Working experience: Accounting lecturer (2005-now)

Expectation: I hope I can deliver my best for this course. I hope everyone benefit from the course for your study and career.

Founded in 1987 in Klang, Selangor, it started as a small sundry shop and has since expanded to over 2,800 outlets nationwide.

The business focuses on offering essential groceries, household products, and daily necessities at affordable prices, built around its “near and save” concept to serve local communities conveniently. In 2024, the company raised RM2.36 billion through its Initial Public Offering (IPO) to support growth and strengthen its operations. Building on its strong local presence, 99 Speedmart began its international journey by opening its first overseas store in Fuzhou, China, in August 2025.

This step was supported by procurement subsidiaries set up in China to manage sourcing and logistics. Although its earlier expansion attempt in Singapore in 2019 was short-lived, the move into China reflects a more structured and long-term strategy to explore opportunities in the global retail market.

The company is primarily recognised for its modernist furniture designs, minimalist interior design, and immersive purchasing concept. This concept is centred around decorated room settings within big-box stores, allowing customers to interact with products in person. In addition, IKEA is recognised for its commitment to continuous product development and cost control, particularly in the areas of ready-to-assemble furniture, affordable design, and sustainability-driven innovation. Whenever feasible, IKEA's furniture was distributed in compact "flat pack" form for in-home assembly by the customer, which enabled the company to establish lower prices than its competitors.

IKEA owns more than 460 stores in more than 60 countries. Inter IKEA Group increased its efforts to make IKEA more affordable for the many people, and IKEA sales amounted to RM220 billion in the financial year 2024 (FY24). IKEA has significantly reduced prices in 63 markets during FY24, thereby making it more accessible to a wider range of individuals. IKEA observed an increase in both in-store and online visitation as a consequence of the price reductions, and volumes have increased in response to the growing demand from consumers.

The company goes global as a result of foreign direct investment in production facilities (e.g. Malaysia and Ireland), global research and development centres, and strategic alliances, market differentiation and integrated global supply chain. These are strategies that have enabled Intel to lower its costs, innovate and serve in both developed and emerging markets, and thus it is a leading multinational in the semiconductor industry.

Oreo's key manufacturing hubs span North America, Europe, Asia, and Latin America that supported by a vast distribution network that places Oreo in over 100 countries via supermarkets, convenience stores and e-commerce.

Oreo expanded internationally began in the 1990s. In 1996, Oreo entered China by adapting to local tastes through reformulating for less sweetness and launching as a premium treat, currently, China Oreo's is the second largest market after the U.S.

While in Malaysia, Oreo officially entered the Malaysian market around the early 2000s through Mondelez's formerly known as Kraft Foods's distribution networks in Southeast Asia.

Microsoft started its operations in Malaysia in 1992 and employs more than 200 employees today across its offices in Kuala Lumpur and Penang. Microsoft works closely with governments, non-government organizations, enterprises, communities, and individuals to deliver on its mission and realize the nation’s digital ambitions.

As Malaysia’s trusted technology partner and advisor, Microsoft has been here every step of the way as the nation embarks on its digital transformation ambitions, creating opportunities for more effective and efficient businesses across all sectors with the use of its cloud-based technologies and expertise.

Microsoft helps businesses reimagine how they bring together people, data, and processes to create value for their customers and maintain a competitive advantage in a digital-first world. We partner with more than 2,000 organizations that form part of our Microsoft Partner Network in Malaysia to transform them into a digital company by developing new capabilities to better engage with their customers, empower their employees, optimize their operations, and transform their products.

In addition, Microsoft believes everyone should have the opportunity to experience the benefits of technology and participate in our nation’s digital economic growth. When everyone is empowered to achieve more, we all benefit. Microsoft partners closely with nonprofits, governments, educators, and businesses to provide cash grants, technology, and resources to help ensure digital skills and education are accessible to young people.

