Malaysian Industrial Development Authority Approves IBM Regional Centres As Asia Pacific Operational Headquarters

KUALA LUMPUR, August 29, 2008 – The Malaysian Industrial Development Authority (MIDA) has awarded six of IBM regional centres in Malaysia with an Operational Headquarters (OHQ) status for providing qualified services to its offices globally. The centres provide services such as administration, finance and accounting as well as technical support and enablement services to IBM offices worldwide.

The six regional Centres are Asia Pacific Finance Regional Support Centre, IBM Asia Pacific Competency Centre, Asia Pacific IBM Global Financing Centre of Excellence, IBM World Wide Competency Centre, ASEAN Regional Technical Sales Support Centre and IBM Asia Pacific Accounting Centre. Since the inception of the first regional Centre in 1994, the employment opportunities created by IBM has increased by nine folds.

Malaysia, earmarked as IBM's Growth Market organisation, assumes a key role in the company’s globally integrated enterprise strategy. IBM Corporation will continue to invest in Malaysia through better prioritisation, standardisation, and key initiative management. In total, IBM has eleven regional centres in Malaysia.

“Malaysia is chosen as the location due to our highly skilled workforce that provides the necessary human capital to cater for the various business functions of IBM. Malaysia has developed a reputation for providing robust national infrastructure at competitive costs. Global integration is about tapping into the best skills and capabilities from across the globe and delivering them where it is needed," said Ou Shian Waei, Managing Director, IBM Malaysia.

As a result of IBM’s globally enterprise business model, many of the activities at the corporate level such as pricing decisions sales planning and reviews, are now performed by teams out in different countries worldwide.

The establishment of regional centres in Malaysia would benefit the services sector as key personnel from IBM Headquarters will be stationed in Malaysia to provide their services, as well as provide training and expose Malaysian technical employees to the global business environment.

The Director General of MIDA, Dato’ Jalilah Baba, said “IBM’s presence here will serve to further enhance the development of the services sector and will position Malaysia as a hub for the Asia Pacific region.”

Malaysia is fast becoming a centre for regional business support activities. A number of world renowned companies have established their operations in Malaysia to support their subsidiaries and affiliates in the Asia Pacific and world markets. Malaysia’s strength to serve as a regional hub for such business support activities can be attributed to the country’s political stability, multi-lingual workforce and strategic location within Asean and the Asia Pacific region.

Under Malaysia’s Third Industrial Master Plan (IMP3), 2006-2020, the non-Government services sector is targeted to contribute significantly towards the country’s economic growth. A major focus of the development is the promotion of exports, including positioning Malaysia to become a regional centre for selected services.

The services sector is expected to register an annual growth rate of 7.5 per cent during the IMP3 period. The contribution of the services sector to GDP by 2020 is expected to be around 59.7 per cent. Targeted investments for the services sector: RM688 billion (RM45.9 billion per year).

For the period of 1990 to July 2008, a total of 156 OHQs were approved, with 8,852 job opportunities created for Malaysians, with an estimated annual business spending of RM1.8 billion. Most of the OHQs established in Malaysia are engaged in business process outsourcing (BPO) activities including provision of the shared services to related companies in the Asia Pacific region.