Melaka’s bold strategic vision to transform and secure its economic future through diversified industrialisation and enhanced tourism is anchored on the ambitious Malacca Waterfront Economic Zone (M-WEZ and) Melaka Gateway maritime projects. 

Delivering this vision demands a delicate balance of protecting Melaka’s fragile ecosystem, honouring its rich cultural legacy and steering clear of bloated megaprojects, while building smart ports, efficient transportation and cutting-edge digital infrastructure. All this, as the state juggles the contrasting needs of farmers, fishermen and city dwellers.

These lofty aims seek to jumpstart Melaka towards a hi-tech and modern maritime future to position it among the top investment destinations in Malaysia.

Melaka still lags Selangor, Kuala Lumpur (Federal Territory), Johor, Kedah and Penang, among the country’s top investment destinations with combined investments of 318.9 billion and accounting for 84.3% of Malaysia’s total approved investments last year.   

In contrast, Melaka’s total investments, including foreign direct investments (FDIs), in first-half 2025 were around 2.25 billion ringgit (US$534.28 million), versus 8.18 billion ringgit in full-year 2024.

Against this backdrop, Chief Minister Datuk Seri Ab Rauf Yusof is driving industrialization by pitching Melaka as a top-tier investment hub, backed by pro-business policies, solid infrastructure, and a clear mission to grow the economy, create jobs, and raise state revenue.

The progress of the two megaprojects has so far been mixed, as the state grapples with a web of obstacles that prompted it to finetune parts of the enterprises.

Stung by the COVID-19 pandemic fallout on the services-heavy tourism sector, Melaka launched in 2021 the M-WEZ project, to be buttressed by new industrial zones and focused on workforce development, along with improved tourism infrastructure. 

Driving a Future-Ready Economy 

Stretching 25,000 acres (10,118 hectares) along 33 km of coastline, this mega-development is the crown jewel of Melaka’s Strategic Plan 2035. It’s gunning for 100 billion ringgit in investments over 15 years, 20,000 new jobs annually, and a 5% boost to state GDP. So far, it’s hit about 10% of that target, with thousands of job-generating initiatives in motion, government data shows.

The economic zone will hold five key clusters, including a harbour front, smart logistics nucleus, digital satellite township, eco‑business park, and trade township, incorporating tourism, commercial lifestyle, smart-city elements, 4th Industrial Revolution industries and maritime logistics.

The M-WEZ project sparked pushback from politicians and environmentalists over coastal damage, beach erosion, pollution, and the displacement of fishermen, largely driven by massive reclamation works along half of Melaka’s shoreline.

The state also aimed to leverage its strategic location on the Straits of Melaka and historical pedigree as a global maritime hub to develop the Melaka Gateway. 

Originally pegged at 43 billion ringgit, Melaka Gateway aimed to build four artificial islands with homes, businesses, a theme park, cruise port, and deep-sea container terminal that aspires to test Singapore’s maritime dominance. 

After technical setbacks and pushback from activists over environmental damage and displaced communities, plus doubts about the viability of another port, the state scrapped the project.

Revived after a legal battle in 2022, the project roared back with KAJ Development sealing deals with the state and Dubai’s economic authority. By 2023, fresh investors joined in, including the Sultan of Johor, now the second-largest stakeholder.

The project was, however, scaled down to a 682 million-ringgit cruise terminal. 

Slated for completion in late 2026, the Melaka International Cruise Terminal (MICT) -- touted as Southeast Asia’s largest -- aims for 7 million annual visitors, a bold target in relation to Penang’s 500,000 cruise visitors in 2023, and amid stiff competition from Penang and Port Klang.

Melaka Gateway’s push for large-scale tourism, industry, and commerce is set to be amplified by the Melaka Waterfront project, revamping the coastline and restoring the charm of its historic landscape.

