Watching the World:

David Knott
London
[email protected]

One hundred and six years ago, Shell Transport & Trading Co. began operating in Malaysia. The operation grew into Shell Malaysia Ltd., which is looking forward to another 106 years there.

Malaysia is a good place to do business. The country's gross domestic product has grown at an average 8%/year the last 10 years and this year is forecast to grow 8.2%.

Nizar Idris, Shell Malaysia's executive director, says similar economic growth is expected in coming years, with consequent large demand for petroleum products. The manufacturing industry is driving Malaysia's economy.

"Malaysia's demand growth is greater than 11%/year for petroleum products," said Idris. "Only seven majors operate in Malaysia. Shell, for one, is not able to meet this level of demand increase-there is room for others."

Idris attributes Malaysia's booming economy to a government that looks for the country's private and public sectors to be productive and holds dialogue with organizations and companies.

"Government is receptive to new ideas," said Idris. "The private sector has a chance to air its views. Often the dialogue is successful, if a company makes responsible proposals."

Government vision

The government believes it cannot compete in world markets without a high-technology approach.

Hence it has created Vision 2020, named for the description of perfect vision, although it also relates to the year 2020.

"The vision of government is for Malaysia to become a developed, high-tech country with sustainable growth by 2020," said Idris. "Many countries have 5-year plans, but Malaysia's Vision 2020 is unique."

Part of this vision is creation of the Multimedia Super Corridor (MSC) in an area 20 km wide running 50 km from Kuala Lumpur city center to a new international airport at Sepang.

Central government offices are to be moved in 2 years from Kuala Lumpur into the new corridor: "Everything will be high-tech, including a paperless government by a certain date."

Cyberjaya

Central to the 50-60 billion Malaysian ringgit ($20-24 billion) MSC project will be Cyberjaya, a cyber-city near the new government headquarters.

"Companies have been invited to move to Cyberjaya to develop software and so on," said Idris. "Four hundred and fifty companies, many foreign, have applied to build something like Silicon Valley to support MSC."

Idris said Shell has looked into the MSC project and seen long term advantages for oil and gas operations. The company has decided it should not miss the chance to participate.

"Shell has expressed interest in MSC," said Idris. "It makes sense to locate a regional information technology (IT) center in MSC. We don't have an IT center here at the moment.

"Maybe procurement will be relocated in MSC too, although we already have regional procurement based in Malaysia. If we are not in early, we will miss the boat."

While Cyberjaya is undoubtedly exciting, Shell has a more concrete vision to justify staying in Malaysia. The company makes a 25% return on capital investment there currently and reckons it can reach 30% by 2000.