Malaysia’s Investments in India and Vice Versa

Image: Indian exports to Malaysia by top 10 sectors – Source: Indian High Commission

By Charles F. Moreira, Editor

Here is a compilation of some of the standout investments by Malaysia in India and vice versa – giving an idea how extensive the bilateral trade and business partnerships between Malaysia and India are growing.

Malaysian investment in India take the form of investment in industry or participation in projects.

Malaysia was the 19th largest investor in India with FDI inflows from 2000 – 2013 standing at US $ 618.37 million. Malaysia is emerging as a major potential investor in India, with investments in the pipeline in power, oil refineries, telecommunication and electrical equipment industries, besides highway and other infrastructure development projects.

Malaysian Foreign Direct Investment in India was primarily focused on roads and highways, telecommunications, oil & gas, power plants, tourism and human resources. The highest investment proposals have been in the telecommunications, followed by Fuels (power and oil refinery) sector and Roads and Highways.

In the period 2007 – 2012, there has been a surge in Malaysian private sector initiatives in the flow of project-related investments into India. Notable among these were the investments which include:

Malaysia’s national oil & gas company PETRONAS’ stake in Cairn India (Indian arm of UK based oil & gas major Cairn Energy Plc) went up to 14.94% after its recent acquisition of 2.3% share for US $ 240 million (April, 2011)
Astro All Asia Networks Plc has increased its stake in India-based South Asia FM Ltd. (SAFL) from 6.98% to 20% for RM 60.55 million, with an eye on radio-advertising growth in future. (June 2009)
Ranhill Bhd’s USD 900 million contract for construction and commission of a 2×350 MW thermal power plant in Chhattisgarh; (2007)
Mudajaya Group Berhad’s USD 150 million E&P power project related contract in Chhattisgarh; (2006)
Asian Gateways Construction Sdn Bhd’s USD 1.4 billion mega thermal power project (1600 MW) in Andhra Pradesh, Power Purchase Agreement (PPA) for which was signed with PTC India Ltd. in July 2007;
95% stake acquired by Khazanah Nasional Berhad, the investment arm of the Malaysian Government, in Infrastructure Development Finance Company (IDFC) valued at approximately Rs. 8.2 billion (USD 180 million) over a six-month period between September 2006 and March 2007 making them the second largest share holder in IDFC after the Government of India, which holds a 23% stake; (2007)
Sunway Group, Malaysia and Hyderabad based Opus Developers & Builders are developing a 35-acre township, SunCity in Andhra Pradesh, with around 3,400 units of high quality condominiums & their another JV with MAK Projects Private Ltd to develop an RM 380 million (USD 113.43) condominium project in Hyderabad; (2008)
UMW Holdings Bhd’s acquiring 14.9% stake in BSE-listed Oil Country Tubular Ltd (OCTL) for RM 41.96 million (USD 12.16 million) through its Indian arm UMW India Ltd.; (2007)
IJM Corp. Bhd and IDFC’s joint venture to develop a southern road project – Chilakaluripet-Vijayawada Section of National Highway 5 in Andhra Pradesh, at a cost of Rs. 6.75 billion; (2008)
India’s largest mobile phone service provider Bharti Airtel Ltd. and Malaysia’s Global Transit Limited are part of a six member consortium to build a high bandwidth undersea fibre-optic cable linking Asia and the USA at a total estimated cost of US$ 300 million.
UMW Corporation Sdn Bhd, a subsidiary of UMW Holdings Bhd has entered into two separate share sale agreements in 2008 for acquiring a 51% stake in MK Autocomponents Ltd for USD 22.52 million and 50% in MK Automotive Industries Ltd for USD 1 million approximately. (2008).
Malaysian construction firm, UEM Builders Bhd, have set up an equally owned joint venture company in partnership with India’s Ansal Group, called UEM Builders-Ansal API Contracts Pvt. Ltd., with the objective of working jointly on several upcoming construction projects in India, particularly those related to real estates and township development. (2007)
IJM Steel Products Private Ltd, an Indian subsidiary of IJM Group has commissioned an RM 16 million (US $ 4.9 million) welded wire mesh(WWM) manufacturing facility at Isnapur, near Hyderabad. (2008)
Sime Darby Plantation Sdn Bhd, a wholly owned subsidiary (WOS) of the Sime Darby Berhad, signed a Memorandum of Understanding (MoU) with the State Trading Corporation (STC) of India on 26 August 2008 to cooperate in the field of edible oils. Under the agreement, both sides are currently exploring the possibility of setting up an edible oil refining facility and market the end products in India through the joint venture route. (2008)
Tune Hotels Regional Services Sdn Bhd, a Malaysian company with Tune Venture and Tony Fernandes holding 30% and 14% stake, entered into a strategic partnership with Apodis Hospitality Corporation of India to invest in, develop and operate 20 Tune Hotels across India by 2012. It has plans to develop 70 hotels in India by 2016.

