Japanese companies are increasing investments in Malaysia, despite concerns of high labor and energy costs, says Japanese Chamber of Trade and Industry Malaysia (Jactim) president Shuichi Yoshida.
"They are quite optimistic on Malaysia's growth. New investments will consider the transformation taking place currently, coupled with the fact that Malaysia is now considered an upper middle-income country," he said.
According to Yoshida, the companies are looking for business partnerships, especially in the manufacturing of supply parts for the production of television and video equipment.
He said they are interested to invest in the halal and services sectors, as well as railway and power plant construction.
Japan is the top foreign investor in Malaysia with some 1,400 companies operating as investments in the manufacturing sector have reached $22.2 billion.
Some of the major players include Mitsubishi, Honda, Daihatsu, Nissan, Mitsui, Marubeni, Panasonic, Toshiba, Sharp and Taisei.
Mida has said that Japanese electronics and ceramics producer Ibiden Co Ltd is ramping up production at its second building in Penang Science Park by investing RM1.3 billion ($394 million) this year.