Inside Sarawak 2011 by Investvine Admin

INSIDE Inside Investor is a first-in-class international media and consultancy company offering tailor-made services focused on identifying and developing investment opportunities across the globe for Middle East investors. We have on-the-ground intelligence business units screening and analysing markets as well as interviewing business, social and government leaders in order to highlight their insights and strategies and create synergies for our investors through various platforms, primarily Media, Consultancy and Forums. Our ultimate goal is to bring business partners together and pave the way for investors to gain useful and practical information about countries and regions that are investment friendly and have the potential for strong returns. It opens up a whole world for entrepreneurs who, through us, may view countries that were previously off the radar in a completely new light.

INSIDE SARAWAK 2011 PUBLISHED BY INSIDE INVESTOR LTD Asia Director: Imran Saddique Country Director: Arantxa Beltran del Toro Editorial Senior Editor: Nazvi Careem Editor: Layla Hall

Production Production Manager: R. Mangala Minachi Designer: Hafiz Sayid Ali Contributing Designer: LĂdia AldomĂ

Printed by: Gulf Business (UAE) Percetakan Osakar Sdn Bhd Circulation: Motivate Publishing: Gulf Business (UAE)

NOTICE: Inside Investor cannot accept liability for errors contained in the report, however caused. The opinions and views are not necessarily those of the publishers. No part of this publication may be reproduced without the prior permision of Inside Investor Ltd.

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CONTENTS 6

Interview with the Sarawak Chief Minister

Welcome note from the Sarawak State Secretary

Welcome note from Inside Investor

| SARAWAK OVERVIEW 12

Malaysia's Land of the Hornbills, Sarawak, puts out welcome mat for Middle East investors

Political stability crucial to state's economic growth

Tanjung Manis Halal Hub on course to become world’s leading halal SEZ

10 key industries to fuel SCORE investments

Press Metal keen to forge long-term partnerships based on trust & integrity

Japan giant Tokuyama has full confidence in Sarawak venture

Sarawak has everything investors need, says commerce chairman

| POWER 30

Sarawak taps into vast power potential to fuel socio-economic growth

White Rajah Era

Ministries under Datuk Tengah play important roles in forest protection and success of SCORE

SCORE and agro-based industries help Sarawak’s economy maintain strong growth figures

Norse-powered SEB ready to quench Sarawak’s thirst for energy

Reforms spur rapid economic growth as Sarawak offers incentives for foreign investors

Sarawak Hidro determined to fulfil its energy promises

Sarawak Cable powers up operations in bid to keep up with SCORE

| SCORE 18

Ambitious SCORE project ready to take Sarawak economy to the next level

SCORE chief Wilson has high hopes for the success of Sarawak’s most ambitious development plan

Sarawak State Planning Unit leads the way towards 2020 economic ambitions

SCORE offers made-to-measure investment solutions for Middle East companies

Samalaju Industrial Park and Tanjung Manis Halal Hub set standards for SCORE

| INFRASTRUCTURE DEVELOPMENT AND COMMUNICATIONS

Sarawak thrives on technological advances to boost development

MIDCom Minister eager to pave Sarawak with top-class road network

Miri Port seeks approval for major upgrades in bid to become top regional port

Foreign investors can click on to Sarawak’s surging internet growth

Mahmud stays focused as he juggles trio of Sarawak’s corporate giants

Sarawak has the land, you provide the investment, says MLDS chief

Cahya Mata Sarawak provides all-in-one expertise to satisfy SCORE expectations

Forest rangers revel in preserving Sarawak’s environmental treasures

Sarawak has talent and resources to provide top-notch ICT support

SALCRA bolsters commercial value of rural land development projects

Marine engineering giant HSL to build on Sarawak success

| TOURISM

SAINS sets new ICT standards for rest of Malaysia to follow

Sarawak tourism promotes unique attractions in bid to reach out to travellers

Sarawak tourism chief wants ‘Middle East enclave’ inside rainforest

Sarawak offers convention paradise for global conference organisers

| INDUSTRIES 46

Improved transport network boosts links between Sarawak's key industrial zones

Bintulu primed for investment frenzy

X-Fab chief hails Sarawak as future tech stronghold

| HUMAN CAPITAL & QUALITY OF LIFE

Sarawak timber body sows seeds of change to help expand wood-based industries

Swinburne’s Sarawak campus enjoys best of both worlds

Forbes-listed KKB Engineering provides crucial support for SCORE’s major players

Curtin Sarawak eager to boost its presence in the region with world-class courses

Stable Sarawak a safe bet for investors, says SEDC chairman

Trienekens proud of Sarawak clean-up job

Malaysia LNG has confidence in Sarawak’s future amid economic development

| COMMODITIES 57

TMHH aims to become global centre for halal products and services

Deputy Chief Minister Datuk Alfred happy to help enrich lives of junglefolk

68 Hospitality

Special Thanks to:

Government of Sarawak

Interview with the Sarawak Chief Minister Chief Minister Taib confident Sarawak can continue building on 30 years of growth After 30 years of steering Sarawak through choppy waters, the real work has only just begun for Chief Minister Taib, who is firmly at the helm as Malaysia’s largest state enters a new era of economic diversity Pehin Sri Haji Abdul Taib Mahmud | Sarawak Chief Minister

ince taking office in 1981, Sarawak’s Chief Minister Pehin Sri Haji Abdul Taib bin Mahmud has overseen a period of unprecedented growth in many facets of Sarawak life. Gross Domestic Product has risen to a RM78 billion in 2010 from RM6.5 billion. The majority of the population now have access to clean water, as opposed to only 31 per cent in 1980, and hard-core poverty is less than one per cent. He has also achieved much on the social front, successfully integrated an array of racial and religious groups in a region of Malaysia that boasts more than 30 ethnic and subethnic groups. However, for the Chief Minister, this is only the beginning. If the past 30 years has been a period of hard graft and sowing the seeds of development for Sarawakians, the next 30 promises an era of harvesting the fruits of their labour. Chief Minister Taib has helped Sarawak finally break free from an economy totally dependent on agriculture, timber and palm oil to one that has embraced heavy industries, technology, biotechnology and financial services, among others. His SCORE (Sarawak Corridor of Renewable Energy) programme, which was launched in 2008, has galvanised the state’s private sector. The economy, shaken out of its agrobased slumber, is poised to reinvent itself with local companies looking to diversify and foreign investors eager to join the party. It is all part of Chief Minister Taib’s ambition for Sarawak to become a developed region by 2020 in line with federal government targets and a high-income economy by 2030. “SCORE is Sarawak’s way of trying to diversify our economy further, from agro-based to heavy industries,” said Chief Minister Taib.

“We have been quite successful in attracting energy-intensive investments and now we have the potential for 28,000 megawatts of electricity, 20,000 of which will be hydro-powered. “We have more than half a billion tonnes of coal, which we can develop. It is much cheaper to generate electricity that way, rather than importing coal over a long distance.”

"We have been quite successful in attracting energyintensive investments and now we have the potential for 28,000 megawatts of electricity." Providing adequate power is crucial to attracting investors for heavy industry projects and the Bakun Dam in Bintulu will be fulfilling much of the energy requirements for the area, especially Samalaju Industrial Park (SIP), which is part of SCORE. Chief Minister Taib said SIP was only one part of a SCORE trifecta, the other two being the Tanjung Manis Halal Hub in Mukah producing food and pharmaceuticals, and ecotourism. “There are three segments of SCORE. The heavy industry has an advantage in that we are able to provide a reasonably cheaper supply of energy,” he said. “So we are able to gain interest from aluminium smelters, polycrystalline silicon manufacturers and all the downstream indus-

tries. “I’m now hard-pushed to quicken the pace of electricity generation because they request so much. I’ve now got investment of about RM26.4 billion.” Of this, he said, 20 per cent are locally owned while 37 per cent are fully owned by foreign interests. The rest comprise joint ventures. “We are not very rigid about who owns what,” said the Chief Minister. “Heavy industry is something that will benefit the country. I believe there will be a lot of positive spinoff effects for local people who have smaller industries.” In terms of halal products and ecotourism, Sarawak is tailor-made to promote these industries given its large Muslim population and vast natural resources.

CAN-do attitude During the Invest Malaysia Forum 2011 in January in Abu Dhabi, several Gulf players expressed interest in the Tanjung Manis Halal Hub. Gulf investors are poised to pour an estimated RM650 million worth of investments into the 77,000-hectare TMHH, with three MoUs signed in January, with the focus on food security on a global scale. During his tenure, Chief Minister Taib has worked to promote Sarawak’s diverse cultures to the world, as well as to fellow Malaysians. To that end, ecotourism plays a major role in SCORE on a platform he calls “CAN”. “We are very proud of our history and culture,” he said. “And we are very caring towards nature. So our tourism is based on what is called the “CAN” concept – culture, adventure and nature. I have developed four or five destinations over the years to enable me to expose the country to the customs, culture and heritage of

the area through festivals.” These festivals involve food, games such as water sports and, especially music, with the International Rainforest Music Festival already established as one of the region’s leading musical extravaganzas. Infrastructure development has been a great boon to the lives of people living in Sarawak. The strategic areas of SCORE will be connected by a new rail link spanning the entire project of more than 350 kilometres.

Roads to success River ways will be turned into transport routes via river taxis and new roads will be built. Chief Minister Taib said the road network is one of main aspects of development in order to bring rural communities out of remote areas. “We used to have only 4,000 kilometres of road in Sarawak,” he said. “And most of the roads were not properly surfaced. Isolation was the biggest problem I had. There were more than 5,000 settlements, where 3,000 had less than 50 families, right in the middle of nowhere, connected by rivers. That was the biggest stumbling block I ever met.” He said during his time in charge, more than 18,000 kilometres of roads were built and there is more to come with new industries and cities sprouting across the state. People’s lives have also improved with per capita income rising to RM34,000 from RM4,000 when he first took over. The target is for RM50,000 by 2020. “As a result of the diversification programme, I have created industries here and there and now about 51 per cent of people have moved into urban settings, compared to 30 per cent before,” he said.

Rural development However, he said it was not all about encouraging people to move to the city but rather developing the remote areas. “This has always been the main push because this is our hinterland. This is where we find our resources and our wealth. So, we have to make it as comfortable as possible. “We don’t want to make the towns too big and one of my master plans was to make sure Sarawak doesn’t become over-crowded in the towns.” He expects the population of cap-

ital Kuching to be about 1.2 million by 2020 while other major towns will have no more than 400,000 people. Technology is also playing a part in improving the lives of people, with broadband internet connections gradually reaching remote areas. The Chief Minister said broadband penetration in rural regions is now about 13 per cent compared to less than one per cent several years ago while mobile phone usage is at 65 per cent. “So, communication is increasing. There is now a proper network,” he said. “This is a process of mental transformation and it must take place on the ground.” Chief Minister Taib gives plenty of credit to the people of Sarawak for their determination to succeed. With more education institutions moving into Sarawak, there is a fresh focus on academic pursuits.

"The basis of my political development was to have mental transformation, political transformation and cultural transformation. In culture, everybody is moving ahead in the same direction" Changing mind-sets “Attitudes are changing fast,” he said. “People here have a high priority on education and they like to work hard. They are very focused. Not just education but quality education.” However, his biggest compliment for the people of Sarawak was his praise for their ability to change mind-sets and their willingness to embrace unity. “To me, it is more about the intangibles,” said Chief Minister Taib. “People are more united, despite the fact they’re different races, colours, languages, religions and cultures. “The basis of my political devel-

opment was to have mental transformation, political transformation and cultural transformation. In culture, everybody is moving ahead in the same direction. All cultures are different but they start to meet now and blend. “Also, our ethics are very important. The people of Sarawak were poor people before. But we keep our determination to work hard and have seen a lot of changes due to that mentality.” He said Sarawak has spent RM3 billion every year for the past 25 years in order to better the lives of its people. “Until 10 years ago, that was more than what the federal government spent,” said Chief Minister Taib. “But it’s okay because it transforms the country.” And the transformation will continue over the next few decades, he vowed. As he looks forward to the future, Chief Minister Taib said Sarawak’s success as it drives towards a new era will depend on the same human principles that initially brought them to global prominence “It's based on good understanding of the people, the environment, our resources, our strengths and our weaknesses,” he said.

Sarawak stalwart Chief Minister Taib is one politician who can relate to the people, having been born to humble surroundings in Miri in 1936. Brought by his uncle, Abdul Rahman Ya’kub, he attended St Joseph’s Primary School in Miri and St Joseph’s Secondary School in Kuching before taking up law. He excelled in his exams, winning a Colombo Plan scholarship that enabled him to further his studies at the University of Adelaide in Australia, graduating in 1960. Known affectionately as the “White-Haired Uncle” by Sarawakians, the Chief Minister began his political life in 1962 and was appointed state minister for Communication and Works in 1963. He was also Minister of Development and Forestry as well as Federal Assistant Minister for Commerce and Industry from 1968 to 1970. Representing Parti Bumiputera Sarawak, he was elected to the Malaysian Parliament in 1970 and held a number of important federal posts before becoming Sarawak Chief Minister in 1981. He remains the longserving state leader in Malaysia.

Welcome note from the Sarawak State Secretary Dear Friends Sarawak has long enjoyed a unique status within the Malaysian Federation, not only as the countryâ&#x20AC;&#x2122;s largest state but also as a template for building an economy based on natural resources. However, Sarawak is now on the cusp of a new era; a period in which our future will be defined based on the hard work, creativity and commitment that we apply over the next few years. The people of Sarawak deserve praise for their loyalty and dedication to the state and country over the past few decades. We have made best use of a rich environment that boasts pristine rainforests, oil and gas, minerals and palm oil, among others. But while an agro-based economy has so far served Sarawakians well, it is time to move forward and embrace other industries and sectors. The Sarawak Corridor of Renewable Energy (SCORE) is the cornerstone of the new-look Sarawak economy. And, along with other socioeconomic programmes, we are looking forward to fulfilling our goals of becoming a high-income state by 2020 and achieve developed status by 2030. However, it is important to understand that, although Sarawakians are blessed with fortitude and talent, we cannot do this alone. It is imperative that we open up our economic doors to the outside world and put out a welcome mat for those who wish to join us in our adventure. That is why this investment report, Inside Sarawak, is crucial to overall success of our economic strategy. Inside Sarawak is aimed at potential investors from the Middle East who wish to put their money in safe havens and who want tangible returns from their investments. Sarawak, with its stable government, consistent economic policies and business potential, can meet the demands of investors from the Gulf Cooperation Council (GCC) countries at all levels. We can give them an abundance of natural resources, space, energy and, most importantly, skilled human talent. We have the tools to give investors the means to profit from their joint ventures and partnerships. When it comes to seeking investment from the GCC, Inside Sarawak has identified a potentially lucrative market. With the once-mighty economies in the United States and Europe now suffering, more people are looking east, particularly Asia, for better economic climes. Malaysia and Sarawak are at the forefront of Asiaâ&#x20AC;&#x2122;s booming economies. We are particularly attractive to GCC interests because of our strong Islamic links, as highlighted in the rapid development of the Tanjung Manis Halal Hub, which is part of the SCORE project. Malaysia is well known as a tourist destination for Middle Eastern travellers. However, we now have the opportunity to lure them beyond Kuala Lumpur and ask them to enjoy a vacation among the rainforests and exotic wildlife in Sarawak while continuing to cater for their shopping and entertainment requirements. More heavy industries are also moving into Sarawak with companies from Japan, Hong Kong, India, Australia, Middle East and other countries making use of the Samalaju Industrial Park in Bintulu, where aluminium, manganese, polycrystalline silicon and other products are being manufactured. The Bakun Dam is one of many power zones that will provide sufficient energy to drive heavy industries and other sectors while the expansion of roads, an extensive rail link and upgraded ports will ensure world-class logistical solutions. As State Secretary, my most important role is to be a catalyst to modernise the Sarawak Civil Service (SCS) so that it can meet with the challenges that we now have in trying to become a high-income economy. I want the SCS to be proactive and to be world-class because we now have to deal with foreign investors and foreign workers, and we must be able to respond and interact properly to form productive relationships. As we improve our investment climate and provide good jobs for our people by working together with everyone, we would have served our people well. For Middle Eastern investors, I would say come with your technologies and markets, and we will work closely with you to provide the basic infrastructure that you require at a price that will be mutually beneficial to you and Sarawak. We will make sure that Sarawakians play an active role in any major project, whether it is from foreign investment or local. As I mentioned, Sarawak is entering a new era and we would love to have our friends from the Middle East join us as we move forward. I would like to thank Inside Investor, the publishers of Inside Sarawak, for its timely report and I hope this publication will help to bring more foreign investment to Sarawak and help to strengthen the business and social links between our state, our country and our friends from the GCC.

