FOUR multinational companies, with an overall investment of RM7bil, have shut down operations from January to June this year, the Dewan Rakyat was told.

The Investment, Trade and Industry Ministry (Miti) said it included Goodyear Tire & Rubber Co, two manufacturing companies with majority foreign shareholding in transportation, and a company dealing with iron and steel, and that they are gradually closing operations until December this year.

Another unnamed company in the food industry with a majority local shareholding, said Miti, will close one of its operations in stages in Port Klang, Selangor.

“However, their factory operations in Johor will resume. The overall investment for these four companies is RM7bil,” said Miti in a written parliamentary reply dated July 1.

According to Miti, the closure of businesses or manufacturing operations is usually due to decisions by investors to restructure, rationalise production activities, and change the change the business directions of a company based on global trends.

For the case of Goodyear Tire & Rubber Co, Miti said that the company’s decision to shut down its Shah Alam manufacturing operations was due to restructuring following financial losses since 2017.

“Goodyear, which is based in Akron, Ohio in the United States, aims to reduce costs at a significant rate by 2025, and the closure of the Shah Alam factory is part of the company’s global operating cost reduction measures.

“Other Goodyear factories that closed were in Germany and in Australia,” said Miti.

At the same time, RM194.9bil of approved investment was recorded for the manufacturing sector under the purview of Miti and the Malaysian Investment Development Authority (Mida), said the ministry.

The figure, said Miti, involves 1,135 projects that are expected to create 91,930 new jobs.

“Of that amount, foreign investments contributed as much as RM166.6bil, or 85.5%, while local investments contributed RM28.3bil, or 14.5%,” said Miti.

Of the RM194.9bil of approved investments, Miti said 445 projects, or 39.2%, with a total foreign investment of RM37.6bil, were realised, creating 29,693 jobs.

“Considering that approved manufacturing projects typically take between 18 and 24 months to implement – depending on the current economic situation, the complexity, and the scale of the project – this is an encouraging achievement.

“Projects that have been implemented or realised refer to projects that started operations, are currently under construction of buildings or factories, or are currently in the process of installing machines and equipment,” said Miti.

https://www.thestar.com.my/news/nation/2024/07/03/four-multinationals-shutter-in-first-half-of-2024