- 2008/11/04 No pullouts or job cuts by Dutch firms in Malaysia

Trade growth between Malaysia and the Netherlands may slow down amid the global financial crisis, but Dutch ambassador to Malaysia Lody Embrechts said there is no indication of a pullout or major job cuts among Dutch companies investing here. "The financial crisis, which had started in the US, has spread to Europe, Japan and Singapore. It would be foolish for me to say that there will be no impact here because international trade is such that we are all inter-connected," he said.

Embrechts was speaking to reporters yesterday after officiating at a seminar entitled "The Netherlands, Your European Partner in International Business" in Kuala Lumpur yesterday.

Malaysia's exports to the Netherlands in the past five years have risen from RM13.01 billion to RM23.59 billion in 2007.

Among Asean countries, Malaysia is the Netherlands' leading trading partner and the largest source of imports.

Embrechts said 55 per cent of Malaysia's exports to the Netherlands are consumer electrical and electronics, while another 20 per cent are palm oil products.

The Netherlands used to be the second biggest export market for Malaysian palm oil, but falling demand since 2007 has lowered its placing to third, after China and Pakistan.

Last year, Malaysian palm oil shipment into the Netherlands fell by 13 per cent from 2006's 1.67 million tonnes.

In the first three quarters of this year, it dropped by a further 20 per cent to 839,793 tonnes.

Major Dutch investors in Malaysia are oil company Shell, insurer ING, consumer electronics company Philips, logistics provider TNT Express, consumer products company Unilever and dairy company Dutch Lady.

Following the September 15 Lehman Brothers Holdings Inc's bankruptcy, the Netherland's biggest lender and insurer ING Groep NV had warned that it will likely post e500 million (RM2.27 billion) in losses, when it announces its third quarter results next week.

Last month, the Netherland government extended e10 billion (RM45.3 billion) to ING to help reduce the financial services provider's debt equity ratio from 15 per cent to 10.

Asked if the recent turn of events in ING Groep could result in drastic changes in its operations in Malaysia, Embrechts said: "In my recent meetings with Dutch companies here, including ING, there is no indication of any investment pullouts or job cuts."

"While the extent of this global financial crisis is unpredictable, it is important to note that governments around the world are doing what they can to prevent further wealth destruction by boosting confidence and bank lendings," he added.

He said ING in Malaysia is locally incorporated and strictly adheres to Bank Negara's rulings.

Meanwhile, Malaysian companies with investments in the Netherlands include commodity-based companies such as Petronas Base Oil Sdn Bhd, IOI Corp Bhd, Sime Darby Bhd and Kuala Lumpur Kepong Bhd.

To a question on IOI Corp's plans to produce biodiesel in the Netherlands, Embrechts said: "I've been informed that the plan will depend on the European Union politicians' impending decisions on Europe's biodiesel policy in the next few months. Whether it will materialise or not, we'll just have to wait-and-see."

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