Yours Sincerely Datuk Amar Haji Mohamad Morshidi Bin Abdul Ghani State Secretary Sarawak

Welcome note from Inside Investor

Dear Friends Sarawak, as an investment destination, has been one of the world’s best-kept secrets for many years. Now, with the state government forging ahead with ambitious plans to develop the economy and achieve high-income status by 2020, it is high time the rest of the world knew about the wonderful opportunities available in Sarawak. Nowhere else in the world is the mood for investment as high as in the Middle East, where investors are looking to Asia for signs of life given the economic downturns in the United States and Europe. Inside Sarawak is a unique investment report in that it has been tailor-made for the investment community in the Gulf Cooperation Council (GCC) countries. The genesis of this investment report goes back to January, 2011 when we organised the “Inside Malaysia Forum 2011” in Abu Dhabi, United Arab Emirates, where we launched a similar investment report for the whole of Malaysia. A 100-strong Malaysian delegation, led by Prime Minister Dato Seri Najib Tun Razak, wowed their GCC hosts with eye-opening information on investment opportunities in the country. Also present was a strong Sarawak delegation led by Chief Minister Pehin Sri Haji Abdul Taib Mahmud and top state and business leaders. The Chief Minister saw what we had done for Malaysia and wanted a similar report compiled for Sarawak. And after many months of researching, interviewing and analysing data, we are now proud to present you with Inside Sarawak 2011, our humble effort to showcase Sarawak’s vast business opportunities to eager Middle East investors. We spent months talking to top government and business leaders and forged strong bonds with the people behind Sarawak’s success. What struck us was the sheer commitment and determination shown by all stakeholders in doing their part for the sake of Sarawak and Malaysia. The Sarawak Corridor of Renewable Energy (SCORE) programme is one example. SCORE opens up a whole new arena of business prospects with Sarawak trying to diversify from a largely agro-based economy to one that embraces heavy industries, technology and services. The SCORE nodes of Samalaju Industrial Park, Tanjung Manis Halal Hub and eco-tourism have already attracted significant interest from abroad, including the Middle East, while the Bakun Dam and other hydro-electric projects will ensure that Sarawak can provide sufficient and affordable energy to power the various industries. The beauty of such programmes is that they benefit the state in many facets of life, be it economic or social. I would like to thank the Chief Minister, the state government of Sarawak, the State Planning Unit and all the Ministries, Agencies and companies that went out of their way in helping us put this report together. I am confident that Inside Sarawak will become an important tool in convincing investors from the Middle East and elsewhere that Sarawak is a safe and profitable place to put their money.

Yours truly Imran Saddique Asia Director Inside Investor

SARAWAKâ&#x20AC;&#x2122;S MAIN ECONOMIC ACTIVITIES BY DIVISION

Thailand

Philippines

Malaysia

Indonesia

Agriculture Fishing Australia

Agriculture Tourism

LEGEND State Capital Town Airport National Park Corridor Growth Node (SCORE)

Gateway High-tech Industry Finance Tourism Services

TG. MANIS

Tanjung Datu National Park Gunung Gading National Park Education Medical Agriculture Food Production

SARIKE Bako National Park

KUCHING

SAMARAHAN

SRI AMAN Semenggoh Wildlife Rehabilitation Centre

Tourism

Agriculture

Plantation

Tourism

Manufacturing Petrochemical

Commerce

Energy Intensive Industry Plantation

Lawas LIMBANG MIRI

Timber Processing Sago Plantation Tourism

Marudi

Niah Caves National Park SAMALAJU Samalaju National Park

Education

BINTULU

Gunung Mulu National Park

Ba'kelalan Bareo Loagan Bunut National Park Long Seridan

Dalat MUKAH

Belaga

Long Semado

Long Lellang Long Bunga

BARAM

SIBU

KAPIT

TUNOH

Logging Coal

Batang Ai National Park

Hydro Power Tourism

Ship Building Tourism

SARAWAK OVERVIEW

Malaysia's Land of the Hornbills, Sarawak, puts out welcome mat for Middle East investors The largest state in Malaysia has a colourful history that encompasses the ‘White Rajahs’, colonial rule and finally, integration into Malaysia. It is also blessed with stunning rainforests and natural resources that has sustained an amazingly diverse ethnic population for centuries.

arawak began their emergence as an integral part of Malaysia after they joined the Federation in 1963. However, Sarawak's recorded history goes back hundreds of years with the past two centuries, in particular, providing a period of dramatic change and development that has shaped the modern fortunes of Malaysia's largest state. Historians say evidence of modern man in Sarawak goes back some 40,000 years, though it was only in the last 5,000 years that the aborigine populations now residing in Borneo migrated to the area. Arab traders brought Islam to the region in the 14th Century and, after a period of self-government, the region surrounding Kuching eventually became part of the Brunei Sultanate. The middle of the 19th Century marked the start of Sarawak's British legacy with James Brooke becoming the first “White Rajah”, the first of three Brookes who would rule the state for more than 100 years. Japanese occupation and sovereignty under the British crown eventually made way for independence culminating in the creation of the Malaysian Federation in 1963.

Natural Resources With a land area of more than 124,000 square kilometres, Sarawak is the largest state in Malaysia and is also the richest in terms of natural resources and biodiversity. The environment is dominated by rain-forest and, as a result, timber is by far its main economic driver. Sarawak remains among the world's leading exporters of tropical-sourced timber. Although years of logging has depleted rain forests in many areas, the Sarawak Government has implemented a number of programmes, including the Log Export Restriction Policy, that places a premium on value-added processing to manage the industry. In 1994, Sarawak established the National Resources and Environment Board to protect and manage the envi-

ronment, in addition to enhancing conservation efforts, in order to promote sustainable development of its natural resources. Logging is only part of Sarawak's multitude of businesses derived from natural resources. The state has thriving crude palm oil and natural gas industries.

"Sarawak boasts some of the most diverse and numerous flora and fauna in the world. The government is implementing a number of conservation initiatives in order to protect endangered species." Minerals is another major product from a terrain and subterrain that produce metallic and non-metallic resources. Kaolinitic coal, clay and silica sand, aluminium and gold deposits are testament to Sarawak's mineral diversity. Agro-based food processing, petrochemicals and gas and ship-building are among the other major industries in Sarawak, while the government is promoting the development of biotechnology and electronics and other viable sectors to boost the economy and create jobs. Sarawak boasts some of the most diverse and numerous flora and fauna in the world. The government is implementing a number of conservation initiatives in order to protect endangered species. The Heart 2 Heart campaign seeks to protect

12 INSIDE INVESTOR | WWW.INVESTVINE.COM

orangutan and turtle populations while efforts are also underway to save the Irrawaddy dolphin and dugongs. The Reef Ball project is designed to revive marine ecosystems by sinking artificial reefs into the sea. Sarawak's lush and striking environment needs to be seen to be believed and that is why tourism also plays a key role in the local economy. In 2010, more than 3.2 million tourists from overseas and Malaysia visited the state, which is targeting 4 million visitors for 2011. The administrative and commercial capital of Sarawak is Kuching, which has a population of close to 600,000. Other major cities include Miri (population 260,000) and Sibu (population 250,000). Indigenous Ibans form the biggest ethnic group in Sarawak at 34 per cent of the population while the Chinese, who first arrived at these shores in the sixth century, make up 26 per cent. Malays (21 per cent), Melanaus, Dayak Bidayuh and Dayak Orang Ulu also make up significant portions of the population. In addition, there are more than 30 tribes native to Sarawak that thrive throughout the state. Kuching is the centre of government for Sarawak, its financial hub and the fourth-most populous city in Malaysia.

Diverse Cultures Miri is in northern Sarawak and is the home of the country's petroleum industry. The first oil drill in Malaysia was built in Miri, in 1910, by Shell. Ibans, Chinese and Malays dominate the ethnic landscape in Miri, which is also home to dozens of other races and tribes. Sibu, in eastern part of Sarawak, is an inland city and well-known tourist destination, especially for the many visitors wanting to see the famous longhouses of the Iban and Orang Ulu people along the Upper Rajang River. The city has a rich Chinese culture and is one of the few places in Malaysia where Chinese writing is displayed on street and traffic signs.

SARAWAK OVERVIEW

Political stability crucial to state's economic growth Sarawak has been ruled for decades by the Barisan Nasional party, which recently won a fresh mandate during state elections. The government believes political stability is an important factor in ensuring continued prosperity.

he state of Sarawak, which dominates the northwest coast of Borneo Island, has established itself as an impotant member of the Malaysian Federation. The famous “Land of the Hornbills” is laden with natural resources and rainforests that drive a thriving economy built on strong fundamentals and a stable government. Political stability allows the Kuching government to pursue economic and social policies that not only benefits domestic interests but also lures foreign investors to make the most of Sarawak's rich natural resources and skilled local talent. The victory by ruling party Barisan Nasional at the recent state elections has galvanised the regional government, which has been bolstered by the people's mandate to forge ahead with ambitious economic plans. Boosted by the federal government's National Key Result Areas programme, Sarawak has secured an additional RM5.7 billion to strengthen infrastructure while its flagship SCORE (Sarawak Corridor of Renewable Energy) effort is the platflorm on which Sarawak hopes to become a high-income economy in line with the 10th Malaysia Plan to achieve developed nation status by 2020. Sarawak Chief Minister, Pehin Sri Haji Abdul Taib Mahmud, in a recent speech, acknowledged the importance of maintaining political stability in order to foster greater economic and social prosperity. He said the state's economic progress “can only be carried out by a leadership that has the experience and continuity in the administration. “Sarawak will not have the capability to provide efficient services to the people and move further ahead without political stability,” he added. BN's triumph is of significant in-

terest to local and overseas investors, who largely welcomed the twothirds majority victory because of the continuity a stable government will provide for large-scale projects that have already been launched. The coalition has been governing Sarawak since 1973. Prior to that year, it was known as Perikatan, which is the former incarnation of a smaller ruling alliance of parties. The current government comprises 13 parties the represent the entire racial, cultural, geographical and religious spectrum of Malaysian society and includes four Sawarakbased organisations. These parties are: the United Bumiputera Heritage Party, the Sarawak United People's Party, the Sarawak Progressive Democratic Party and the Sarawak People's Party.

"Sarawak will not have the capability to provide efficient services to the people and move further ahead without political stability" BN has been wooing investors from around the world and the lure of political stability and continuity in regions such as Sarawak can act as a magnet for foreign money to be ploughed into the state. Sarawak has a vibrant workforce who are bursting to unleash their talents, both managerial and manual, and are keen for big businesses to come into the state with their mega

projects. Barisan Nasional's victory could well be the green light for overseas corporations to start making their mark in northwest Borneo. “Unity and political stability are Sarawak’s greatest assets for attracting foreign investors to come in with their bulky investments,” said Pehin Sri Taib. “Besides these values, discipline among the younger generations is also important for attracting investors.” Pehin Sri Taib is the fourth and longest-serving chief minister of Sarawak. He assumed the post in 1981 and in the past 30 years he has overseen steady and progressive developments in the state's political and economic landscape. Having endured years of success and inevitable challenges to his leadership and reputation, Pehin Sri Taib played an influential part in BN's victory in the state elections. At 75 years old, he is also the second longest serving parliamentarian in the national government, though he said recently that he would hand over the Sarawak reigns to a younger leader in the next few years. Under his watch, Sarawak's economy has grown dramatically, with Gross Domestic Product rising from RM6.5 billion in 1981 to RM74 billion in 2009. Hard-core poverty has been eased and almost the entire population of Sarawak now has access to fresh water, compared to 32 per cent 30 years ago. In its quest to achieve high-income status by 2020, Pehin Sri Taib is upgrading the education system to ensure Sarawak continues to produce talented and skilled personnel. Sarawak has indeed come a long way politically and, with continued stability at government level, the state is ready to meet and overcome all economic and social challenges.

INSIDE SARAWAK 2011 13

SARAWAK OVERVIEW

White Rajah Era Before true British colonialism, Sarawak was governed by a dynasty of rulers from Britain. Known as the ‘White Rajahs’. James Brooke was the first of these foreign sultans when he started his reign in 1842.

arawak can boast a politcal history unlike any other during the expansion of British colonial rule in Asia. The “White Rajah” era that lasted 100 years can best be described as a colonial dynasty, established by James Brooke in 1841. The era is part of a colourful, eventful and turbulent period for Sarawak before they joined the Malaysian Federation in 1963, and included Japanese occupation and nearly two decades of British crown rule. Sarawak's modern history truly began in the 19th Century with the arrival from Britain of James Brooke, the first white man to govern the territory as its de facto “king” and who passed on rule to male “heirs”. In 1841, at the behest of Sarawak ruler Pangeran Muda Hashim, Brooke and the crew of his schooner, The Royalist, helped to appease a tribal uprising against the Sultan of Brunei, Omar Ali Saifuddin II.

Sultan Brooke The Sultan appointed Brooke as Rajah of Sarawak on August 18, 1842 in a move that would change forever the fortunes and culture of a people that had never previously been subjected to Western leadership. After his death in 1668, James Brooke was succeeded by his nephew Charles Anthoni Johnson Brooke. Charles' son, Charles Vyner Brooke, succeeded his late father in 1917 and began to rule Sarawak in consultation with his brother Bertram Brooke. A feature of the Brookes' White Rajah reign was their commitment to protecting the culture and environment of the indeginous tribes of Sarawak from exploitation. They also expanded the territories that would come under the Sarawak jurisdiction, at the expense of the

ever-declining realm of the Brunei Sultanate.

WWII and the rebel Rajah As the last ruling Brooke was about to embark on changing Sarawak's constitution in 1941 to provide for a more democratic foundation, Japanese forces invaded Miri and Kuching in December that year. The occupiers stayed until 1945 when Sarawak was freed by Australian troops during the dying stages of World War II.

To say that Sarawak has a tribal culture is an understatment. There are more than 30 indigenous tribes in the area, making Sarawak one of the most ethnically diverse regions in Asia One year later, Charles Vyner Brooke, somewhat reluctanty but with great personal reward, ceded Sarawak to the British Crown, which ruled the territories of Malaya as a colony until independence in 1963. As a side story to the end of the Brooke era, Bertram's son, Anthony Brooke, was appointed Rajah Muda (heir to the leadership) in 1937. After twice losing the title, he opposed giving up Sarawak to British colonial rule and continued to claim leadership of the region. He was also under investigation

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by Britian's MI5 following the assasination, in 1948, of Sarawak's second colonial governor Duncan Stewart. Anthony Brooke eventually gave up his claims to being the Rajah of Sarawak in 1951. He had previously been banned from Sarawak for a total of 17 years and was only allowed to return after the state became part of Malaysia in 1963. He died in March, 2011.

Cultural change The White Rajah era changed the landscape of regional politics forever, the legacy of which can still be seen in culture and society today. During the Brookes' rule, the Muslim Malays emerged as a powerful political force and were heavily involved in governing the territory. The indigenous Ibans and other tribes, meanwhile, were called upon to serve as militia outfits. To say that Sarawak has a tribal culture is an understatment. There are more than 30 indigenous tribes in the area, making Sarawak one of the most ethnically diverse regions in Asia. An already colourful mix of races and tribes became even more spectacular during the Brookes' regime with the influx of tens of thousands of ethnic Chinese to Sarawak, causing a dramatic demographic and cultural shift in population. Known as a resourceful and entrepeneurial group of people, the Brookes encouraged their immigration and now the Chinese make up more than a quarter of its 2.4 million population. With such diverse ethnic groups and cultures, the best way to ensure political and social stablity was through the democratic process, which came about in its true form in 1963 after Sarawak joined the Malaysian Federation.

SARAWAK ECONOMY OVERVIEW

SCORE and agro-based industries help Sarawak’s economy maintain strong growth figures Despite the global downturn, Sarawak has maintained steady growth over the past few years helping the state to beat predictions and post strong figures.

arawak’s economy is one of the strongest among the 13 states of the Malaysian Federation with steady growth fuelled by traditional resource-based industries and fresh initiatives. With the implementation of long-term programmes, the government is predicting 500 per cent growth over the next 20 years. In 2010, the state beat expectations with economic growth of 5.4, surpassing earlier projections of a 4.5 per cent increase as a result of the global slowdown. The Sarawak Corridor of Renewable Energy (SCORE) programme is one of the main drivers of growth as the state seeks to diversify its economy from agro-based to one that encompasses heavy industries, food security, technology and other services. Sarawak Chief Minister Pehin Sri Haji Abdul Taib Mahmud is determined to move the state towards developed status by 2020 through SCORE and other programmes and has largely been successful in his efforts. Malaysia’s largest state remains one of the world’s leading exporters of timber and LNG. However, SCORE has helped to convince mega-players such as Japan’s Tokuyama, Rio Tinto Alcan, Sea Party International, from Taiwan, and a host of top Sarawak companies to invest in the region.