Despite early hurdles, M-WEZ is drawing serious investors. LBS Bina Group and Oriental Holdings have teamed up on a 7 billion ringgit industrial project in Klebang, targeting high-growth SMEs in oil and gas, manufacturing, F&B, and logistics.

Chinese firm Cheng Ho International is pumping RM3.5 billion into seven Melaka projects, including an 88-storey ASEAN-China Tower in M-WEZ, while, Far East Melaka and its Chinese partners are rolling out more developments to position the state as a top-tier investment hotspot. 

Teladan Setia, Melaka Corporation (MCORP) and Jakel Capital are building the German Technology Park to attract 30 German firms and create 10,000 jobs. Cypark Resource is supplying green energy to the site, while Far East Melaka explores further M-WEZ investments.

‍

High-impact tech industries, helicopter hub

Melaka is zeroing in on high-impact industries like semiconductors and advanced packaging—powered by global giants such as Texas Instruments, Infineon, ATX Semiconductor, Renesas, Silterra, Globetronics, and Dynacraft.

Melaka is revving up its automotive, aerospace, and aviation sectors, eyeing a bigger regional role with strong potential in manufacturing, innovation, and maintenance, repair, and overhaul MRO services. The federal government has greenlit RM16.45 billion for a helicopter assembly plant at Melaka International Airport, led by Weststar Group. Set to launch in three years, it will serve as an MRO hub and generate high-skilled aerospace jobs.

Melaka’s helicopter hub ambitions are backed by top-tier aerospace training centres like UniKL, Malaysian Aviation Training Academy, and Aero Precision Resources --feeding a talent pipeline of over 6,000 skilled workers in composites, avionics, and advanced manufacturing. Industry giants like Airbus, CTRM, and Rolls-Royce are already on board.

To fuel the industry, Malaysia offers corporate tax breaks, import duty exemptions, and training support. To cement Melaka as a helicopter hub, it must lure top aerospace talent with irresistible incentives.

Melaka is gearing up its talent pipeline with the Aviation Centre of Excellence at Melaka International Airport, featuring flight training, MRO, and logistics hubs. Backed by Weststar Group and Italy’s Leonardo Helicopters, the initiative powers a new assembly plant and hands-on training. The TVET push sharpens aviation engineering skills, opening doors for students and workers to join the aerospace surge.

Melaka is fast emerging as a healthcare investment hotspot, drawing medical and pharma players like Intrinsique Health (clinical trial logistics), Xepa-Soul Pattinson (generics), Kotra Pharma (manufacturing), and Besformec Industries (medical products).

Though Melaka Gateway has been scaled back, the state’s strategic perch on the Malacca Strait gives it serious clout as an oil and energy port. Melaka Energy Park, run by Malaysian Refining Company Sdn. Bhd. (MRCSB), a unit of national oil company Petronas, produces 300,000 barrels a day, meeting 60% of Peninsular Malaysia’s fuel needs. Its Pasir Gudang complex handles diverse crude and churns out cleaner fuels like EURO-5 Diesel. 

T.A.G. Marine, operator of Kuala Linggi International Port (KLIP), believes that the port's strategic location and lower costs versus Singapore could attract oil majors and traders, potentially diverting some traffic from Singapore's congested port, amid industry estimates that KLIP could handle thrice the current volume within a decade.

In view of that, some of the key facilities and services that Malacca's ports could offer include KLIP's 1.5 million cubic meters of oil storage capacity. In addition, the nearby  Maharani Energy Gateway, located off the nearby coast of Muar on Johor can handle 60 million barrels of storage space.

KLIP’s dry docks and Maharani Energy Gateway’s 200-acre island are set to power ship maintenance and repair, while a potential KLIP–Toyota Tsusho–T.A.G. Marine alliance eyes bunkering services and a bold leap toward a global green hub for energy, port, and maritime solutions -- with sustainability at its core. 

With smart planning and bold execution, Melaka is well on track to become a tourism, manufacturing, aviation, energy and maritime powerhouse by 2035.

‍