Our efforts include the Global Skilling Initiative that offers digital skills and pathways to open doors for local talents to greater economic opportunity, and the Digital Educational Learning Initiative Malaysia with the Ministry of Education to ensure equal access to technology solutions for 5.2 million students and educators nationwide. We recently launched the Bersama Malaysia (Together with Malaysia) initiative, marking our long-term commitment to empowering Malaysia’s inclusive digital economy.

Microsoft expands its business in Malaysia in several ways:

1.    Establishing Local Presence

o    Microsoft has been in Malaysia since 1992 and now operates offices in Kuala Lumpur and Penang with more than 200 employees. This shows its long-term commitment and growing footprint in the country.

2.    Partnerships with Organizations

o    The company partners with more than 2,000 organizations through the Microsoft Partner Network. By working with local businesses, Microsoft helps them adopt digital technologies, improve efficiency, and develop innovative products and services.

3.    Government and Education Collaboration

o    Microsoft collaborates with the Malaysian government, NGOs, and the Ministry of Education to support national digital transformation goals. For example, the Digital Educational Learning Initiative Malaysia provides technology solutions to 5.2 million students and educators.

4.    Skilling and Talent Development

o    Through programs like the Global Skilling Initiative, Microsoft helps Malaysians build digital skills, creating a stronger talent pool for both local industries and the wider economy. This also expands Microsoft’s influence as more people become users of its platforms and tools.

5.    Long-Term Commitments and Initiatives

o    With initiatives like Bersama Malaysia (Together with Malaysia), Microsoft shows its plan to keep investing in the country. This initiative reflects Microsoft’s expansion strategy of building trust, inclusivity, and innovation in Malaysia’s digital economy.

6.    Cloud and Digital Transformation Services

o    Microsoft expands its business by offering cloud-based solutions to enterprises, governments, and communities. This drives adoption of its Azure, Microsoft 365, and other services, increasing market penetration.

So, the company is not just expanding by opening more offices, but by deepening its role in Malaysia’s digital economy—through partnerships, education, skills development, technology adoption, and long-term investment.

○Market expansion – MNCs can sell products directly in new countries.

Example: McDonald’s invests in India to serve local customers instead of exporting.

○Lower production costs – Companies reduce costs by operating in low-wage countries.

Example: Samsung sets up factories in Vietnam to benefit from cheaper labor.

2.Challenges of FDI

○Political and regulatory risk – Government policies may change unexpectedly.

Example: An MNC faces higher taxes after a new government changes investment rules.

☆Cultural differences – Misunderstanding local culture can affect management and sales.

Example: Walmart struggled in Germany due to differences in shopping culture and labor practices.

1. Access to New Markets

FDI allows MNCs to enter foreign markets directly, helping them:

• Increase sales and market share

• Serve local customers more efficiently

• Reduce dependence on home markets

2. Cost Advantages

By investing in countries with:

• Lower labor costs

• Cheaper raw materials

• Lower production or operational expenses
  MNCs can significantly reduce overall costs.

3. Resource Acquisition

FDI helps MNCs gain access to:

• Natural resources

• Skilled or semi-skilled labor

• Advanced technology or specialized knowledge

4. Greater Control

Unlike exporting or licensing, FDI gives MNCs:

• Full or majority ownership

• Better control over operations, quality, and branding

• Protection of proprietary technology and know-how

5. Government Incentives

Host countries often offer:

• Tax holidays

• Subsidies

• Reduced tariffs or relaxed regulations
  to attract foreign investors.

6. Long-Term Growth and Profitability

FDI enables MNCs to:

• Build a strong global presence

• Achieve economies of scale

Enhance long-term competitiveness: Challenges of FDI for MNCs

1. Political and Economic Risk

MNCs may face:

• Political instability

• Changes in government policies

• Nationalization or expropriation risks

• Currency fluctuations

2. Legal and Regulatory Barriers

Different countries have:

• Complex legal systems

• Foreign ownership restrictions

• Strict labor, environmental, or tax laws

3. Cultural and Social Differences

Cultural differences can affect:

• Management practices

• Communication

• Employee relations

• Consumer behavior

4. High Initial Investment Costs

FDI requires:

• Large capital outlay

• Long payback periods

• Significant risk if the venture fails

5. Operational and Management Challenges

Managing overseas operations involves:

• Coordination across time zones

• Supply chain complexity

• Monitoring performance from a distance

6. Reputational and Ethical Issues

MNCs may face scrutiny related to:

• Labor practices

• Environmental impact

• Corporate social responsibility

  Conclusion: FDI offers MNCs major advantages such as market expansion, cost efficiency, and strategic control, but it also involves substantial risks and challenges. Successful FDI requires careful planning, risk assessment, and adaptation to local conditions.