Widen horizons “In order to ensure sustainable growth, we need to widen our economic perspective and diversify our economy so that we are not dependent on traditional economic activities,” said Chief Minister Taib earlier this year. “The transformation of the state economy is no longer an exercise to restructure the traditional economic

sectors such as timber and agrobased industries. Instead, we are increasing value-added activities of timber and agriculture products such as transport and communications. “Most importantly, the transformation must involve the creation of new sources of economic growth.” According to the state government, the manufacturing sector was expected to achieve 4.5 per cent growth in 2010, after experiencing a contraction of 0.1% in 2009. The expected growth is in keeping with the increase in global demand for goods Sarawak specialise in, particularly LNG and wood-based products.

gas pipeline and the Murum hydroelectric dam. Construction for the Tenth Malaysia Plan was expected to expand this sector by 6 per cent in 2011. The mining and quarrying sector forecast was 3.2 per cent growth in 2010 with increased production for natural gas, coal and silica sand in the first half of the year. The production of natural gas grew by 17.4% arising from increased demand from domestic petro-chemical industries and major importing countries. The sector was expected to grow at 3.0% in 2011.

Despite the global downturn, Sarawak has maintained steady growth over the past few years helping the state to beat predictions and post strong figures.

A key promise of the 2006 economic blueprint was to modernise the agricultural industry. And the sector obliged by growing 5.2 per cent in 2010 as a result of the rebound in commodity prices and improved global demand. This performance was considerably higher than the growth in Malaysian agriculture as a whole, which expanded by 3.4% in 2010. The production of crude palm oil grew by 7.8% during the first half of 2010. In 2011, the agriculture sector was anticipated to grow at a reduced pace at 4.3% because global demand was expected to soften. Plywood exports were expected to increase by between 10 and 15 per cent in 2011, accounting for 53 per cent of the state’s total export values, or RM848 million. The first quarter of 2011 saw 588,152 cubic metres of plywood shipped out of Sarawak. The second biggest commodity in terms of exports is log and there were 1.8 million cubic metres of the product sent overseas from Sarawak. Palm oil is also a major export product for Sarawak and the state expected 15 per cent output growth to 2.5 million tonnes in 2011. The

Exports of manufactured goods recorded double-digit growth in the first half of 2011 at 21.6% while the manufacturing sector was expected to expand by 4.5 per cent in 2011. There were also impressive performances for the construction, mining/quarrying, agriculture and services sectors in 2010. The construction sector growth was predicted at 6.5%, boosted by the RM1 billion Special Federal Allocations and the construction of projects under the Ninth Malaysia Plan, including the new Sabah-Sarawak

Agriculture

INSIDE SARAWAK 2011 15

SARAWAK ECONOMY OVERVIEW commodity is set to become a major part of Sarawak’s future exports with three million hectares of agricultural land yet to be cultivated. In 2010, Malaysian Palm Oil Board data showed that both Peninsular Malaysia and Sabah's crude palm oil output fell by six per cent and three per cent to 9.5 million tonnes and 5.3 million tonnes, respectively. Sarawak's production, however, went up by 9 per cent to 2.2 million tonnes.`

Higher growth The services sector was predicted to grow by 7.2 per cent in 2010 thanks to robust trading activities. For the first half of 2010, cargo-related activities at ports in Sarawak increased by 11.6% compared to the second half of the previous year. The air transport segment grew as passenger volumes for all principal airports state-wide rose by an average of 9.5% and the air cargo handled increased by 23.1% during the same period. Expected growth for this sector in 2011 was 6.4%. The breakdown of Sarawak’s GDP share by sector for 2010 is 32.3 per cent for Services; Manufacturing (24.7 per cent); Mining and Quarrying (24.6 per cent); Agriculture, Livestock and Fishery (11.8 per cent); Forestry and Logging (3.4 per cent); and Construction (3.2 per cent).

There were also impressive performances for the construction, mining/ quarrying, agriculture and services sectors in 2010. In 2009, the State received RM11.546 billion in capital investment for manufacturing projects – RM9.936 billion Foreign and RM1.598 billion Domestic. The approved capital investment was mainly for Petroleum and Other Related Products (RM9.832 billion), Non-Metallic Mineral Products (RM753 million), Chemicals and Chemical Products (RM331 million) and Food (RM255 million). The State produced 1,995,800

tonnes of Crude Palm Oil in 2009; 26,700 tonnes of Rubber; some 23,000 tonnes of Pepper (White and Black) and 1,300 tonnes of Cocoa Beans (raw and roasted). Under the production of Forest and Forest Products, in 2009, the State produced 10,368,000 m3 of Saw Logs; 2,856,000 Poles; 2,480,000 m3 of Plywood; 1,037,000 m3 of Sawn Timber as well as other products such as Veneer, Woodchips, Laminated Boards, Mouldings/Dowels and Charcoal. The state government is working on increasing the per capita income of the people of Sarawak from RM23,796 in 2010 to RM50,992 to enable the state to achieve a developed status by 2020.

500 per cent expansion Meanwhile, the government said SCORE would help Sarawak’s economy would grow more than 500% in the next 20 years by 2030, as more business opportunities in manufacturing, construction and services are taken up by investors in the Corridor. Because of this activity, more than one million jobs will be created, rising from 949,100 in 2009 to 2.5 million by 2030. SCORE is one of the five regional development corridors throughout Malaysia and will transform Sarawak into a developed state by the year 2020. It aims to accelerate the state's economic growth, as well as improve the quality of life for the people of Sarawak. Overseas interest is key to the development of SCORE with approved investment now totalling about RM26.4 billion. The Samalaju Industrial Park, dedicated to heavy and energy-intensive industries, has attracted manufacturers in aluminium, polycrystalline silicon, and minerals-based industries while the Tanjung Manis Halal Hub has already received RM2 billion worth of investment from Sea Party International as it promotes aquaculture, agriculture and food security.

Finance and tourism While Sarawak remains a resourcebased economy, the state's finance sector is growing. Major commercial and merchant banks, finance companies, insurance firms and consultancies have established a strong presence in the state as Sarawakians with

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more disposable income seek ways to make their money grow. Islamic finance, which shuns interest-based transactions, is also claiming a strong share of the market, attracting Muslim and non-Muslim investors who see greater returns in the sector than from conventional banking instruments.

The air transport segment grew as passenger volumes for all principal airports state-wide rose by an average of 9.5% and the air cargo handled increased by 23.1% during the same period. The number of tourist arrivals to Sarawak has been increasing over the past few years with domestic tourism making up a major portion of visitors. Of the nearly 3.3 million tourists who visited Sarawak in 2010, peninsula Malaysia visitors accounted for 22 per cent while neighbouring Sabah provided 19 per cent of arrivals. Brunei was the biggest tourism contributor outside Malaysia with close to 1.2 million visitors while Indonesia also had significant numbers. Tourism, both domestic and international, was up 30 per cent in 2010 and, with more budget flights available from peninsula Malaysia and other Asian countries, the number of visitors is expected to increase steadily. In terms of infrastructure, the state has started a programme of improvements designed to increase road, electricity and water supply coverage to rural areas. The National Key Result Area for rural basic infrastructure will increase the length of roads to 21,250.5 km, electricity supply coverage to 95% and water supply coverage to 90% by 2012. *Data from Sarawak government website

SARAWAK ECONOMY OVERVIEW

Reforms spur rapid economic growth as Sarawak offers incentives for foreign investors Since the middle of the previous decade, Sarawak has experienced a period of sustained economic growth, riding out the global credit crisis and charting a course that it hopes will result in high-income status by 2020.

n 2010, Sarawak experienced solid economic growth despite the global credit crisis. Its Gross Domestic Product reportedly increased by 5.4 per cent and is set to hit 6.8 per cent in 2011 in line with federal government targets. Public investment rose 18.9 per cent. According to the Sarawak government, the stateâ&#x20AC;&#x2122;s economic fundamentals are strong. Growth remained steady from 2005 through 2008 at between 5.0 and 5.8 per cent before slowing in 2009, despite Sarawak receiving the largest share of Foreign Direct Investment of all 13 Malaysian states that year. The impressive growth record in recent years is credited to the comprehensive economic reform policies enacted by the government in 2006, which factored in the 2008 launch of (SCORE) Sarawak Corridor of Renewable Energy.

Income benefits In addition to its key economic development plans, the economy is set to grow further in the coming years as foreign investors eye potentially lucrative projects in heavy industries, energy, halal food and services and traditional Sarawak sectors such as timber, palm oil, natural gas and agriculture. Improvements to infrastructure, road network, upgrades to major ports, and greater penetration of internet and tech-

nological advancements means Sarawak offers a host of investment opportunities for foreign entities eager to take advantage of this bustling part of the world. And because of its vast reserves of natural resources, Sarawak offers strong potential for investment in petroleum, petrochemicals, agro, bio-technology and forestry. The government has identified priority areas for investment, which for resource-based clusters include: timber, agro & food processing, petrochemicals & gas, palm oil and ceramics. Non-resource- based clusters focus on shipbuilding while policy-driven clusters revolve around electronics and biotechnology. Malaysia and Sarawak offer foreign investors some of the most attractive incentive packages in the region, with various inducements based on the sectors involved.

Investment incentives The Sarawak government offers extra incentives, including competitive pricing and generous rebate on the price of industrial land. Companies eligible for Pioneer Status in Sarawak will be granted a tax exemption of 100% (normally 70%) of their statutory income. For companies eligible for the Investment Tax Allowance, the rate of allowance will be increased to a

maximum of 100% (normally 75%) of the statutory income. Selected industries can also receive an infrastructure allowance of 100% of qualifying expenditures.

Manufacturing Manufacturing projects in Sarawak catering to the domestic market are also entitled to full import duty exemption on any raw material, components or parts which are not available in Sarawak as well as eligibility for double deduction on freight charges incurred in the export of rattan and wood-based products (except plywood, sawn timber and veneer). High-tech industries receive Pioneer Status with a full tax exemption for statutory income for five years or an Investment Tax Allowance of 60% on qualifying capital expenditures. Strategic industries, involving heavy capital investments with long gestation periods, can receive Pioneer Status with full tax exemption of statutory income for 10 years or an Investment Tax Allowance of 100% on qualifying capital expenditure incurred within five years. There are also incentives for Research & Development companies, those involved in the wood-based, textile, machinery and engineering sectors, smallscale companies and companies dealing with storage, treatment and disposal of toxic and hazardous wastes.

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SCORE OVERVIEW

Ambitious SCORE project ready to take Sarawak economy to the next level The Sarawak Corridor of Renewable Energy (SCORE) is the state government’s flagship economic development plan to enable Sarawak to achieve high-income status by 2020 in tandem with the federal government’s target

he Sarawak Corridor of Renewable Energy, or SCORE, is a major economic development plan aimed at developing the state’s central regions and helping Sarawak achieve developed status by 2020 in tandem with federal government ambitions. Several sectors are targeted for development but the main thrust is to boost heavy and energy intensive industries, resource-based industries, halal products and ecotourism. Being one of the five regional economic corridors in Malaysia, SCORE stretches across more than 350 kilometres of land between Similajau and Tanjung Manis and into the interior of the central region of Sarawak with key industrial zones located at strategic areas along its path. The Sarawak government hopes that SCORE can encourage local and foreign companies to invest in an array of sectors and steer the state away from the oil and gas sector and agro-dominated economy and embrace technology, bioscience, and financial services, among others. “SCORE is Sarawak’s way of trying to diversify our economy further, from agrobased to heavy industries,” said Sarawak Chief Minister Pehin Sri Haji Abdul Taib Mahmud, who has been the driving force behind the state’s rising economic importance over the past 30 years. It is hoped that SCORE will help to make it easier for companies to do business in Sarawak and expand opportunities for SMEs to feed off the activities of bigger foreign and domestic players.

Tenth Malaysian Plan The programme, which adheres to the principles of the Tenth Malaysia Plan for economic development, is also designed to raise the capacity for knowledge and innovation and provide fresh job opportunities for skilled talent. A primary mission is to enrich the lives of people living in remote parts of Sarawak and accelerate growth in these areas. The two SCORE hotspots are the Samalaju Industrial Park (SIP) in Bintulu and the Tanjung Manis Halal Hub (TMHH) on the western-most part of the SCORE area. Also significant is the newly completed Bakun

Dam hydroelectric power station on the Balui River, which will generate 2,400 megawatts of electricity once fully commission and is the main source of energy for the industries in SIP and other areas. Other hydro-based power stations are also planned in Sarawak to provide power for more industries coming into SCORE area. SIP has seen frenetic activity since SCORE was launched and is proving to be a template for the programme’s success. Fed by power from the Bakun Dam, several major heavy industry players have already committed to the Park. One of the biggest names is Japan’s Tokuyama Corporation, which is building two polycrystalline silicon plants in SIP that would eventually have the capacity produce more than 20,000 tonnes a year.

"SCORE is Sarawak’s way of trying to diversify our economy further, from agro-based to heavy industries" The first plant is due for completion in September 2013 at a cost of RM3 billion and will produce 6,200 tonnes of polycrystalline silicon a year. The second plant, costing RM3.72 billion, will start construction in April, 2012 and is expected to be completed in 2015 with an annual capacity of 13,800 tonnes. Aluminium production will have a strong in SIP. A US$1.6 billion aluminium smelter, with an annual capacity of 370,000 tonnes, is being planned by a joint China-Malaysia venture. The project brings together the Aluminium Corporation of China and a Malaysian group headed by tycoon Tan Sri Syed Mokhtar Al-Bukhary and UAE business leader Mohammed Ali Rasheed Alabbar. Malaysian company Press Metal Bintulu

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is also building an aluminium smelter in SIP with a capacity of 240,000 while another joint venture featuring a global giant sees Rio Tinto Alcan joining forces with Cahya Mata Sarawak Berhad (CMSB) to build a US$1 billion plant in Samalaju with 720,000 per annum capacity. Hong Kong-based Asia Minerals Ltd has pledged to spend up to RM3 billion to build a manganese smelting plant in SIP while CMSB is planning a manganese and ferro silicon alloy plant in partnership with Australian company OM Holdings, who will have a 20 per cent stake. There has been plenty of investmentrelated activity at TMHH, a 77,000-hectare are of land ripe for development as Sarawak vies to lead the way in food and water security for the region. Upstream and downstream activities are being encouraged with a modern road system recently built connecting the hub to Sibu.

Halal products Given its halal theme, TMHH is attracting strong interest from Middle East investors, who have signed three Memorandums of Understanding (MoUs) with the hub that would attract billions of ringgit in investments. The first agreement was between Tanjung Manis Food & Industrial Park Sdn Bhd and Inside Investor to facilitate investments from the GCC into TMHH. The Malaysian company also signed with New York-based Borneo Agriculture to set up a US$500 million fund from GVC to invest in the hub. Perigon Advisory WLL also signed on to establish a RM3 billion Food & Agriculture Fund for Islamic countries. As a state rich in rainforest and natural beauty, ecotourism will play an important role in SCORE. Miri, in eastern Sarawak, is renown as the state’s resort city and the government plans to expand its attractions to encourage tourists to visit the area. More hotels and resorts are to be built while infrastructure will be improved to meet the needs of the tens of thousands of addition tourists who are expected to travel to Sarawak over the coming years.

SARAWAK CORRIDOR OF RENEWABLE ENERGY (SCORE) Samalaju will become the

Mukah

new Heavy Industry

will focus on human

Centre

capital development :

Tanjung Manis

education, training and research

will be developed into an Industrial Port City and Halal Hub.

SAMALAJU

Baram HEP (1,000MW)

Long Lellang

BARAM

Long Seridan

Bintulu

MUKAH

Mukah

Bakun HEP (2,400MW) Belaga

TG. MANIS

Belawai

Long Banga

Sibu

Murum HEP (944MW)

Pelagus HEP Kapit TUNOH

Balleh HEP (1,200MW)

Baram and Tunoh will focus on tourism and resource based industries.

