THE investment flow in the business relationship between Western Australia and Malaysia appears to be very much in WA’s favour.
THE investment flow in the business relationship between Western Australia and Malaysia appears to be very much in WA’s favour. Recent Australian Bureau of Statistics figures show that Malaysian investors put $259 million into Australia in 2003. Figures from the Malaysian External Trade Development Corporation show Australian investment into Malaysia in 2003 was $31 million.
Parallel scoping studies of the free trade agreement between Australia and Malaysia are being undertaken. Those studies are due to be completed in the first quarter of 2005.
While there is no indication of the investment figures into and out of WA, it is safe to assume that Malaysian investment in WA is higher than the State’s investment in Malaysia.
And while there have been notable business failures, such as Wave-Master and Eagle Aircraft, there have also been the successes of OKA Motor Company and Hawaiian Investments.
WaveMaster is the most recent failure of a Western Australian business bought by Malaysian interests. The fast-ferry builder was put into voluntary administration in November with debts estimated at $12.6 million.
A major creditor concern is a deal conducted by WaveMaster’s Malaysian parents involving the WA company’s sale to a Singaporean company that is also understood to be owned by WaveMaster’s ultimate parent.
In its prime WaveMaster was considered the equal of WA’s major fast-ferry building company Austal, but for much of 2003 its yard had been languishing without any work.
Another notable failure was Eagle Aircraft, a company that also had been taken over by Malaysian interests. In 2002 the company’s Malaysian owners closed Eagle’s WA factory, also in Henderson, and moved production to Malaysia.
Eagle planes are still being built but their main distribution in Australia these days is out of Newcastle on Australia’s east coast.
Failed business deals have also left a sour taste for some WA companies.
One example is Advanz Exhibition Services director Edward Schimmel, who said his company was still owed tens of thousands of dollars for work it did for a Malaysian trade delegation that came to WA three years ago. He said the money owed had proved too hard to recover and the experience had made him wary of doing business with other Malaysian companies.
Advanz recently turned down a job from Malaysia for a promotion to be held at next year’s Perth Royal Show, partly due to his experience with the previous delegation. Mr Schimmel said the decision was also due in part to the fact that his company was very busy around that time.
On the positive side, OKA has survived and thrived, largely due to its Malaysian owner. The four-wheel drive maker was struggling as a listed company until major shareholder Paari Vell, from Malaysia, bought it and turned it into a private company.
The business is now thriving and turning out vehicles from its Bibra Lake headquarters.
Hawaiian would rank as one of the largest Malaysian investments into WA. It has about $600 million invested in the WA property market. Those investments include London House, Jardine House, Cable Beach Resort Broome, the Park Shopping Centre in Victoria Park, and the Bassendean Village Shopping Centre.
