accessing industrial site selection criteria by investors in Malaysia. Master dissertation/thesis, UTAR.

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Abstract

Malaysia's strategic location in Southeast Asia, coupled with its unique attributes, makes it an attractive destination for Foreign Direct Investment (FDI) and Domestic Direct Investment (DDI). With its central location in the South East Asia, extensive infrastructure, matured highway connection, multiracial population, and robust port facilities, Malaysia stands as an advantageous choice for investors. Amidst approximately 600 industrial parks nationwide, determining the optimal location poses a challenge. Not all industrial parks offer ideal infrastructure, utilities and facilities, prompting investors to seek sites tailored to their specific requirements. To enhance Malaysia's appeal as an investment destination, it is crucial to identify the most sought�after criteria for site selection. Through a detailed literature review, key selection criteria were identified, encompassing factors such as connectivity and infrastructure, utilities, government institutional support, facilities and services, physical sites, labour, and investment costs. Subsequently, a survey questionnaire was distributed to key experts, including industrial property developers, industrial agents with extensive experience in dealing with potential investors seeking industrial land in Malaysia, and existing investors who have already established a presence in the country. The aim was to gather insights into their decision-making processes regarding site selection criteria. The Analytic Hierarchy Process (AHP) tools were utilized to prioritize criteria based on data collected from key respondents. A total of 5 main criteria and 19 sub-criteria were selected for this analysis. Based on the findings, the main criteria were ranked in terms of weightage, with connectivity being the most significant criterion, followed by utilities, physical sites, facilities, and lastly, government institutional support. Further delving into each main criterion, the AHP tools enable the researcher to explore its sub-criteria to address multi-criteria decision-making. Regarding connectivity, the weightage spans from connectivity with major highways and proximity to airport/seaport to proximity to urban centre and availability of raw resources. Similarly, for utilities, the weightage ranks from electricity supply and water supply to telecommunications & network infrastructure and waste disposal/collection management. In terms of physical site attributes, it ranges from size of the site and site topography to landscape/green features. As for facilities, the ranking includes security measures, safety measures, worker accommodation, and management services. Finally, in terms of government institutional support, property ownership policy emerges as the most significant factor, followed by tax incentives offered by the government, supportive state administrative and permissible zoning and land used. The findings shed light on the crucial factors influencing site selection, providing guidance for stakeholders to make informed decisions and bolster Malaysia's industrial parks' competitive edge, attracting investment and bolstering Malaysia's standing on the global stage.

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