LEGEND SCORE Area Airport Corridor Growth Node Hydro Electric Power (HEP) Industrial Area

SCORE

SCORE chief Wilson has high hopes for the success of Sarawak’s most ambitious development plan Datuk Amar Wilson, CEO of the agency responsible for managing SCORE, brings 37 solid years of civil service experience to the job as he spearheads Sarawak’s drive to become a developed state by 2020. Datuk Amar Wilson Baya Dandot | Chief Executive Officer | RECODA

atuk Amar Wilson leads his team into unchartered territories with his unique leadership skills, think-first approach, entrusting and instilling confidence as they venture into the most important development plan ever undertaken by the state government of Sarawak. SCORE is a major initiative undertaken to accelerate growth of Sarawak's central region and transform the region into a developed state by 2020. Datuk Amar is the CEO of the Regional Corridor Development Authority (RECODA), the agency tasked with implementing SCORE, which he said is very much open to the idea of Middle East investors. “We visualise Samalaju Industrial Park (SIP) to be very much like the Jebel Ali Free Zone in Dubai,” he said. “There are companies from Japan, France, China and many other countries, now we are starting to see a real interest from the Middle East region and since the Investment Mission to Abu Dhabi earlier this year we only expect for their interest to rise and culminate in visits to Sarawak so they can see what we have to offer. “Investors from the Middle East have a plethora of opportunities awaiting them and they will find us to be proactive and responsive to their needs.” SIP is one of the core nodes of SCORE (Sarawak Corridor of Renewable Energy) and is dedicated to heavy industries. The SCORE region has planned projects valued at more than $26 billion with 13 further industries to be set up worth $10.54 billion. The Corridor is one of five in Malaysia and has progressed at a breathtaking pace under the helm of Datuk Amar Wilson, given the fact that it was only established in 2008 and is in its early development stage.

Teamwork With Japan’s Tokuyama, local company Press Metal, Asia Minerals Ltd, Rio Tinto Alcan, among others buying into SIP proves that SCORE is a viable investment arena. “The companies that are already in the SCORE core area, like Tokuyama and

Press Metal, are examples of their testimony of trust,” he said. We need to brand the SCORE name. It is attractive and we need investors to come to believe that this is the place to invest.” Datuk Amar Wilson credits his hard working team and the state government for the successes achieved so far, saying: “Sarawak has a reliable, transparent, efficient and effective civil service. The frontline institutions, particularly RECODA, consist of knowledgeable staff who adopt a hands-on approach to provide the highest level of service to the corridor’s investors.

"Investors from the Middle East have a plethora of opportunities awaiting them and they will find us to be proactive and responsive to their needs." “Nothing is more satisfying and rewarding than seeing our concerted efforts result in the transformation of the corridor, from concept to fruition.” It is expected that Mukah will act as the headquarters of SCORE with the recent completion of the RECODA building in the town. He said the development currently taking place would effectively transform Mukah into the administrative and operational capital of SCORE. “Mukah is a natural choice for the headquarters as it is located at the heart of the corridor and will be developed as a smart city concentrating on three key areas,” he said. Human capital development will play an integral role and will be an important aspect of the success of the Corridor in the long term. Research and development will

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be crucial in sustaining the growth of the Corridor and the state economy’s growth and, finally, an administrative centre, ensuring the vast region around it is properly serviced and taken care of.”

Experience In 1972, Datuk Amar Wilson graduated from the University of Western Australia with a Bachelor's Degree in Economics and went on to earn an Economic Development Master’s Degree from University of Sussex, UK. Datuk Amar entered the civil service as an assistant director under the State Planning Unit (SPU) in 1973. He also became the SPU’s chief assistant secretary, heading Macro Economy and Agriculture because of his vast experience in economics development. In 1995, he was made SPU director before serving as Deputy State Secretary from August 2000 to October 31 2006. On 1 January 2007, he was appointed State Secretary, his final government post until his retirement from the civil service on 2 August 2009. He was appointed CEO of RECODA after gathering a wealth of experience and accomplishments during his 37 years with the civil service. It was no surprise when Datuk Amar Wilson won the 2010 State Civil Service Personality Award, after which he thanked the state leadership for the confidence they have in him. Datuk Amar Wilson, who is of the Bidayuh tribe, has a clear passion for serving his homeland and has tirelessly worked to give back to the community, hence it was only natural he took up the post as CEO of SCORE as he feels the spin-offs from the large scale investments will serve to benefit the people of Sarawak. “Our aim is to optimise the utilisation of natural resources through greater private sector participation, especially from foreign investors,” he said. “The orderly and speedy utilisation of these resources will bring significant economic growth and development to the Central Region and to Sarawak as a whole.”

SCORE

Sarawak State Planning Unit leads the way towards 2020 economic ambitions The State Planning Unit of Sarawak is the Sarawak State government Central Agency charged with mapping out the state’s future direction in terms of socio-economic growth. It has a number of objectives and functions and is the key agency behind the SCORE development plan.

he Sarawak State Planning Unit (SPU) is the state government’s official agency tasked with taking the lead in planning for the sustainable development of Sarawak as it strives to become a developed state by 2020. Emboldened by a vision to be a model state development planning agency with a culture of excellence, integrity and professionalism, the SPU has successfully led the way in mapping Sarawak’s future through shortterm, medium-term and long-term development plans. By far its most ambitious project, steered by the Chief Minister, is SCORE (Sarawak Corridor of Renewable Energy), which is aimed at diversifying the state’s economy and helping the people of Sarawak achieve higher incomes. At the helm of SPU is its Director, Datu Haji Ismawi bin Haji Ismuni, an experienced government stalwart who has been with the administration since 1983 and joined SPU in 2006.

Long history The SPU was first established in 1972 out of the remnants of the Economy Planning Section of the State Financial Office. Coming under the State Ministry of Finance in 1977, the SPU was merged with the State Development Office in 1983 to form the Department of Development. In August 2004, the SPU was put directly under the State Secretary before coming under the supervision of the Deputy State Secretary (Planning and Development) in July 2006. The objectives of the SPU are manifold with an over-riding theme of planning for a future in which Sarawak and its people can benefit socially and economically from an array of development programmes. A key condition is that growth is spread equitably across all regions and cultures of Sarawak. The SPU is also responsible for planning for the state transformation from a

resource-based economy to a k-economy (knowledge) and to ensure that development agenda of the Ministries and agencies are in line with the State’s development plan. It is also entrusted to plan for the development of human capital, in tandem with its k-economy ambitions, while also ensuring that socio-economic development complements the policies and practices of sustainable resource and environmental management. A key role is to enhance social harmony and cohesion within a diverse socio-cultural environment involving more

"The objectives of the SPU are manifold with an over-riding theme of planning for a future in which Sarawak and its people can benefit socially and economically from an array of development programmes" than 30 ethnic and sub-ethnic cultures. The SPU, in addition, promotes the increasing use of ICT products and services towards the development of a state e-economy and activates structured and coordinated research and development programmes in order to create value added products that strengthens the state’s GDP. Regional co-operation with groups such as BIMP-EAGA (Brunei, Indonesia, Malaysia and the Philippines) and

SOSEK-MALINDO (Malaysia-Indonesia border) is also encouraged. This also includes the latest bilateral economic cooperation between Sarawak and Brunei.

Multiple functions The SPU has a number of other functions, such as: • Formulating the state’s socio-economic development policies and priorities at the macro, sectoral and regional level, especially involving the State Five-Year Development Plan in line with the national development agenda. • Advising the state government on macro, sectoral and regional socioeconomic issues especially in the area of economic growth and distribution. • Developing, managing, analysing and disseminating information from the state macro, sectoral and regional database that is relevant to socio-economic and resource development and management. • Initiating, managing and coordinating the master plan and feasibility studies, and assessing socio-economic initiatives and reporting its findings and proposals to the state government. • Coordinating all socio-economic Research and sourcing and managing Foreign Technical Assistance. • Serving as secretariat to various planning councils and committees at the state level. The SPU is organised into a number of sectors, namely: Macroeconomic; & Distribution; Urban & Regional Development; Manpower & Social Development; Infrastructure, Utility & Communication Development; Industry, Tourism & Commerce; Agriculture & Rural Development; Digital Spatial & Information Management; Environment & Natural Resources; Market Research; and Administration & Finance. INSIDE SARAWAK 2011 21

SCORE

SCORE offers made-to-measure investment solutions for Middle East companies The Sarawak State Planning Unit is responsible for planning socio-economic development programmes that are of benefit to the state. Its flagship long-term plan, SCORE (Sarawak Corridor of Renewable Energy), is already starting to bear fruit. Datu Haji Ismawi bin Haji Ismuni | Director | Sarawak State Planning Unit

he investment opportunities offered by the Sarawak Corridor of Renewable Energy (SCORE) project is tailor-made for Middle East investors to synergise the financial capital that these investors have and the abundant natural resources available in SCORE. Datu Haji Ismawi bin Haji Ismuni, Director of the Sarawak State Planning Unit (SPU), said SCORE has paved the way for the state to groom and train a sizeable and skilled workforce who can meet the talent requirements of investors wanting to set up shop in Sarawak. He said the State Government is undertaking a manpower planning process to ensure local talents are qualified to take up a variety of roles among the thousands of jobs expected to be created from SCORE projects. “We have completed a manpower study for Score and is also currently engaging consultants to help us prepare the manpower action plan,” said Datu Haji Ismawi. “In so doing, we have been engaging talking with industries to better understand their needs. “We now know their requirements are and the kind of people they are looking for. And we have also been talking to universities, technical colleges and polytechnics. This is a continuous programme in order to meet the requirements of the industries here.” Datu Ismawi explains that the State Government is also liberal in its policy on manpower recruitment whereby companies are also allowed to bring in their own expatriates and foreign workers if they are not able to source the manpower locally especially during the initial stage of their operation. However, Datu Haji Ismawi expects most of SCORE jobs to be ultimately filled by Malaysians.

Long-term goals As the State Central agency responsible for socio-economic planning, SCORE comes under the SPU’s long-term plan. Launched on the 11th February,2008, SCORE is Sarawak’s blueprint development plan to transform the state into a high-

income economy by 2020. And in the three years since its launch, Datu Haji Ismawi said the rapid progress made by SCORE and the overwhelming response from the investors have already marked out the project as a significant achievement for the State.

"SPU is undertaking a manpower planning process to ensure local talent are qualified to take up a variety of roles among the thousands of jobs expected to be created from SCORE projects" Thus far, more than RM26 billion worth of investments have been approved for SCORE, the majority in key growth nodes such as the Samalaju Industrial Park for heavy and energy intensive industries and Tanjung Manis Halal Hub, which focuses on halal products. Leading companies and investors from Japan, China, Taiwan, Australia, Hong Kong, India and Middle East have put their faith in SCORE and Sarawak is hoping for more investments from GCC countries. Datu Haji Ismawi outlined six objectives of SCORE; Create new sources of wealth, to move the State economy up the value chain, achieve higher per capita income, enhance quality of life, achieve balanced development between regions in the State and to eradicate poverty. “That’s the long-term plan,” he said. “We have also formulated our medium-term, five-

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year development plan from 2011 to 2015. This is important because it sets out the macro-economic direction and growth, so if Malaysia, as a country, wants to achieve six per cent GDP growth per annum, likewise the state needs to growth at the same pace. “So, the medium-term plan is crucial in supporting the long-term plan, which is SCORE.”

Halal opportunities Datu Haji Ismawi said SCORE offers a wealth of opportunities for Middle Eastern investors, particularly when it comes to the development of halal industries. The Tanjung Manis Halal Hub, located near the westernmost part of the SCORE area, is primed to become one of the biggest halal centres in the world and lead the way in agro and food processing using biotechnological process. “What is unique about the Tanjung Manis Halal Hub is that investors can start moving into the upstream sector first, develop and process the raw materials, set up their lab and eventually integrate these activities with the downstream sector,” he said. “Tanjung Manis has plenty of advantages. It has a clean environment, plenty of water, a lot of land and with good accessibility. We encourage Middle East investors to come and have a look for themselves.” Datu Haji Ismawi also urged investors to take into account the fact that Sarawak offers competitive business environment, especially when it comes to SCORE industries. “In SCORE, we will capitalise on energyintensive industries,” he said. “So, with the abundance of energy, of course the costs are much lower because they will be able to leverage on the hydros,” he said, referring to the Bakun and Murum Dams and other future hydro-electric stations that will power SCORE. “Secondly, in terms of manpower, eventually we will be able to develop our own human capital. We have a good quality of life and the cost of living in Sarawak is not that high. Put this all together and you have many plus factors for industries to invest in Sarawak.”

SCORE

Samalaju Industrial Park and Tanjung Manis Halal Hub set standards for SCORE The Samalaju Industrial Park and Tanjung Manis Halal Hub are the two central zones in the SCORE initiative. The two regions are leading the way in terms of on-going projects and are expected to fuel further investments in Sarawak’s overall economic development plan.

f all the activities and developments taking place within the Sarawak Corridor of Renewable Energy (SCORE), two bustling areas have emerged as cornerstones of the entire project. The Samalaju Industrial Park (SIP) in Bintulu and the Tanjung Manis Halal Hub in the western-most part of the Corridor are expected to enjoy the highest density of investment from foreign and domestic interests. Since the launch of SCORE in 2008, both zones have pushed ahead with their respective development agendas, bolstered by investments and pledges from some of the biggest players in their sectors. The two regions cater to vastly different businesses. SIP is dedicated to heavy and energy intensive industries while TMHH focus on food security, agriculture and halal products. However, both are working in unison to help Sarawak achieve its goal of becoming a developed state by 2020. SIP is a 7,000-hectare area on the coast of Bintulu dedicated to energyintensive heavy industry and under the jurisdiction of the Bintulu Development Authority. The Park will house companies engaged in aluminium smelters, steel, oil refineries, silica-based industries, marine engineering and other industrial and commercial activities. A dedicated port will be developed inside the SIP to transport raw materials and produce. In addition, Bintulu Port, which is being upgraded to meet the expected demands of industries in the area, will provide another sea route in and out of the Park with massive cargo capability. The production of aluminium, for which global demand is expected to rise four per cent, will have a strong presence at SIP with three separate projects eventually producing about 1.3 million tonnes a year. The biggest one is a US$1 billion plant in a joint venture between

Cahya Mata Sarawak Berhad and Rio Tinto Alcan, producing 720,000 tonnes. The Aluminium Corporation of China and a Malaysian group led by tycoon Tan Sri Syed Mokhtar AlBukhary and UAE business leader Mohammed Ali Rasheed Alabbar are building a US$1.6 billion smelter with production capacity of 370,000 while local company Press Metal Bintulu have received financing and have starting building a 240,000 capacity plant.

"The two regions cater to vastly different businesses. SIP is dedicated to heavy industries while TMHH focus on food security, agriculture and halal products. However, both are working in unison to help Sarawak achieve its goal of becoming a developed state by 2020" Two manganese smelters will also be established in Samalaju. Hong Kong’s Asia Minerals Ltd is keen to build a RM3 billion factory while Cahya Mata Sarawak is teaming up with Australia’s OM Holdings for a manganese and ferro silicon allow plant.

Japan’s Tokuyama Corporation is spending more than RM6 billion for two polycrystalline silicon factories with an eventual annual capacity of 20,000 tonnes. TMHH will cover close to 80,000 hectares of fertile agricultural land. It is hoped that the Hub will develop to be one of the most scientifically and environmentally advanced halal centres in the world via the use of advanced technologies, renewable energy and sustainable practices. The first international company to invest in TMHH was Taiwan-based Sea Party International. Together with its subsidiaries, SPI has pledged RM$2 billion in phases. The first phase involved spending RM318 million for aquaculture activities such as tilapia breeding, chlorella cultivation and production of Halal collagen and gelatine. The second phase moves into the production of gelatine from tilapia scales, bones and skin, organic prawn farming and vendor development programmes. The group has already started construction of its RM30 million research centre in Tanjung Manis. Bahrain-based BioMe has also visited the site with a view to invest in sustainable and profitable biotech industries in TMHH. During the Invest Malaysia Forum 2011 in Abu Dhabi in January, TMHH owners, Tanjung Manis Food & Industrial Park Sdb Bhd signed three MoUs that that could rake in millions of dollars worth of investments from the Middle East. The first agreement was between Tanjung Manis Food & Industrial Park Sdn Bhd and Inside Investor to facilitate investments from the GCC into TMHH. The Malaysian company also signed with New York-based Borneo Agriculture to set up a US$500 million fund from GVC to invest in the hub. Perigon Advisory WLL also signed on to establish a RM3 billion Food & Agriculture Fund for Islamic countries. INSIDE SARAWAK 2011 23

SCORE

Tanjung Manis Halal Hub on course to become world’s leading halal SEZ With 77,000 hectares of fertile agricultural land at its disposal, the Tanjung Manis Halal Hub is set to become one of the world’s most important centres for tackling issues of food security and sustainable food production. YB Datuk Hajah Norah Tun Abdul Rahman | Executive Chairman | Tanjung Manis Halal Hub

he Tanjung Manis Halal Hub (TMHH) in Sarawak is one a core part of the Sarawak Corridor of Renewable Energy (SCORE) initiative, established with the aim of promoting halal products and services and addressing regional food security issues. The Hub is spread across 77,000 hectares of land located on the western-most area of the SCORE landscape, which stretches 350 kilometres east. TMHH is aiming to be the top halal hub in the world, promoting aquaculture, agriculture, food processing, biotechnology, horticulture as well as Islamic financial services. Access to the zone has been made easier with improvements to road networks and the construction of world-class port facilities and a nearby airport. TMHH Executive Chairman YB Datuk Hajah Norah Tun Abdul Rahman said the Sarawak facility is poised to become one of the key nodes of SCORE. “Tanjung Manis Halal Hub is positioned to be the Food & Agriculture Special Economic Zone (SEZ) of SCORE,” she said. “The Halal Hub will assist the Sarawak economy by producing raw materials for food products such as fish, prawn, corn and maize for the local and international market. “This will help to reduce import bills. The Halal Hub is intended to address the food security issue affecting the world right now, which is witnessing a food shortage due to natural disasters and the shifting from agriculture to other developments, such as those seen in Thailand and Vietnam.” While many halal centres exist around the world, Datuk Norah TMHH will have unique qualities that benefit not only upstream industries but also downstream activities.