1. Market Expansion
   FDI allows AirAsia X to establish operations in foreign countries, giving direct access to new international markets and increasing passenger demand.

2. Cost Advantages
   By investing in countries with lower labour, operational or airport costs, AirAsia X can reduce overall operating expenses and improve competitiveness.

3. Greater Control over Operations
   Through FDI, AirAsia X can maintain control over its routes, service standards and management decisions rather than relying solely on partnerships.

Challenges of FDI

1. Regulatory and Legal Barriers
   Different countries have varying aviation laws, ownership restrictions and compliance requirements that can complicate foreign investments.

2. Foreign Exchange Risk
   Revenue earned in foreign currencies may fluctuate against the Malaysian Ringgit or USD, affecting profitability.

3. Political and Economic Risks
   Changes in government policies, economic instability or travel restrictions in host countries can negatively impact operations.

1.  Market Access and Revenue Diversification

FDI allows SEB to access foreign oil and gas markets directly rather than relying solely on the Malaysian market. By operating in regions such as Thailand and Brazil, SEB can:

- Diversify revenue sources

- Reduce dependence on domestic or local demand

- Secure long-term contracts with national oil companies and multinational clients.

2. Relationship With Clients and Project Opportunities

FDI enables SEB to establish a local presence near offshore fields and build client relationships. This provides:

- Faster project execution

- Lower logistic costs

- Improved client relationship

- Better chances of winning a contract due to local credibility

3. Strategic Resources and Capability Utilisation

Through FDI, SEB can deploy its expertise across multiple regions and maximising asset utilisation. This improves the economies of scale and spread fixed costs over more project. Among other, SEB can deploy its:

- Offshore vessels

- Subsea engineering expertise

- Project management capabilities

 4. Potential Cost Advantages

 Operating in certain countries may provide:

- Lower labour cist

- Local tax incentives

- Preferential treatment for foreign investors

- Access to local suppliers and subcontractors

These advantages can improve project margins if managed effectively.

5. Long-term Strategic Positioning

FDI strengthen SEB’s positioning as global oil and gas service provider, enhancing:

- Brand reputation

- Competitive advantage

- Ability to bid for large, cross-boarder projects

Challenges of FDI for Sapura Energy Berhad

1. Foreign Exchange Risk

FDI exposes SEB to significant currency risk, including:

- Revenue earned in USD, THB, BRL and AUD

- Costs incurred in MYR or local currencies

- USD-denominated borrowings funding overseas operations

Exchange rate volatility directly affects profitability, cash flows, and debt-servicing

2. Capital Intensity and Financing Constraints

FDI in offshore oil and gas is highly capital-intensive, requiring:

- Vessel mobilisation,

- Equipment deployment

- Upfront working capital

For SEB, this is quite heavy as they are:

- In PN17 financial distress

- High leverage

- Limited access to new financing

FDI projects may strain liquidity rather than enhance value if not managed carefully.

3. Political and Regulatory Risk

Operating in foreign jurisdictions exposes SEB to:

- Regulatory uncertainties

- Political instability

- Local content requirement

- Changes in tax regime

These challenges may lead to project delay, cost overrun and renegotiation of the contract

4. Operational and Execution Risk

FDI projects increase operational complexity due to:

- Different legal systems

- Cultural differences

- Local labor regulations

- Coordination across borders

Poor coordination may erode the planned margin

5. Limited Risk Management Capability

Due to its distressed financial position. SEB faces:

- Limited access to hedging instruments

- Higher cost of risk mitigation

- Reduced financial flexibility

This weakens its ability to manage foreign exchange, interest rate, and country risk associated with FDI.