Malaysian Projects in India

According to the Construction Industry Development Board (CIDB) of Malaysia, Malaysian companies have so far completed 72 construction projects worth US$ 3.27 billion in India, while 17 projects valued at US$ 2.376 billion are currently under various stages of implementation.
Some of the notable ongoing projects in construction as well as other industry sectors include:

Scomi Engineering Bhd is part of a consortium led by India’s Larsen & Toubro Ltd that has been awarded the RM 2 billion monorail project in Mumbai.
Marrybrown proposes to add 12 more outlets to the existing 30 restaurants in southern part of India.
Ranhill Utilities Bhd (RUB) is partnering with India’s Jusco Group and Infrastructure Development Finance Co (IDFC) to lease and build water treatment plants in West Bengal.
IJM Corp. Bhd, through its special purpose vehicle Vijayawada Tollway Pvt Ltd, has embarked on a major highway project worth nearly RM 500 million (USD 156.7 million) in Andhra Pradesh.
Malaysian Aiports Holdings Bhd has a 10% stake in Rajiv Gandhi International Airport at Hyderabad.

As per Malaysian Investment Development Authority (MIDA), cumulative Indian investment into Malaysia from 1980 – Aug. 2013 stood at USD 2051.29 million (2.05 billion) which include investments of USD 2.91 million during 2013.

During 2012, a total of 10 projects have been approved & implemented with Indian participation in production of Food Manufacturing, Textiles & Textile Products, Wood & Wood Products, Furniture & Fixtures, Chemical & Chemical Products, Petroleum Products (Inc. Petrochemicals), Fabricated Metal Products and Scientific & Measuring Equipment amounting to US$259.85 million as compared to a total 5 projects amounting to US$78.09 million in 2011.

As of that time, there are more than 77 Indian companies including 70 Indian joint ventures operating in Malaysia. Indian companies have started making sizeable investments in Malaysia; these include

-Recron Malaysia Sdn Bhd (owned by the Reliance group) is the largest Indian company in Malaysia, which is one of the largest synthetic and textile integrated plants in the world.

-Ballarpur Industries Limited of the Avantha Group-owned Sabah Forest Industries

– Larsen & Toubro Group’s Tamco Switchgear are other major Indian companies in Malaysia.

– Mahindra Satyam has moved to new premises, located at a 15-acre site in Cyberjaya, offered by the Malaysian Government for its Global Solution Centre (GSC) operations.

– India’s Reliance Capital Ltd. set up a Malaysian unit to serve as a global hub for syariah-compliant financial products.

– Veeda Clinical Research Organization, Ahmedabad proposed to set up its advanced research unit at Ampang Hospital in Kuala Lumpur. The company entered into a quasi-commercial agreement with Malaysia’s Health Ministry.

– Indian public sector undertakings particularly IRCON, HMT, EIL, BHEL, and IOC have been engaged with the Malaysian industrial sector since the 1970s.

Some of investments and joint ventures as well as Malaysian projects awarded to Indian companies as of that time include:

Biocon announced investment worth RM 500 million (US $ 161 million) to set up its first overseas manufacturing and research facility in Malaysia in partnership with Biotech Corporation of Malaysia. The USFDA-compliant plant would be operational by 2014 and make high-end biosimilars and biopharmaceuticals for the global market. It is one of the biggest biotechnology investments in Malaysia.
Manipal Group of India will be investing US $ 180 million in Malaysia to set up a multi-disciplinary university. The Minister for Higher Education Dato’ Seri Khalid Nordin handed over the license to the Manipal Group during the visit of Prime Minister Dr. Manmohan Singh to Malaysia on 27 October 2010.
Manipal International University (MIU) is a Malaysian university currently offering MQA-approved programmes in engineering, life sciences & business as part of Manipal Group. Manipal International University (MIU) is open for enrolment in September 2012. Manipal Education’s has invested RM650mil over five years to establish the Manipal International University (MIU). MUI, Nilai Campus would move to a world class education mini city in 2013.
Veeda Clinical Research Organisation, Ahmedabad proposes to set up its advanced research unit at Ampang Hospital in Kuala Lumpur. The company has entered into a quasi-commercial agreement with Malaysia’s Health Ministry.
Hextar Chemicals Sdn Bhd, Kuala Lumpur and Unitop Chemicals Pvt. Ltd, Mumbai entered into a joint venture in January 2008 to make specialty chemicals for the agriculture, oil and gas, textile and personal care products industries. The Plant, known as Hextar Unitop Chemicals Sdn Bhd, will be built in two years’ time at a cost of RM 10 million (USD 2.99 million).
Mahindra Satyam, a software service company from India, proposes to expand its operations in Malaysia.
Wipro has expanded its Malaysian operations by launching a Global Service Management Centre (GSMC) in Cyberjaya.
Hyderabad-based Vivo Bio Tech Ltd is to invest RM 450 million (USD 140.6 million) in the setting up of an integrated biotechnology facility in Malacca to commercialize bio-therapeutics in Malaysia.
Malladi Group is in the process of investing US $300 million by 2012-13 to create a global one-stop shop encompassing entire value chain in contract manufacturing facility in bio-technology in Malaysia;
Malaysia’s MNC Wireless Berhad and India’s Cellebrum.Com Ltd, a subsidiary of Spice Corp Ltd, established a strategic partnership that entails marketing Cellebrum.Com’s mobile platforms, distribution rights, marketing in collaborative areas and co-development in the areas of research & development.
Hyderabad-based Goldstone Technologies Ltd. Launched its Internet Protocol Television (IPTV) service in Malaysia to take advantage of the growing audience market. Partnering with MOL Access Portal Bhd., Goldstone’s focus will be on South Indian content, particularly movies.
Reliance Anil Dhirubhai Ambani Group’s Adlabs Films Ltd has expanded into Malaysia with the acquisition of a majority stake in the Lotus Five Star Cinemas. With the Adlabs acquisition, Lotus has emerged as the third largest chain in Malaysia, operating 51 cinema halls spread all over Malaysia.
India’s Punj Lloyd Ltd is part of a consortium awarded the job of building a 512 km natural gas pipeline from the proposed Sabah Oil and Gas Terminal in Kimanis to Petronas’ liquefied natural gas complex in Bintulu (East Malaysia).
Aban Offshore Ltd, Mumbai has been awarded two contracts worth USD 55 million in all to drill nine oil wells in Malaysia.
The Embassy Group of India in partnership with the Emkay Group of Companies of Malaysia have officially opened the Block A of their MKN Embassy TechZone project worth RM 350 million (USD 109.7 million) in Malaysia.
Scomi Marine, an associate of Scomi Group Bhd of Malaysia has entered into a memorandum of understanding (MoU) to form a framework of cooperation for the provision of maritime academic programmes in Malaysia is still under progress. The MoU was signed with Indian Maritime University (IMU), Intan Asia Sdn Bhd and Port Klang Free Zone (PKFZ). IMU is a central university established by the Ministry of Shipping, Government of India with headquarters in Chennai.
TH Properties Sdn Bhd and Davanam Constructions Pvt Ltd has entered into an agreement to build approximately 200 acres luxury residential project at Bandar Enstek, Nilai is scheduled to commence in first quarter 2011 with completion targeted for 2016.
Malaysia-based Tamco Switchgear, a wholly owned subsidiary of Larsen & Toubro Limited and part of the Electrical & Automation (E&A) business, have taken over Henikwon Corporation Sdn Bhd. Based in Malaysia, Henikwon Corporation is a leading manufacturer of Low Voltage (LV) and Medium Voltage (MV) busduct systems. Henikwon brand is globally well recognized and offers high quality products under compliance to international quality standards.
Reliance bought over BP’s interest in BP Chemicals (Malaysia) Sdn Bhd (BPCM) located at Kuantan on the east coast of Malaysia for $230 million in cash, both parties anticipate completing the transaction in 2012. BPCM plant is manufacturing of 610,000 tonnes of purified terephthalic acid (tpa) per year.