Green development “It will practice green development in every aspect of development, which is quite different from other halal hub and food production centres. We are at the

stage of developing a comprehensive Master Plan to this effect, and scheduled to be completed by year end,” said Datuk Norah. The first international company to invest in TMHH was Taiwan-based Sea Party International (SPI). Together with its subsidiaries, SPI pledged RM$2 billion in phases. The first phase involved spending RM318 million for aquaculture activities such as tilapia breeding, chlorella cultivation and production of Halal collagen and gelatine. The second phase moves into the production of gelatine from tilapia scales, bones and skin, organic prawn farming and vendor development programmes.

"The Halal Hub is intended to address the food security issue affecting the world right now." She adds that “Arab nations are the largest net importers of food and cereal in the world due to land scarcity issues and the dwindling availability of arable land that’s suitable for agriculture worldwide. Being an advanced Halal Hub, Tanjung Manis has the advantage of downstream and upstream value chains, where the availability of raw materials for food production via agriculture and aquaculture is our key advantage. Others are merely focusing on mid value chain activities such as food processing when we have the end to end solutions in an integrated development. Datuk Norah said she expected more investment from the Gulf Cooperation Council (GCC) countries. “We have received many enquiries such as integrated prawn farming, stevia plantation and corn plantation,”

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she said. “ Since the road show in Abu Dhabi, we have received many general enquiries from the Middle East on agricultural projects as well. “We are always trying to promote and attract more investors who are concerned with food security to come and visit TMHH. We also have plans to have road shows to Japan, China, Europe and Middle East next year.” Apart from attracting foreign investors and addressing food security issues, TMHH is also expected to create jobs for Sarawakians. “In terms of providing job opportunities to many agriculture graduates in Malaysia, TMHH will offer more jobs relating to their qualification,” she said. “Malaysians will benefit via technology transfer such as from Taiwan, on the latest aquaculture technology, by working in TMHH. Also by being a Special Economic Zone (SEZ) as proposed, there will be many financial and tax incentives planned for people working there. “Overall, TMHH will also eradicate poverty, improve rural development and resolve the food security issues for the nation.”

Overall benefit As an integral part of SCORE, the activities of TMHH is aimed at helping Sarawak achieve high-income status by 2020 in tandem with federal government ambitions. The Sarawak government has invested up to RM1.3 billion in Tanjung Manis to modernise infrastructure and public network. To support TMHH objectives, the Universiti Teknologi Mara Sarawak is introducing fresh programmes in herbal and halal food production leading to diplomas and degrees, including aquaculture and microbiology. The courses are aimed at fulfilling TMHH’s demand for skilled manpower as more investors and industries move into the hub.

SCORE

10 key industries to fuel SCORE investments The Sarawak government is targeting RM200 billion worth of investments for its SCORE project from overseas and domestic players, identifying 10 main industries that can offer rich returns for serious investors.

CORE (Sarawak Corridor of Renewable Energy) is the Sarawak government’s flagship economic development programme to lift the state’s economy out of its agro-based comfort zone and embrace diverse industries in the quest to achieve high-income status by 2020. Sarawak’s Chief Minister, Pehin Sri Haji Abdul Taib Mahmud is targeting RM200 billion worth of investments from the private sector over the next 20 years. As of September 2011, SCORE had secured 14 projects with a total approved investment of RM28.55 million, well within projections. SCORE has galvanised the investment spirit of major companies in Sarawak and Malaysia while alerting overseas players about the business opportunities available in the country’s largest state. SCORE’s key zones are Samalaju Industrial Park, which is dedicated to heavy and energy-intensive industries, and Tanjung Manis Halal Hub, a vast expanse of land geared towards addressing the global food security crisis, agriculture and other halal-oriented services. The backbone of SCORE is the power being produced to drive the energyintensive industries, especially the big manufacturers who have set up plants in Samalaju. The Bakun Dam, one of the largest in Asia, will generate 2800MW of power once fully complete while other hydro-powered stations are being planned across the SCORE landscape. Upgraded ports, expanded road networks and a new cross-SCORE rail link will improve logistics and accessibility. The Sarawak government has identified 10 main industries that are ripe for investment from overseas interests, including potential Middle East investors. These are: aluminium, glass, oilbased industries, steel, tourism, marine engineering, timber-based industries, livestock, fishing and aquaculture, and palm oil. Aluminium is proving to be a popular

product with global demand expected to rise four per cent. Five companies representing three major aluminium investments have already made their way to Samalaju, including solo project by local company Press Metal Bintulu, who are joined by ventures involving Cahya Mata Sarawak Bhd (CMSB) and Rio Tinto Alcan, and the Aluminium Corporation of China with a Malaysian consortium. The investments in aluminium are valued at RM16.5 billion and are expected to create jobs for 5,600 people. According to SCORE data, there are two projects for polycrystalline silicon worth a total of RM8.77 billion with potential employment for more than 1,000. Five projects worth RM1.18 billion are underway for the production of silicone, manganese, ferro s ili c o n e a n d other ferro alloys, creating more than 2000 jobs. In terms of halal, agrobased and biotechnology industries, TMHH has so far attracted two projects worth RM2.1 billion, including a major investment from Taiwan’s Sea Party International for aquaculture. More than 1,300 jobs will result from these investments.

Tourism is one of the high-profile industries the government is promoting in terms of investment opportunities. More hotels and resorts are sprouting across the state as Sarawak tries to leverage on its pristine rainforest , natural beauty and exotic wildlife to encourage eco-tourism. Of the RM28.55 billion so far pledged, 18.5 per cent (five projects) are domestic investments, 47.53 per cent (3) represents joint ventures between local and foreign companies while 33.97 (6) per cent are exclusively foreign. All projects are expected to generate more than 10,100 jobs.

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SCORE

Press Metal keen to forge long-term partnerships based on trust & integrity Forged and shaped in Malaysia, Press Metal has blazed a trail for home-bred companies by investing in Sarawak’s key industrial zone. Its founder talks about the values that have made the company successful. Dato' Paul P. K. Koon | Chief Executive Officer | Press Metal Berhad

n 25 years, Press Metal has grown from a small family business into one of the region’s biggest suppliers of aluminium. Growing in tandem with the company is the integrity and trust borne out of the family values that made the company successful in the first place. And that is the message Press Metal would like to send to potential investors from the Middle East. Dato' Paul P. K. Koon, CEO and founder of Press Metal, said the company’s business ideals are based on trust and longterm partnerships - traits that would take the industry in Malaysia forward. “Maintaining integrity is key for us and it has helped us so far,” Dato' Paul said. “We believe business is long term. When people look at Press Metal, they see a company they can trust so that there is a basis for further discussion, whether it is about business or investment. We don’t just come and go. Whatever we promise, we deliver. We don’t over-promise but we deliver whatever we have commited.”

Increased production Press Metal, which now has a presence in the United States, Europe and East Asia, is one of two companies in Southeast Asia to operate an aluminium smelter. They own a 120,000 tonne annual capacity plant in Mukah, Sarawak and are building a new facility in the Samalaju Industrial Park in Sarawak’s fast-developing Bintulu district that will add another 240,000 tonnes once completed in 2013. The company owns another smelter in China that produces 90,000 tonnes of aluminium a year. Although headquartered in peninsular Malaysia, Press Metal is an integral part of major infrastructural and economic developments taking place in Sarawak, Malaysia’s largest state. As a public listed company, Press Metal is open to investment either through the equity market or through

formal partnerships. Japanese conglomerate Sumitomo Corp has a 20 per cent interest in Press Metal’s Sarawak operations after a deal in 2010 for its investment in the aluminium business. Malaysia is currently a net importer of aluminium. But as the country gradually catches up to developed nations in terms of consumption, Press Metal expects its higher production capacity would enable the company to fulfil all domestic demand for the metal without the need to import.

"There are a lot of spin-off opportunities. There are plenty of resources that other countries would like to make use of" Sumitomo invested in Press Metal's Sarawak operations on the prospect of eventual Malaysian self-sufficiency in aluminium, and Dato' Paul says potential investors from the Middle East are welcome. “We are always open to explore further partnership opportunities,” said Dato' Paul. “With big investors, we can grow the business and handle bigger projects.” He also had some words of advice for Middle Eastern interests looking to move into Sarawak – spend time and make an effort to understand the local culture. “Adapting to the Malaysian culture will take a bit of time,” said Dato' Paul. “This is important because we want a long-term partnership. There has to be trust.” However, Dato' Paul said that once a relationship has been established the business benefits of the partner-

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ship will manifest for both parties because of the potential for expansion throughout Southeast Asia. “Malaysia can be a stepping stone for Indonesia, Vietnam and other places where there are a lot of mining opportunities,” said Dato' Paul. "Many people are unfamiliar with doing business in these countries. But we speak the same language (in Indonesia) and share similar business cultures so we have the advantage. There are a lot of spin-off opportunities. There are plenty of resources that other countries would like to invest in.”

Regional knowledge Dato' Paul said that Press Metal has encountered overseas companies wanting to do business in places such as Indonesia but they are unsure of the business environment. “We have the experience in these places so they seek us out and are willing to come together with us to explore the opportunities,” he said. Press Metal started as a downstream aluminium player but since they started production in the last decade, the company has focused on upstream activities. However, Dato' Paul said the company is eager to expand into more downstream businesses to support its production capabilities. “The aluminium industry will be very important as Malaysia become a developed nation.” Now that we have these upstream facilities we also want to start downstream operations in Sarawak, with the opportunity to create many jobs from our investment alone because it is labour intensive. “Now we have the opportunity, with investment, to build the industry for the state. I believe it is very timely. Whoever is going to be investing they will be in a good position because industry in Sarawak is really coming up. What the government is doing is absolutely correct.”

SCORE

Japan giant Tokuyama has full confidence in Sarawak venture Japan’s Tokuyama Corporation is one of the major global players to set up a plant in Sarawak’s Samalaju Industrial Park in Bintulu. The energy provided by the Bakun Dam is a key factor in Tokuyama’s decision to choose Sarawak. Akira Sanuki | President / Managing Director | Tokuyama Malaysia

APAN’S chemicals and cement giant Tokuyama Corporation is putting its faith in Sarawak’s investment-friendly policies and improving infrastructure to help it become a world leader in supplying polycrystalline silicon for the production of solar cells, particularly in the Middle East. Mr Akira Sanuki, Director-President of Tokuyama Malaysia Sdb Bhd, the Malaysian subsidiary of Tokuyama Corporation, said he was confident the company’s two plants in Sarawak’s Samalaju Industrial Park would help it capture a large share of the polycrystalline silicon market. Tokuyama is building two plants in SIP, which is part of the Sarawak Corridor of Renewable Energy (Score) project to boost the economy of Malaysia’s largest state, with eventual capacity to produce more than 20,000 tonnes of polycrystalline silicon a year. “We have the potential to become number one in this industry,” said Mr Sanuki. “We have the know-how and the experience.” “Not only can we be number one amongst our competitors but we can provide a higher quality of product than anyone else.” “In addition, we can offer excellent customer service and competitive prices. We have high hopes for our Sarawak plants and we are happy to be in Malaysia.”

Middle East Capacity The Middle East is seen as a potentially lucrative market for solar energy as oil reserves gradually dwindle. The United Arab Emirates and Saudi Arabia are already considering attractive tariff policies to promote solar energy in their countries, even though it will be some years yet before Gulf nations can start to wean themselves off oil. Mr Sanuki said once Tokuyama Malaysia starts to reach their production capacity of 20,000-plus tonnes in 2015, the company could produce

enough polycrystalline silicon to meet global market needs, including that of the Middle East. “Right now, our capacity is not enough,” he said. “But our second polycrystalline silicon plant in Malaysia will be completed by 2015 and by that time, we will be able to be competitive.”

"Our industry requires a lot of power and because the Bakun Dam would serve our needs, it was influential in our decision to come to Sarawak" The first plant is due for completion in September 2013 at a cost of RM3 billion and will produce 6,200 tonnes of polycrystalline silicon a year. Construction of the second plant, costing RM3.72 billion, will start in April, 2012 and is expected to be completed in 2015 with an annual capacity of 13,800 tonnes. Tokuyama currently enjoys a 5-10 per cent world market share in polycrystalline silicon for solar cells and is hoping its Malaysian production will help to raise its standing against tough competition from South Korea and China. The company also has a 20 per cent market share in polycrystalline silicon for semi-conductors.

Tokuyama Malaysia is expected to employ up to 500 staff from Sarawak to work on its plants as well as acquire property and take part in infrastructural projects related to its core business. Mr Sanuki said Tokuyama Corporation had previously wanted to build a factory in Kerala, India. However, the company was swayed by Sarawak’s preferential tax laws and supporting infrastructure, especially the Bakun Dam 180 away from SIP, which will supply Tokuyama with 140 megawatts of power to serve their production needs. “We looked around the region and almost decided on Kerala,” said Mr Sanuki. “But we knew about the Bakun Dam and at the end of 2010, I came to Sarawak to have a look for myself after my director in Japan asked me to study the situation. “Our industry requires a lot of power and because the Bakun Dam would serve our needs, it was influential in our decision to come to Sarawak.”

Social Responsibility Apart from investing a lot of money into the Sarawak economy, Tokuyama will also bring plenty of industrial expertise and know-how to the region. Mr Sanuki said the company hopes to launch a long-term education programme to enhance local talent in their specific industry, which may include internships in Japan. “They can go to Japan and gain basic skills and expertise and then come back to Sarawak and we can work together,” said Mr Sanuki. Clearly, Tokuyama Malaysia is ready to plant deep roots in Sarawak with the dual purpose of boosting its own business objectives and contributing to the region’s economic growth. Tokuyama Malaysia is one of the key companies who have placed their trust in Sarawak and is confident of benefiting in terms of profit margin and good will over the long run. INSIDE SARAWAK 2011 27

SCORE

Sarawak has everything investors need, says commerce chairman Middle East investors need not look farther than Sarawak for their investment requirements, with Malaysia’s largest state offering plenty of natural resources, an ideal location and political stability. Datuk Abang Haji Abdul Karim | Chairman | Sarawak Chamber of Commerce

esources, location and political stability – these are the key reasons Middle East investors should consider putting their money in Malaysia’s largest state, Sarawak. Datuk Abang Haji Abdul Karim Tun Abang Haji Openg, Chairman of the Sarawak Chamber of Commerce and Industries (SCCI), said Sarawak offers plenty of opportunities for potential investors from the GCC and others, looking for safe havens for their money. “First of all, we are rich in resources,” said Datuk Abang. “And if you talk to house developers, they talk about location, location, location. For us, talking about development, it is also location, location, location. We are between two emerging giants – India and China. “Another thing is political stability. This is something that is very important. It is something that is not guaranteed in the Middle East these days so they should come here and invest.” The SCCI, like its counterparts all over the world at the provincial and national levels, acts as a midde-man for businesses in Sarawak. The Chamber promotes commerce and industry opportunities for its members and also offers an information duct to the state government. It also has close links with the national organisation, the Malaysian International Chamber of Commerce and Industries (MICCI), and has the important role of looking after some of the smaller businesses that may want a share of the benefits driven by heavy industry developments in the state.

Full of energy Expanding on Sarawak’s resources, Datuk Abang said the state, apart from sweeping rainforests and big mineral deposits, will have a vast amount of energy once the new Bakun Dam in Bintulu is at full capacity. The dam is part of the Sarawak Corridor of Renewable Energy (SCORE)

project that has attracted billions of dollars in investments so far. “The focus is now on SCORE and, because of this programme, we will be able to produce 30,000 megawatts of energy,” said Datuk Abang. “Other forms of energy are depleting but the energy we are producing is sustainable.

