Malaysia's medtech sector stages turnaround as investments pick up

Domestic direct investments more than doubled in 2018 to $372m.

After a dismal year that saw foreign direct investments plunge 62% in 2018, Malaysia’s medical technology sector is bouncing back following a $24.7m capital injection by a US-based medtech firm’s $24.7m (MYR100m) into the country’s health sector, a report by Fitch Solutions revealed.

US-based medtech firm Edwards Lifesciences will establish a regional business service centre in Eco City Kuala Lumpur, which will provide support functions such as finance, IT, supply chain, human resource, digital health, marketing and quality assurance to seven offices across Japan and the broader APAC region.

Also read: Medical device FDIs to extend slump in 2020

In 2018, the Malaysian Investment Development Authority (MIDA) approved projects valued at $160m (MYR600,000), down from $363m (MYR1.6b) in 2017.

“The fall in 2018 in part reflects the completion of B. Braun’s major investment programme culminating in the opening of five new and enhanced production plants in April 2018,” Fitch Solutions said.

That said, domestic direct investment (DDI) more than doubled in 2018 to $372m (MYR1.5b), bringing up the 2018 investments to only slightly lower than 2017 at $516m (MYR2.1b).

A total of 28 projects were approved by MIDA, including a $24.2m project by JLL Malaysia to manufacture balloon and electrophysiology catheters, an $18.9m project by Pentax Medical (Penang) to produce endoscopic and surgical devices, and a $17.4m project by Japan Lifeline to establish a production facility for cardiac rhythm management devices.

Also read: Medical device revenues to dip in 2020 as R&D expenses rise

In a bid to revive foreign investment momentum and maintain its international competitiveness, local authorities have eased existing policies and introduced new measures.

It launched the Industry4WRD national policy on Industry 4.0 in 2018, which laid out Malaysia’s vision for the manufacturing sector for the next 10 years. It is expected to drive digital transformation of the country’s manufacturing and related services sectors.

Additionally, in March 2019, finance minister Lim Guan Eng opened the ‘MYR3bn Industry Digitalisation Transformation Fund’, which offers companies an annual interest subsidy of 2% on the financing taken to upgrade their production technology.