KUALA LUMPUR: High technology and value-added companies are the areas that foreign companies mostly seek to invest in Malaysia, management consulting firm Crewstone International Sdn Bhd chairman Datuk Wira Jalilah Baba (pix) said.
"But of course, Malaysia is still accepting and assisting foreign companies in other sectors like green technology … besides manufacturing, we also encourage (foreign companies) to go into research and development (R&D), design engineering, not many companies will come in a big way for those areas.
"We help companies to grow in Malaysia and globally, for foreign companies to make a footing in Malaysia, reach out the Southeast Asian countries through their headquarters in Malaysia," she told SunBiz in a recent interview.
Jalilah was the former director-general and CEO of the Malaysian Investment Development Authority (Mida).
Crewstone specialises in identifying potential high-value opportunities for its clients in addressing their specific business and organizational needs.
A proponent of venture capital to grow local companies, Jalilah said local companies are quite reluctant in divesting with their equity when looking to expand and would rather take on borrowings to do so.
She said this tied in with business owners reluctance to forgo control in their companies.
Jalilah expressed her own dissatisfaction over the attitude of Malaysian businesses in wanting to retain full management control even after bringing in private equity partners.
"Sometimes they think when they do equity funding, they can do whatever they like. (This is not the case) because when venture capitalists come in, ( they will want some say in the operations and rules and regulations of the company, as they have invested money), so you're not that free anymore.
"The bigger stake they (venture capital) have, they will have more say, but with the intention to make the project successful, and you'll (businesses will) feel the crunch of being controlled," she said.
Jalilah opined that businesses should open up their doors to venture capital as without proper funding, companies can not grow further, especially for SMEs.
"(Especially when going abroad), the cost is more. First you need to do feasibility study to introduce your product and services in the markets; you need to set up your supply chain overseas…as long as financiers see this as a niche market and you do have a good product and services, they'll come in because they normally will sit down with the clients and work out return on investment (ROI), so that there is not too long a gestation period," she noted.
For ROI, Jalilah opined that 10% to 15% would be "good enough" for a starter, but should aim higher moving forward.
Meanwhile, she said she is proud of getting foreign investors to choose Malaysia as their investment country of choice and expand into Southeast Asia through Malaysia.
"I consider this as my contribution to the country, when I was in MIDA, I was the chief negotiator for high-impact projects to convince them Malaysia is the best location for their footing in Southeast Asia.
"I was working for the government to publicise Malaysia, (now) I'm still doing the same thing, but with more satisfaction now…I do it for free and out of my own passion for the country because I do believe that Malaysia is still the best place to locate investment," she added.