"By having [big companies] operating in SCORE, they can give a lot of business to the local SMEs, who can provide them with whatever services they require" “This kind of energy is excellent for production. You cannot run away from it. The Middle East has oil and gas but not much else. There are a lot of opportunities for them in Sarawak.” The SCORE project has seen big players from Japan, Hong Kong, Australia, the Middle East and Europe invest in various businesses, from heavy industries in Bintulu’s Samalaju Industrial Park to food production at the Tanjung Manis Halal Hub. While the big companies are well looked after, the SCCI is determined to ensure small businesses also benefit. The body performs the role of a “marriage broker”, playing go-between in matching investors with local partners. “Some people think that SCORE is meant only for the big players, which is not really the case,” said Datuk Abang. “Of course, when you talk about the

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trigger industries such as smelting plants and those projects, they involve the mega players. “But by having them operating in SCORE, they can give a lot of business to the smaller local companies, who can provide them with whatever services they require. “So that’s where we come in. We have a website, as an information bank, so these investors can go there and try to find what they want. They can get in touch with these people directly. We are only the introducer. It is up to them whether the partnership lasts or not.” As SCCI Chairman, Datuk Abang has the pedigree, qualifications and experience to head one of the most important commerce organisations in the state. His father, the late Tun Abang Haji Openg, was the first governor of Sarawak after the state joined the Malaysian Federation in 1963.

Corporate stalwart A prominent corporate personality in Sarawak, Datuk Abang graduated from the University of Malaya with an Bachelor of Economics (Hons) in the late 60s and then pursued a Master’s Degree in Management from the Asian Institute of Management in the Philippines. He was one of the pioneer scholars of the Central Bank, which he joined as an assistant economist in Kuala Lumpur in the early 70s. He then became the first local to manage the Central Bank’s branch in Kuching and, because of his love for the city, resigned when his employers were about to transfer him back to Kuala Lumpur. Practically retired now, Datuk Abang holds various positions in business organisations and companies in addition to his duties as SCCI Chairman. “I enjoy what I’m doing,” he said. “At least I can contribute back to society what I gained out of it. No so much for the money but as a way of providing a service to the community.”

POWER OVERVIEW

Sarawak taps into vast power potential to fuel socio-economic growth Only 20 years ago, a small percentage of Sarawak’s population had access to electricity. Now, with the state on the verge of an economic surge, Sarawak’s massive potential for power generation could not only satisfy the demands of its people but also reach beyond its borders.

arawak, with a land area of more than 124,000 square kilometres, has the potential to generate vast amounts of power for an array of industries, commercial properties and residential households. Oil, natural gas, coal and hydro-electric power are the major natural power sources for the state, which needs to serve a population of more than 2.5 million in addition to an increasing number of heavy industries that are setting up factories as part of the Sarawak Corridor of Renewable Energy (SCORE) initiative. More recently, the government has been promoting the use of biofuels as a viable and sustainable energy source. There are various organisations and government-linked companies responsible for the delivery of power to the state’s various sectors. The Ministry of Public Utilities Sarawak is the state government body responsible for regulating the power industry in the region and its policy. However, the actual physical supply of power is performed by private-public companies tasked with delivering electricity to the different sectors of society.

remote areas. The major towns are connected via a 275/132kV state transmission grid. With the advent of SCORE, Sarawak’s energy landscape has changed dramatically, with more emphasis placed on catering to the power-intensive industries sprouting at the Samalaju Industrial Park. As SCORE’s monument to heavy industries, Samalaju houses manufacturers that need massive amounts of energy, almost all of it provided by hydro-electric power. The first phase of the massive RM7billion Bakun Dam project in Kapit has already been completed. When the Dam is fully functional, it is expected to generate 2,400MW of power, providing cheap and plentiful energy for the Samalaju manufacturers.

Consumer power

"Sarawak has planned for at least 12 hydro-electricity dam projects under SCORE"

Privatised Syarikat SESCO Berhad (formerly Sarawak Electricity Supply Corporation, SESCO) has the task of generating, transmitting and distributing electricity for individual consumers in Sarawak, delivering power to almost 400,000 customers in the state. Its customer base is growing at an average of 8 per cent per annum as Sarawak attempts to meet its goal of 95 per cent consumer power penetration by 2012. SESCO is a wholly-owned subsidiary of Sarawak Energy Berhad (SEB), the state’s leading power company with strong links to the government. The organisation has 36 power stations with a total capacity of 1,315MW fuelled mainly by coal-fired thermal plants, gas turbines, combined cycle stations, hydro turbines and a small percentage of diesel turbines, which are located mostly in

There is also the RM600-million Batang Ai Dam in Sri Aman while construction is on-going on the RM3-billion Murum Dam in Belaga. Sarawak has planned at least 12 hydro-electricity dam projects under SCORE in order to serve the needs of heavy industries, tourism and consumers. Five of these dams are planned for Pelagus, Balleh, Baram, Limbang and Lawas. The hydro projects are expected to generate at least 7,000MW of energy in total. However, by making use of Sarawak’s diversity in energy resources, there is potential for several more thousands of MW that can be harnessed for domestic needs as well as exported. SEB, which is increasingly becoming the most influential power entity in Sarawak, has bought up all of Bakun’s power and has a target of exporting up

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to 10,000MW of hydropower to peninsula Malaysia by 2030 via 500kV High Voltage Direct Current undersea cables. In its “Master Plan for Power System Development in Sarawak”, SEB has identified 20,000MW of hydro potential in 52 sites throughout the state. Coal is another energy resource available in bulk in Sarawak with the government planning to include 1.156 billion tonnes of coal reserves in its power-generating plan. SEB, through its subsidiaries, operates several coal-fired power plants. Sejingkat Power Corporation Sdn Bhd operates a total capacity of 210MW via a coal-fired steam-turbine power plant at Kampung Geobilt, Kuching. And through its wholly-owned subsidiary Mukah Power Generation Sdn Bhd (MPG), SEB has developed a coal-fired power station in Matadeng, Mukah with a total capacity of 270MW. Other power stations exist using combined cycle, oil and gas. SEB is targeting a generation mix of 70 per cent hydro, 20 per cent coal, 15 per cent gas and 5 per cent other renewable sources, such as biomass and solar energy, often referred to as the “Fifth Fuel”. Such alternative fuel sources are expected to provide 100MW of power by 2019.

Biomass At the 2009 Copenhagen meeting of the Conference of Parties on climate change, Malaysian Prime Minister Dato Seri Najib Tun Razak said the country was committed to reducing greenhouse gas emission intensity by 40 per cent by 2020, and biomass is one way of achieving this target. Sarawak has plenty of biomass resources such as wood and palm oil residues. Ta Ann Holdings Berhad, a timber company that has built a RM26 million biomass power plant at its plywood complex at Sungai Bidut, is already producing this type of energy. In Tanjung Manis, Homet Raya Sdn Bhd has built a 1.65MW wood waste-fired power plant, with the energy sent to a mill while part of the steam is used for kiln drying.

POWER

Ministries under Datuk Tengah play important roles in forest protection and success of SCORE YB Datuk Amar Haji Awang Tengah Ali Hasan is Second Minister of Planning and Resource Management and Minister of Public Utilities, with both agencies playing a part in the state’s SCORE initiative. YB Datuk Amar Haji Awang Tengah Ali Hasan Second Minister of Planning and Resource Management & Minister of Public Utilities

s a guardian of Sarawak’s natural resources and gatekeeper for foreign investment entry, YB Datuk Amar Haji Awang Tengah Ali Hasan and his ministries have an important role to play in the success of SCORE (Sarawak Corridor of Renewable Energy). Datuk Tengah is the Second Minister of Planning and Resource Management (MPRM) and Minister of Public Utilities. The MPRM is responsible for planning the development and utilisation of Sarawak’s natural resources for economic growth and ultimately to benefit the people of Sarawak while Public Utilities ensures the provision of affordable and safe water, energy, telecoms and gas for industrial, commercial and domestic use. SCORE is the Sarawak government’s key development plan to make the state a high-income economy by 2020. “Our ministries play very important roles in ensuring the successful development of SCORE,” said Datuk Tengah. “This is because the development of SCORE involves the utilisation of massive natural resources such as land, water and energy that we have within the SCORE area which fall under the purview of my ministries. “Our ministries are responsible for the planning and development of energy potentials, provision of water supply and land that are required by the industries to operate successfully. “In this regard, our roles are critical in facilitating both domestic and foreign investments especially in giving timely approval and ultimately in providing sufficient power and water supply needed by the industries.”

Energy demand Datuk Tengah stressed that the his ministries’ responsibilities within SCORE are also shared with other public bodies and agencies at state

and federal level, all working towards making Sarawak an attractive destination for investment by domestic and foreign interests. From an investor’s point of view, the supply of enough energy to power heavy industries is an important requirement. And Sarawak has obliged with several hydro-electric power stations planned around the state, including the 2,400MW Bakun Dam, which has already begun operations. Datuk Tengah’s purview includes the development of dams, which he said will offer spin-offs for eco-tourism.

"Our ministries are responsible for the planning and development of energy potentials, provision of water supply and land that are required by the industries to operate successfully.”" “These dams are meant to generate clean and sustainable power for the industries in the state,” he said. “The development of HEP Dams will provide more new eco-tourism products by capitalising the panoramic and spectacular view of the HEP lakes.” Eco-tourism is one of the three core nodes for SCORE, along with heavy industries at Samalaju Industrial Park and food security at the Tanjung Manis Halal Hub. In that respect, Datuk Tengah’s bodies help in ensuring the state’s most valuable asset, the pristine rainforests, are optimised for the enjoyment of lo-

cal and foreign tourists. “Tourism including eco-tourism is one of ten priority industries in SCORE,” he said. “In the eco-tourism sub-sector Sarawak focuses on the development of Culture, Adventure and Nature (CAN). “In this respect our Ministry, through the Forest Department, plays major roles in ensuring our tropical rainforests, a valuable tourism asset, are managed and developed for tourism on a sustainable basis.” The management of forests include the conservation of national parks such as Gunung Mulu and the Niah Caves, which contain some of the most spectacular natural wonders in Asia.

Forest protection Sarawak has millions of square kilometres of forests to utilise and protect. Protection and management of the state’s natural resources is a significant part of MPRM’s responsibilities. The Ministry formulated the Natural Resource and Environment Ordinance 1993 that provides a list of Prescribed Activities to ensure all development meets environmental standards. “Protection and management of natural resources is always an important component in our development plans,” he said “We take great efforts and care in protecting, conserving and managing our natural resources so that these resources are utilised on a sustainable basis to meet the current and future needs of the state. “To ensure that our natural resources are well managed we have established the relevant agencies including the Land and Survey Department, Forest Department as well as Natural resources and Environmental Board. “For these agencies to function efficiently and effectively we have created the various ordinances on the protection and management of our natural resources and environment.”

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POWER

Norse-powered SEB ready to quench Sarawak’s thirst for energy Sarawak Energy Berhad, with Norwegian Torstein Dale Sjotveit at the helm, is poised to become a key player in the provision of hydro and coal power to satisfy the state’s never-ending need for cheap and efficient energy. Torstein Dale Sjotveit | CEO | Sarawak Energy Berhad

s the state’s prime power provider, Sarawak Energy Berhad (SEB) has the resources, experience, support and expertise to serve Sarawak’s vast energy needs. SEB, in which the state government has a majority stake, is undertaking a series of projects that would virtually cover the energy-intensive electricity requirements throughout the state, including the hot zones of the Sarawak Corridor of Renewable Energy (SCORE). They have recently agreed a Power Purchase Agreement with Sarawak Hidro Sdn Bhd, operators of the Bakun Dam hydro power, which will produce 2400MW of electricity at its peak and is the largest hydro-electric power station in Southeast Asia. The deal will allow SEB to take up the entire energy output of the dam. The company is also halfway through the Murum hydro power project that is expected to generate 944MW of power while plans are afoot for five more hydro-electric stations and two coal plants to be completed before 2020. All this energy needs to be distributed to users and, to that end, SEB is building a 500-kilometre 500kV State Transmission Backbone. The company estimates it will invest not more than RM30 billion in the years leading up to 2020, which is Sarawak’s target for achieving high-income status in tandem with federal goals.

Delivering the goods Driving these projects is Norwegian Torstein Dale Sjotveit, who was appointed CEO in November 2009 when he was given a clear directive as to what the company expects. “SEB’s owners, the state government and the board of directors, have given me a mandate to deliver four things: 1, the SCORE infrastructure, by which they mean the hydro, coal and

transmission projects; 2, attract the SCORE customers as soon as possible; 3, transform SEB from a stable but insular local monopoly into a modern corporation; and 4, to do this on our own two feet – without resorting to state government guarantees,” said Sjotveit. “We are on track to deliver on all four fronts. It’s important to note though that these achievements don’t belong to me. None of this would be possible without the previous 70 years of prudent management. Our predecessors have really done a great job of managing SEB to the point that these things are possible.”

"We are aiming to grow the business, in terms of output, by around 10 times in eight years" Sarawak Energy Berhad was incorporated in 1967 as Dunlop Estates Berhad and was listed on the Kuala Lumpur Stock Exchange that same year. In 1996, the company changed its name to Sarawak Enterprise Corporation Berhad following the Sarawak government’s acquisition of a majority stake. The name Sarawak Energy Berhad was adopted on 2 April 2007. Apart from domestic projects, SEB recently signed a Term Sheet for a Power Exchange Agreement to export bulk electricity to West Kalimantan. They are also exploring the possibility of selling power to Brunei and Sabah. Sjotveit is excited about the future and he draws on his diverse experience to steer SEB through the obstacles and challenges they face.

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Trained as a civil engineer, he was President and CEO of Europe’s biggest shipbuilding group, STX Europe AS (formerly known as Aker Yards). For 27 years before that, he was with Norsk Hydro, gaining experience in the oil and gas, polymers and petrochemicals, aluminium and international business development sectors, including a six-year stint in West Africa.

Meeting the challenges Before he left Norsk Hydro, he was President of Aluminium Metal, leading operations across 13 countries and 5,000 employees. “These experiences were great training for the challenges at SEB,” he said. “We are aiming to grow the business, in terms of output, by around 10 times in eight years. There aren't many jobs in the power industry that offer this kind of challenge and opportunity.” Sjotveit has a deep philosophical approach to management, insisting that humility is an important characteristic of a good leader. “To get to the top, a leader must have had some good luck along the way,” he said. “Leaders who don’t recognise this can easily overrate their own contribution to success. Particularly in a growing organisation like SEB in a culture with huge automatic respect for authority, humility is essential to provide people with the space they need to find their voice and give their best.” He also places great importance on ensuring a close relationship with the community. Many people in Sarawak are to be resettled because of SEB’s projects and Sjotveit said the exercise must be completed responsibly. “Our top priority is helping people directly affected by our projects by doing a top class job of resettlement,” he said. “We are also looking into pro-

POWER jects to allow young people in these communities to record their history and culture and project it to the rest of the world.” Indeed, SEB places great emphasis on ensuring that there are tangible benefits for people, inside and outside the company, from their business activities. The company’s decision-making processes also take this factor into account. “The most important decisions relate to people,” said Sjotveit. “Things like who fits where? Who has more to give? How far can they go with the right support? What do they need to get there? “This year at SEB, we have moved quite a few people around, some of them to positions a long way outside their comfort zone. I’m sure that there are many people in SEB who are much more capable than they think they are, so a big part of my job is to create an environment in which they can thrive.” “A utility business like ours requires strict procedures to make sure that we do our job safely and provide the kind of reliability of supply that our customers rightly expect. Creativity in this environment is therefore about finding

new solutions to old problems. “The main way to foster innovation is to support a culture where people are encouraged to put forward their suggestions. This is easy to say but it requires discipline to pause and really listen to what people are saying.”

"Given the speed and complexity of our agenda, it is a real credit to the Directors that so many of our decisions have been timely and correct" Sjotveit praised the Board of Directors at SEB, who he said deserved credit for the company’s successes. He said management has put up more than 150 papers to the Board since December 2010, and every submission is carefully considered. The Board comprises Chairman

and Independent Executive Director Datuk Abdul Hamed Bin Sepawi, NonIndependent Non-Executive Director YB Datuk Amar Haji Mohamad, Senior Non-Independent Non-Executive Director Dato’ Haji Idris Bin Haji Buang, Non-Independent Non-Executive Director Datuk Fong Joo Chung and Independent Non-Executive Director YBhg. Tan Sri Dato Sri Mohd Hassan Marican. “SEB is very fortunate to have a very strong Board of Directors,” he said. “Perhaps that’s what every CEO is supposed to say, but in SEB’s case it really is a key to our success. “Our five Directors have tremendous experience, both in Sarawak and Malaysia, and in some cases around the world. Given the speed and complexity of our agenda, it is a real credit to the Directors that so many of our decision have been timely and correct. “We have also put a lot of work into improving the clarity of our communication. It takes a lot of effort to be clear and precise and we have come a long way in this regard, not only in front of the Board, but in the decisions that we take in the Executive Management Committee.”