6. Negative NPV Project

Capital budgeting analysis for SEB’s Thailand project shown:

- High WACC

- Thin margin

- High initial mobilization costs

These factors result in negative NPV, meaning FDI destroys shareholder values despite of large contract values.

Benefits of FDI for Ancom Nylex

1. Market Expansion & Revenue Diversification

- By investing in foreign markets, particularly in agrichemicals, Ancom Nylex gains access to new customer bases in ASEAN and Latin America.

- This reduces reliance on the Malaysian market and stabilizes revenue streams across different geographies.

2.Economies of Scale

- Overseas production and distribution allow Ancom Nylex to scale up operations, spreading fixed costs over larger volumes.

- This is particularly relevant for proprietary herbicides like MSMA and Tebuthiuron, where global demand supports higher margins.

3.Strategic Positioning

- FDI strengthens Ancom Nylex’s role as Southeast Asia’s leading agrichemical manufacturer.

- It enhances brand recognition and positions the company as a regional supplier of essential chemicals.

4.Risk Diversification

- Exposure to multiple markets helps mitigate domestic economic downturns.

- For example, strong demand in Brazil for MSMA offsets weaker margins in Malaysia.

Challenges of FDI for Ancom Nylex.

1.Foreign Exchange Volatility

- As a net exporter, Ancom Nylex earns significant USD revenue. A stronger Ringgit reduces reported earnings, while a weaker USD erodes margins.

- FY2025 saw a forex loss of RM2.30 million due to unfavorable USD/MYR movements.

2. Higher Freight & Logistics Costs

- Expanding into foreign markets exposes the company to elevated shipping costs.

- In FY2025, freight costs surged due to geopolitical tensions, compressing margins in the agrichemical segment.

3.Geopolitical Risks

- Trade tensions and conflicts (e.g., Middle East disruptions, US-China tariffs) increase uncertainty in supply chains.

- These risks raise costs and complicate long-term planning for overseas operations.

4.Operational Complexity

- Managing compliance with diverse regulatory frameworks across multiple countries adds administrative burden.

- Differences in environmental standards, safety regulations, and tax policies can increase costs.

5.Profitability Pressure

- Despite revenue diversification, net profit fell 22% in FY2025 to RM63.49 million, showing that overseas expansion does not fully shield against global cost pressures.

Ancom Nylex’s FDI strategy provides long-term growth opportunities by expanding into high-demand agrichemical markets, but its success depends on effective risk management. The company must strengthen hedge accounting, optimize logistics, and diversify supply chains to mitigate forex and freight risks. Balancing these challenges with the benefits of global market access will be crucial for sustaining shareholder value.

However, FDI also presents various challenges that Khazanah must address. Geopolitical risks, currency fluctuations, and complex regulatory environments in foreign markets can expose Khazanah to potential losses and operational difficulties. Moreover, understanding local markets and managing foreign assets can be challenging, requiring substantial resources and expertise. Khazanah also faces the risk of economic dependence on foreign investments, which could be detrimental if global or regional markets face downturns. To optimize the benefits of FDI, Khazanah must carefully assess these risks and develop robust management strategies to ensure the long-term success of its foreign investments.

Key Benefits --> mostly for economic advantages

1. Market diversification & downstream growth

   FDI allows IOI to expand beyond Malaysia and grow higher-margin downstream businesses closer to customers. This reduces reliance on volatile CPO prices and improves earnings stability.

2. Supply-chain control & cost efficiency

   Overseas investments give IOI better control over production, logistics, and delivery. Shorter supply chains lower costs and improve responsiveness to global customers.

Key Challenges --> mostly govt. policy & regulation

1. Regulatory & ESG risk

   Palm oil faces intense environmental and labour scrutiny. Different host-country regulations increase compliance cost and expose IOI to reputational and operational risks.

2. Political & execution risk

   Policy changes, local opposition, and weak on-ground execution can delay projects and dilute returns on capital.