Central states’ collaboration targets RM24.5 bil annual GDP boost from E&E, pharma, halal sectors

This article first appeared in the Industrial Special Report in November 2025.

The Central Region Industrial Cluster Development Initiative, launched at a flagship Malaysian Investment Development Authority (MIDA) seminar on Nov 11 in Kuala Lumpur, seeks to align the distinct strengths of each area to create a unified economic ecosystem.

Each state brings complementary assets to the table—Selangor offers an established industrial base, Negeri Sembilan contributes strategic land availability, and Melaka provides logistical advantages and historical significance.

Investment, Trade and Industry Minister (Miti) Tengku Datuk Seri Zafrul Abdul Aziz said the initiative is set to strengthen ecosystems by deepening supply chains and supporting local enterprises to scale.

The plan, he announced at the seminar, is projected to generate an annual contribution of RM24.5 billion to the country’s gross domestic product, attracting RM12.5 billion in approved investments per year, and create approximately 5,000 high-value employment opportunities over five years.

The focus will initially be on three key sectors: electrical and electronics (E&E), pharmaceutical and medical products, and food manufacturing/the halal economy.

In a fireside chat entitled “Collaborating for Impact: Central region as the hub of growth and opportunities”, Selangor Menteri Besar Datuk Seri Amirudin Shari said: “If we combine the efforts of all states under a coordinated administration, we can become a major player not just temporarily, but on a permanent basis”.

During the discussion, Miti Deputy Minister Liew Chin Tong, reiterated that the central region already benefits from a strong network of suppliers, logistics operators, universities, and innovation partners, but stressed that collaboration, rather than isolated competition, will maximise potential.

“We are preparing for the global market; businesses and technologies from around the world can find a strategic gateway here, making the central region a key regional hub,” he said.

The sentiments were echoed by Melaka Chief Minister Datuk Seri Ab Rauf Yusoh: “We are entering a new era and we have the potential to become a regional hub for economic activities”.

“Coordinated zoning, policy alignment,and infrastructure planning are vital to ensuring that the combined strengths of the states are fully leveraged,” he added.

Federal support and land utilisation are key

The success of the integrated central region, according to the state leaders, hinges on concerted federal government support and policy alignment. Centralised incentives and coordinated policies are viewed as essential tools to direct investment efficiently, and enhance cooperation across the four states.

Ab Rauf expressed the necessity of federal backing: “The federal government’s support is essential because we need the capacity to develop the central states effectively, as well as to improve connectivity”.

Aligning state capabilities with federal initiatives would streamline development, particularly in optimising land and resource use across the region.

“For instance, dedicated spaces for research, innovation, and industrial projects can be shared regionally,” he added. This approach fosters efficiency and encourages investors to engage with multiple states rather than competing individually.

Human capital development also featured prominently in the discussion. The region already benefits from numerous universities and training institutions capable of supplying skilled talent.

Minister in the Prime Minister’s Department (Federal Territories) Dr Zaliha Mustafa, added that by leveraging the region’s natural advantages, human capital, and resources, the central region will generate high-value employment, attract investment, and enhance Malaysia’s standing in both regional and global economic networks.

The initiative was also highlighted as a potential catalyst for Malaysia in regional development.

“These discussions lay the foundation for a second takeoff for Malaysia. We have the opportunity to shape our region and, by extension, the nation’s future,” she added.

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