Our Products: POWER CABLES AND WIRES We manufacture two (2) types of power cables, wires and conductors, which are Low Voltage Power Cables (LV) and wires and High Holtage Bare Conductors (HV): • LV Cables, includes Single and Multi Cores, Armoured and Non-Armoured Cables • HV Bare Conductors, includes All Aluminium Conductor (AAC), All Aluminium Alloy Conductor (AAAC), Aluminium Conductor Steel Reinforced (ACSR) STEEL FABRICATION We are one of the leading fabricators in Sarawak and our products includes low-tension/high-tension distribution steel poles, street lighting column and highway guardrails, structural steel, tower/poles, steel bridges, galvanising services and all related accessories for distribution of steel poles. INSTALLATION AND COMMISSIONING OF TRANSMISSION LINES PROJECTS We also undertakes supply, installation and commissioning of power transmission system.

Sarawak Cable Berhad Level 8, House No.51, Lot435, Section 54, KTLD, Travillion Commercial Centre, Jalan Padungan, 93100 KUCHING Tel: 082 - 236000 Fax: 082 - 232681 Website: www.sarawakcable.com

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POWER

Sarawak Hidro determined to fulfil its energy promises The Bakun Dam in Sarawak is the centre point for the state’s power demands as it feeds heavy industries that need massive amounts of energy to survive. The company behind the dam, Sarawak Hidro, is confident the giant structure can fulfil its commitments. Tan Sri Izzuddin Bin Dali | Chairman | Sarawak Hidro

arawak Hidro has taken on a massive burden to go with its massive dam – and the company is determined to fulfil its promises to the people and provide a reliable source of continuous energy while enhancing quality of life. Tan Sri Izzudin Bin Dali, Chairman of Sarawak Hidro, said the huge Bakun Dam project will generate 2,400 megawatts of power, offering the region a fresh lifeline in terms of power and energy requirements. “We want to ensure we meet all those targets that we have agreed,” said Tan Sri Izzudin. “Our objective over the next two years is to achieve all that we have promised and not have any technical problems.” Sarawak Hidro’s commitments are to the people and to the Sarawak Electricity Supply Corporation (SESCO), which is so far the company’s one and only corporate client. Hidro is obligated to sell all its energy to SESCO, which then retails it to the population. “We are allowed to sell separately but what we agreed with SESCO is that they are buying everything that we produce,” said Tan Sri Izzudin.

Corporation and Hong Kong’s AML, have all decided to invest in the Samalaju project. The Dam was originally planned to provide energy for the West Malaysian states, Sarawak and Sabah, but it was decided later to restrict power delivery to only Sarawak.

Expanding Energy Tan Sri Izzudin said once Sarawak expands its energy capacity with up to 30 dams in the next few years, the government can look into the possibility of extending its power suppy to neighbouring Sabah as well. However, the priority is to ensure Sarawakians, even in remote areas, have easy access to power. “We are working with the Ministry of Rural Development to provide electricity to villages around the area (of the dam),” said Tan Sri Izzudin.

Concrete Giant Bakun Dam is the second tallest concrete-faced rockfill dam in the world and rises 236 metres above sea level. The crest is 750 metres long and its entire system, including the swathe of land that had to be flooded, is almost the size of Singapore. The power generated from the dam is crucial to the state’s ambitions to improve the economy through its Sarawak Corridor of Renewable Energy programme (SCORE). This includes the Samalaju Industrial Park, which is being powered by the Dam some 180 kilometres away. It is because of the power from Bakun that many of the world’s top companies, such as Japan’s Tokuyama

The entire dam project will eventually involve eight giant turbines generating power. The first turbine started producing power on the 6th of August 2011. Since then, a new turbine is cranked into operation every two-three months until all eight are function smoothly to generate maximum power. “Since the turbine came into operation providing energy, Sarawak has been taking all the energy that we produce,” said Tan Sri Izzudin. The chairman has been closely in-

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volved in the Bakun Dam project since it was launched in 2002 with the initial dividing of the river.

Personal Project Although talk of a possible dam in Sarawak started two decades ago, it was only nine years ago that the first serious steps were taken to ensure such a project become a reality.

"It would provide plenty of energy guarantees for foreign investors and entrepreneurs to set up tourism, industrial and agro-related businesses." “I was fortunate to be involved almost from day one in the project,” he said. “The idea of the project started almost 20 years ago. “I was in the Ministry of Finance before and they asked me to be involved in this project, in the construction. And then they asked me to be chairman of Sarawak Hidro. I am very fortunate.” Tan Sri Izzudin said once the entire dam project is complete, it would provide plenty of energy guarantees for foreign investors and entrepreneurs to set up tourism, industrial and agro-related businesses. “Tourists coming here can chill out. There is a hotel based on the concept of longhouses. In the evenings you can go on a boat ride and see the sun setting. There is tremendous potential,” said Tan Sri Izzudin.

POWER

Sarawak Cable powers up operations in bid to keep up with SCORE There are busy days ahead for Sarawak Cable Berhad, as it actively pursues a number of ambitious projects, signing MoUs with major Indian and Chinese companies and preparing itself to play an integral part in SCORE. Aaron Toh | CEO and Managing Director | Sarawak Cable Berhad

arawak Cable Berhad is emerging as an aggressive and dynamic power company in Sarawak as it secures important strategic tie-ups with influential partners and seeks to diversify operations. Sarawak Cable has existed since 1998 and has steadily built up a solid reputation in the manufacturing and trading of power cables and wires as well as installing transmission lines. The Kuching-based company recently announced on Bursa Malaysia (Malaysian Stock Exchange) that it signed a memorandum of understanding (MoU) with Sinohydro Corp Sdn Bhd and India’s KEC International to jointly prepare proposals for power transmission projects in Malaysia. Industry analysts believe the move will strengthen Sarawak Cable’s position as a leading integrated power solutions provider in Malaysia’s largest state. The company is also looking to bid for potential projects worth more than RM1 billion while expanding into overseas markets such as Brunei, Kalimantan and the Philippines. In addition, Sarawak Cable is keen to diversify its operations by manufacturing hybrid power inverters as part of the state government’s Rural Electrification Scheme (RES) and building sub-stations via joint ventures with strong partners.

Transmission bid Sarawak Cable Berhad’s CEO and Managing Director Aaron Toh said the company was bidding for transmission line projects put up for tender by the state’s other big power firm, Sarawak Energy Berhad. “Sarawak Energy Bhd is currently inviting open tenders for the supply of cables for transmission lines related to the Murum Dam and also from Tudan, Miri to Kuala Belait in Brunei,” said Toh. “Our company will be looking at such opportunities favourably as they are a core part of our business operations.” Sarawak Cable is also upgrading its

hardware to meet the demands of more projects as a result of the Sarawak Corridor of Renewable Energy (SCORE) programme. The company is procuring more machinery from funds set aside after their recent IPO. Toh expects SCORE to drive the company’s business activities, especially with the expected increase in demand for its aluminium bare conductors. “As SCORE will concentrate on many heavy industries requiring power, our company is in line to be a direct beneficiary of these activities due to the nature of our business operations,” said Toh.

"Our company is in line to be a direct beneficiary of these activities due to the nature of our business operations" He also assured retail investors that Sarawak Cable would be run efficiently, highlighting its track record in which it issued a dividend per share of 5 sen, representing a dividend yield of 10 per cent in the last fiscal year. The RES project, part of a National Key Result Area under the Government Transformation Programme, involves hybrid power inverters design to benefit rural communities. The inverters switch to a diesel generator once the solar power in the batteries is used up. “We are looking at a system where the generator component should only make up 30 per cent of the overall usage,” Toh was quoted as saying, adding that the market in West Malaysia was almost saturated because it was 95 per cent electrified, unlike Sarawak and Sabah. “There is a lot of room for growth in the

East Malaysian market,” he said. The tie-up with KEC and Sinohydro is significant. Media reports indicate KEC is one of the largest integrated power transmission EPC companies in the world, having successfully completed transmission-related projects in more than 40 countries. The group has a market capitalisation of US$386 million.

Crucial MoU It is also the second-largest maker of transmission towers in the world, with a capacity of 310,000 tonnes. Under its expansion programme, KEC acquired SAE Towers in September 2010 with an annual capacity of approximately 100,000 tonnes. China’s Sinohydro is an engineering giant with a wide range of expertise, including in the power sector. It is ranked No.6 in China in turnover, with total sales of over US$14 billion in 2010. Overseas projects accounted for 27 per cent or approximately US$4 billion of group revenue in 2010 and from this, energy and water-related sectors made up 43 per cent. Sinohydro has also been focusing on energy-related projects, successfully installing 20,000 megawatts of power plants, including the Yangtze Three Gorges, Jingping Hydropower station, Sudan Merowe Hydropower project and the 2,400MW Bakun Hydroelectric dam dam in Sarawak. Sarawak Cable’s decision to partner with the two mega-companies only strengthens its capabilities, position and reputation in Sarawak. If that’s not enough, Sarawak Cable is also aggressively seeking acquisitions. They have proposed to acquire a 65 per cent share in Trenergy Infrastructure Sdn Bhd, which is involved in the trading of cables, wires, conductors, steel towers and poles. It also wants to acquire the remaining 25 per cent it does not already own in Sarwaja Timur Sdn Bhd, which makes steel towers. “We want to be prepared for future deployments,” said Toh. INSIDE SARAWAK 2011 35

INFRASTRUCTURE DEVELOPMENT AND COMMUNICATIONS OVERVIEW

Sarawak thrives on technological advances to boost development Sarawak’s economy has been built largely on timber, palm oil and oil and gas. However, the government is placing greater importance on technology in its quest to achieve developed status by 2020.

arawak has a timeless reputation for rain forests, orangutans, agriculture, indigenous tribes and, more recently, timber and oil. Malaysia’s largest state is now pursuing equivalent fame for its technology industry. With Sarawak driving towards developed and high income status by 2020, technology has become an integral part of its overall economic surge. The government is keen to build on technological advances already achieved in various fields while pursuing fresh initiatives across a range of sectors. Sarawak’s Chief Minister Tan Sri Abdul Taib Mahmud has stated publically that he would like to see more foreign investment into the technology sector, particularly from the Middle East. Recently, Taib was part of a Malaysian government delegation led by Prime Minister Datuk Seri Najib Tun Razak that visited United Arab Emirates as part of the Invest Malaysia 2011 forum. Taib’s main role was to espouse the viability of Sarawak as an investment option, with Middle Eastern companies being lured to the state’s Tanjung Manis Halal Hub, a massive industrial park dedicated to halal (Islamically permissible) products and services.

The Early Years Although the importance of technology has only recently been emphasised, a number of early birds have already made a mark in Sarawak, setting up a solid base for future growth. T he e stablishme nt of Sacofa (Sarawak Common Communications Facilities) in 2001 was a major step forward in laying the foundations for the state’s technology ambitions. Sacofa is a Government-Linked Company (GLC), owned 85 per cent by government agencies and 15 per cent by Celcom Axiata. It is the state government’s quasitelecommunications infrastructure arm, providing technology and IT develop-

ment through towers, land and fibreoptic cables. It is responsible for building the IT and technology infrastructure in the state so that private operators, domestic and foreign, can provide internet, phone and data services to the population. The company has 500 towers scattered across 70 per cent of Sarawak with plans for 200 more, at a cost of RM250 million. The programme allows major service providers such as Telekom, Celcom, Maxis and Digi to reach pockets of potential users in the remote areas. Sacofa has already started the process of fiberizing the 500 towers.

Though Sacofa has emerged as the key driver of telecommunications development in Sarawak, they were not the first company to take up the challenge of building an IT infrastructure in the state Sacofa is also responsible for establishing the first physical communications link between peninsular Malaysia and East Malaysia with its submarine fibre-optic cable running from Mersing in Johor to Sarawak. In addition, they are in the process of forging a link between Sarawak’s administrative capital Kuching and Pontianak in Indonesian Borneo, which would result in a surge of traffic and cut costs for users.

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Global Player With the latest 4G and LTE technologies in the pipeline, Sacofa is keen to go beyond state and national borders and play a role in connecting Southeast Asia, Hong Kong, China and Japan in line with the objectives of Axiata, the Malaysian-inspired company responsible for international communications services. The ultimate aim is to make data, mobile and internet use more affordable for people as well as setting up an environment conducive to foreign investors, including those from the Middle East. Though Sacofa has emerged as the key driver of telecommunications development in Sarawak, they were not the first company to take up the challenge of building an IT infrastructure in the state. Among the technology-related pioneers to make their presence felt in Sarawak was Comserv, which was formed in 1985 by Malaysian and Australian concerns to provide network infrastructure, software and development work, training and e-business solutions to organisations. In early 1986, Comserv undertook what was then the biggest IT project in Sarawak. The Land and Survey Information System (LASIS) project involved the development of software for survey and mapping systems. It was launched by Chief Minister Taib in August, 1988.

IT Boost With the Rimbunan Hijau Group now on board as partners, Comserv is in a strong position to pursue their objectives of enhancing computer technology in Sarawak and boost the number of IT professionals in the state, supported by their 26 years of experience in the industry. In 1991, six years after Comserv emerged, Sarawak Computerisation Services Sdn Bhd was formed,

INFRASTRUCTURE DEVELOPMENT AND COMMUNICATIONS OVERVIEW later to become Sarawak Information Systems Sdn Bhd (Sains) – one of the state’s leading ICT systems integrators and solutions providers. Sains' reputation quickly spread beyond Sarawak and they are now well known among regional governments for their low-cost and professional delivery of IT solutions. The company has a close business alliance with the Sarawak government, providing a range of solutions for internet portals for various departments. It is also involved in healthcare, libraries, ecommerce and e-content, for which it is among the top companies in the world.

Award-winning Solution In 2009, Sains became the first company from Malaysia, and Southeast Asia, to win the United Nation’s World Summit Award (WSA) – the Olympics of the IT world. The company took the top prize in the “Best e-Content in eGovernment & Institutions” category for its Integrated Court System solution. The Sarawak government is also using IT to improve the way it operates. The Sarawak Civil Service Innovative Ideas portal (scs-ii) calls on employees to submit their ideas online as to how the civil service can be improved.

Apart from the corporate sector and government, learning institutions are playing an important role in enhancing technology development in Sarawak. Internationally recognised names in tertiary education have established a presence in the state such as Australia’s Swinburne University of Technology, Sawarak, Curtin University of Technology Sarawak, International College of Advanced Technology Sarawak, Technology College Sarawak as well as the technology departments of Malaysia’s flagship institution, Universiti Malaysia, Sarawak (Unimas). In fact, Unimas is leading the way in providing research end expertise for many Sarawak technology development projects. The university’s latest green technology venture has resulted in a partnership with Malaysia’s Pansar eQo Technology and Australia’s Bellwhether Agriculture to turn oil palm wastes into useful products.

Learning Curve The venture involves building a RM7 million plant at the Unimas campus to process Palm Oil Mill Effluent and Fresh Fruit Bunch to produce liquid fertilisers,

clean water that can be recycled and even electricity. Unimas is also helping the governments of Sarawak and Sabah solve electricity supply problems to rural areas through research and development support in a project worth about RM600,000. While the Sarawak economy continues to thrive on agro and forest-based industries, technology is no longer at the background providing behind-thescenes support. The technological landscape in Malaysia’s largest state is very much at the forefront of important initiatives to speed up development and attract foreign investors, be it telecommunications, computer-based advances or research and development. Recently it was announced that the Technology and Innovation Ministry (MOSTI) is ready to help the state set up a science park. Deputy Minister of MOSTI Datuk Fadillah Yusof said was quoted as saying in the media: “Whenever the state wants the details, we are ever ready to help them. As far as MOSTI is concerned, we are prepared to help in terms of advice and consultation and whatever assistance required by the state.”

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INFRASTRUCTURE DEVELOPMENT AND COMMUNICATIONS

MIDCom Minister eager to pave Sarawak with top-class road network Sarawak has a massive land area with a relatively small population, which means being judicious in spending money when it comes to building roads. Despite this, MIDCom Minister Dato Sri Michael Manyin Ak. Jawong is determined to improve connectivity in the state. Dato Sri Michael Manyin Ak. Jawong | Ministry of Infrastructure Development and Communications

onnecting the people of Sarawak is top priority for the state’s Ministry of Infrastructure Development and Communications (MIDCom) as it tries to bring together communities from all over its 124,000 square kilometres of terrain through a well-planned road network. MIDCom Minister, The Honourable Dato Sri Michael Manyin Ak. Jawong, said that while the will is strong, the realities of Sarawak’s sheer size means that funding for many projects is difficult to come by. “Our priority is connectivity,” he said. “There are people who live in rural areas that are still not accessible by road. We are a big state but we have only about 2.5 million people who are spread out across the entire area. “To build a road to connect a village of 2,000 people to a major town, the costs run into the billions of ringgit. Density is very small so it is difficult and expensive to build roads.” Roads in Sarawak are categorised depending on the area and width. Rural roads fall into the codes R1, R3, R5 and R7, the narrowest R1 roads being five metres wide. “R7 is the biggest but this does not mean that it is a dual carriageway,” said Dato Sri Michael. “These roads are still sub-standard, gravel roads good for the kampong (village). However, we don’t mind whether it is going to be R1, R3 or R5 as long as there is some kind of connectivity.” Dato Sri Michael said his ministry needs funding for two projects he considers urgent and in which foreign investment, particularly from the Middle East, would be welcome. The first is a road network within the Sarawak Corridor of Renewable Energy (SCORE) area that would cost about RM6 billion. Another project is a RM500 million, 60-kilometre dual carriageway road to be built from Bintulu Town to the Samalaju Industrial Park, which is

SCORE’s key zone for heavy industries. He said his ministry engineers have completed the designs and construction can start once funding is secured.

Funding “The planning has been done, the design is done and we are ever ready to implement the project,” said Dato Sri Michael, who added that the Bintulu-Samalaju proposal has been sent to the Prime Minister’s office in Kuala Lumpur in the hope of financial support. “The focus is on areas where there is an urgent need,” he said. “So, first priority would be SCORE.

"The focus is on areas where there is an urgent need. So, first priority would be SCORE." There is also a need for BintuluSamalaju. I have seen the place and there are already people working now who need this road.” MIDCom is also eager to improve the road connection from the Sematan in the east to Miri in the northwest, a distance of about 1,000 kilometres. Dato Sri said only one kilometre of this road features a dual carriageway, prompting appeals from the public for more overtaking lanes. However, a recent request for funding to construct more overtaking lanes was turned down by the federal government. “To build the entire stretch as a dual carriageway would cost us RM16 billion, so that is probably beyond our

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means at the moment,” said Dato Sri Michael. “So, we have been asking for overtaking lanes. That would really solve the problem. We are not asking for RM16 billion to build a highway. We just want overtaking lanes.”

Busy portfolio MIDCom, according to Dato Sri Michael, is one of the largest ministries in Sarawak because of its diverse portfolio of responsibilities. The ministry’s Public Works Department, the largest agency within MIDCom, is entrusted with managing much of its remit, including roads, water supply and buildings. The major sea ports in Sarawak also come under MIDCom’s purview. These comprise the Kuching Port Authority, Rajang Port Authority and Miri Port Authority. The Bintulu Port Authority (BPA) is under the jurisdiction of the federal government. BPA will manage the Samalaju Port, being built to handle sea traffic at Samalaju Industrial Park, once it is completed. The Brooke Dockyard and Engineering Works Corporation, Sarawak Rivers Board and Buoys and Lights Board are also under MIDCom’s management. MIDCom began as the Ministr y of Communication and Works after Malaysia achieved independence in 1963. Its first Minister was the current Sarawak Chief Minister, Pehin Sri Haji Abdul Taib Mahmud. In 1984, the name changed to Ministry of Works and Special Functions but only one year later became the Ministry of Infrastructure Development. To reflect its roles more accurately, the organisation changed its name to the Ministry of Infrastructure Development and Communications in 1996. Dato Sri Michael has been its Minister since 1 December 2009.

INFRASTRUCTURE DEVELOPMENT AND COMMUNICATIONS

Miri Port seeks approval for major upgrades in bid to become top regional port

he Miri Port in the northern part of Sarawak has grand ambitions to become one of the leading ports in Malaysia and they are looking for investors to help them achieve their lofty goals. The Port’s General Manager Shebli Hairani said the shallow access channel at the Baram River mouth, which can go down to only one metre during low tide and rise to three metres, means bigger vessels are unable to dock at the facility. However, the Port management recently made a major breakthrough when it successfully secured federal government funding to conduct a detailed study on upgrading the Port in order to cater for large ships. “There is a need for Miri to have a port at least beyond eight metres deep so we can cater for own traffic and cargo and facilitate the growth of trade in this hinterland,” said Mr Shebli. We are delighted to have secured federal funding, which is not easy to get, to conduct a study into how we can make the port deeper. “

Mr Shebli said the results of the study are likely to be known around June 2012. Should the study find that the proposed upgrades are viable, Miri Port would then search for investors to fund the venture, with Middle Eastern interests welcome to participate. “We will be looking at some funding options,” he said. “Upgrading the port is crucial to Miri’s economic growth.” Miri boasts thriving timber and palm oil industries and much of the products manufactured in the area make their way to peninsular Malaysia and abroad via Miri Port. In the first six months of 2011, the Port handled more than 500,000 tonnes of cargo and is poised to surpass its 2008 record of more than 870,000 tonnes. “Timber is exported midstream to mainly Far East destinations such as China, Hong Kong and Japan,” said Mr Shebli. “So, you can see that all the industries here are coming up. Mr Shebli said Miri Port’s ability to survive without government funding despite its limitations proves that it has the

Shebli Hairani General Manager | Miri Port management skills to work wonders with a deep-water port. “Although we are under the government’s framework, we are like a private company in that we have to be selfsufficient,” he said. “And even with the serious constraints, we have managed to sustain the Port. It shows you how hard we work.” He added that an upgraded Miri Port, which has won a number of domestic and international awards, would be a perfect complement to the activities of the Sarawak Corridor of Renewable Energy (SCORE), which is about 200 kilometres away.

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INFRASTRUCTURE DEVELOPMENT AND COMMUNICATIONS

Foreign investors can click on to Sarawak’s surging internet growth Internet use in Malaysia grew 40 per cent in the first part of 2011. And with vast potential for penetration in Sarawak, investors are being encouraged to become involved in the globe’s greatest internet growth areas. Dato Ir. Abang Jemat bin Abang Bujang Managing Director/ Chief Executive Officer | SACOFA

oreign investors eyeing Sarawak’s IT landscape are gazing upon one of the greatest Internet growth areas in the world, according to the head of Sacofa, the state government’s telecommunication infrastructure arm. Dato lr. Abang Jemat Abang Bujang, Chief Executive Officer of Sacofa (Sarawak Common Communication Facilities) said internet use in Malaysia surged more than 40 per cent in early 2011, with Sarawak playing an integral part. “The greatest boom for the internet is now here with growth in Malaysia better than any other country in Asia,” said Jemat. “And it is going to grow even more as we work with the Indonesian government to link Sarawak to Jakarta and Pontianak [in Borneo].” Sacofa, which was set up in 2001 as a Government-Linked Company (GLC), provides technology and IT development through towers, land and fibre optic cables. Its primary objectives are to build and expand the provision of telecommunication network infrastructures throughout Sarawak and connect it with the outside world.

Linking The World In April 2011, Celcom Axiata Bhd hired Sacofa to strengthen its cellular and data network coverage in Sarawak to 85 per cent from 70 per cent in a deal worth RM168 million. The proposed link between Sarawak’s capital Kuching and Indonesia’s Pontianak is crucial to a growth explosion in the regional market to support planned fibre optic networks that connect Philippines, Malaysia, Brunei, Singapore, Indonesia and Vietnam. Dato Abang Jemat said the time was ripe for investment in Sarawak from the Middle East with the federal and state governments implementing policies to enhance the investment environment. Among the aims is to ensure 100 per cent broadband penetration nationwide by 2020. “The infrastructure doesn’t bring in the money, what brings in the money is what comes out of this,” said Dato Abang Jemat.

“It can help intellectual capital so the climate is suitable for foreign investments. We can attract investors from the Middle East as we are well located geographically, there are no dangers from natural disasters, we have a stable political environment and good energy provisions.” Sarawak will also have greater connectivity to other countries in the region and the state can offer competitive prices in terms of labour and setting up costs. Already many companies have bought into Sarawak’s various industries, including the Samalaju Industrial Park and Tanjung Manis Halal Hub.

"We can provide internet speeds not seen in this part of the world" Sacofa, which is 85 per cent owned by government agencies with 15 per cent belonging to Celcom Axiata, has 3000km of fibre optic cables, including the East-West Submarine Cable System that links east and west Malaysia. Sacofa also owns 500 towers in strategic locations covering 70 per cent of the state. Under the national government’s Universal Service Provider project to develop and improve communications infrastructure, 200 more towers will be built in developing regions at a cost of RM250 million. The GLC, which celebrates 10 years in 2011, also enjoys fibre network connectivity with Brunei and an underwater cable system to Mersing, Johor on the west coast of peninsula Malaysia. Using the latest technology such as 4G LTE, Sacofa is keen to expand. “We are ambitious and want to go beyond the shores of Sarawak and provide alternative broadband services to West Malaysia, Brunei, Kalimantan and even to other Southeast Asian countries, Hong Kong, China and Japan,” said Dato Abang

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Jemat. Our fibre optic network is fully managed by the Network Monitoring System (NMS). With this, we can provide speeds not seen in this part of the world. All the people, even in the longhouses, will have access to the internet.” Sacofa is well into phase four of a sixstage road map outlining the company’s objectives until 2013. The phase involves the fiberisation of all communication towers throughout Sarawak. Phase five provides for setting up an Alternative Regional Communication Hub while phase six calls on Sacofa to investigate the creation of a data centre and cloud computing possibilities. The towers and fibre-optic networks ensure that bandwidth for internet use is affordable and readily available to all service providers on a sharing basis. “These low-cost infrastructures will attract more investors to come to Sarawak and will subsequently increase the penetration of broadband services,” said Dato Abang Jemat.

Key Partner Sacofa’s significance to broadband and communications in Sarawak is recognised by Malaysia’s leading telcos. Major players such as Telekom, Celcom, Maxis and Digi rely on Sacofa’s T2 Towers for their coverage. Dato Abang Jemat said investors from Middle East can make use of world-class communications systems that are safe, fast, cost-efficient and scalable to meet their expanding business needs “With the government’s high-speed broadband initiative, the environment has changed,” said Dato Abang Jemat. “The issues over the next few years would be preparing the network to support and meet the demands of huge bandwidth at cheaper rates.” In terms of a global presence, Sacofa took part in the My Regional Network initiative to boost international connectivity. “Sacofa aims to offer our submarine cable to be part of a consortium network and to lobby for direct international cable landing to Sarawak,” said Dato Abang Jemat.

INFRASTRUCTURE DEVELOPMENT AND COMMUNICATIONS

Mahmud stays focused as he juggles trio of Sarawak’s corporate giants Dato Sri Mahmud Abu Bekir Taib is one of the busiest business leaders in Sarawak with top positions in Sarawak Cable, Cahya Mata Sarawak and Titanium Management. He is now venturing into politics. Dato Sri Mahmud Abu Bekir Taib | Business Leader

s a key figure in three major companies in Sarawak, Dato Sri Mahmud Abu Bekir Taib has to wear many hats. He is chairman of Sarawak Cable Berhad, group deputy chairman of Cahya Mata Sarawak Bhd (CMS) and also a shareholder in Titanium Management Sdn Bhd. These three positions are enough to place him among the high-profile business leaders in the state. But Dato Sri Mahmud has another claim to fame – he is the eldest son of the state’s Chief Minister, Pehin Sri Haji Abdul Taib bin Mahmud. However, the political blue-blood pedigree is circumstantial as far as he is concerned. He often has to defend himself against accusations of favouritism. But he does so with aplomb, having plenty of ammunition from his experience and achievements in the corporate world. Dato Sri Mahmud has extensive experience in stock-broking and was a founding member of Sarawak Securities Sdb Bhd, the state’s first stockbroking company now merged with K&N Kenanga Holdings Bhd. He studied in the United States and Canada and is a leading advocate for maintaining Sarawak as a cost-effective place to do business and an attractive destination for foreign investment. One of his first projects after joining Titanium Management was to rebuild dozens of bridges originally put up by his father more than 30 years ago. They managed to complete the job at a cost much less than expected. “We were concerned about replacing those bridges, especially with the new palm oil estates where the trucks were getting bigger and the old bridges struggled to take the increased load,” said Dato Sri Mahmud. “We built them at a cheaper price. He said Titanium was now looking to diversify its businesses, moving away from bridge construction and focusing more on property develop-

ment. Much will depend on how fast the company can lure investors. “In Sarawak, the government has slowed down approvals for developments in order to avoid a bubble,” said Dato Sri Mahmud. “We had a crisis in the late 1990's when the banks tightened borrowing. We were unscathed because we didn’t borrow too much.”

"Hopefully, we can make The Isthmus the central business district. When SCORE is in full swing, we will have many high-paying jobs and more expats will be coming here. They require certain living standards that we want to provide" In his role with CMS, Dato Sri Mahmud is particularly excited about the development of a 275-acre piece of land in Kuching known as The Isthmus. Via the subsidiary CMS Land Sdn Bhd, the aim is to build a new city complete with world-class convention centre, hotels, retail outlets, commercial office space, residences, malls and a marina. He said the township would provide ideal living conditions for the many expatriates who are expected to move to Kuching to work on the Sarawak Corridor of Renewable Energy (SCORE) project, which is the state’s flagship

programme for developing the economy. “For a long time, we were just sitting on the land,” he said. “Hopefully, we can make it the central business district. When SCORE is in full swing, we will have many high-paying jobs and more expats will be coming here. They require certain living standards that we want to provide.” He said Sarawak has learned from past mistakes with the government making sure the price of land is not controlled by speculators. “In Sarawak, we managed to control our costs and the land cost isn’t speculative at all. The state is controlling it until serious buyers come in.” Dato Sri Mahmud is also kept busy with Sarawak Cable Bhd, in which he has a 36 per cent share. In November 2010, Sarawak Cable won a contract from Sarawak Energy Bhd for transmission lines worth RM98.68 million. Sarawak Cable Bhd is also on an acquisition spree to strengthen its core businesses of steel fabrication and transmission lines. The company is acquiring the remaining 25 per cent stake it does not own in Sarwaja Timur Sdn Bhd and is proposing to acquire a 65 per cent stake in Trenergy Infrastructure Sdn Bhd. “Sarawak Cable is very focused and very strong,” said Dato Sri Mahmud. Dato Sri Mahmud has reportedly said that he may enter politics. He is among the favourites to replace his younger brother Sulaiman Abdul Rahman Taib, for the Kota Samarahan parliament seat in the general election. “I have always thought politics to be very interesting. I merely helped 'in the background' in the past. Now i feel that i can contribute more directly to the people i can be more effective through politics . Dato Sri Mahmud is a member of the Parti Pesaka Bumiputra Party, which is part of Malaysia’s ruling Barisan Nasional coalition. INSIDE SARAWAK 2011 41

INFRASTRUCTURE DEVELOPMENT AND COMMUNICATIONS

Cahya Mata Sarawak provides all-in-one expertise to satisfy SCORE expectations CMS started off as a cement manufacture. However, they have expanded their services to such an extent, they can fulfil almost all of the infrastructural requirements of SCORE. Dato’ Richard Curtis Group Managing Director and Executive Director | Cahya Mata Sarawak Bhd

ahya Mata Sarawak Bhd (CMS) is a company whose name can be attached to any given project involving the improvement of Sarawak’s infrastructure or services. And with the Sarawak Corridor of Renewable Energy (SCORE) programme in full swing, CMS is at the forefront. Dato’ Richard Curtis, Group Managing Director and Executive Director of CMS, said the company is well equipped to deal with a number of SCORE projects that require their expertise. “Most companies in Sarawak focus on one business but we have a portfolio of industries that cover the whole state,” Dato' Richard said. “We maintain roads, we trade construction materials, build townships, have investments in pipe makers, steel fabricators and in investment banking, so we are pretty much involved.” The company started out as a cement maker but gradually diversified and lists its official businesses as cement, construction materials, construction and road maintenance, property development, Samalaju development, services and financial services. CMS’s expansive portfolio means there are few projects that do not involve them. As a result, the company is in an ideal position to play an integral part in the success of SCORE. “If our construction division does not get the job, we still invariably supply the cement, pipes, stone and many other materials" said Malaysian born Dato' Richard Curtis. "CMS has a close knit team of managers meeting all these various needs which enables us to be in a dominant position to understand SCORE and to serve as a unique one stop gateway to the state.” Cahya Mata Sarawak, which roughly translates to “the light of Sarawak’s eye” or “the child of Sarawak”, was formed in 1974 and, in 1989, became the first company from Sarawak to list on the main Bursa Malaysia exchange. In 1994, the diversification process started and, two years later, the company changed its name to its current one

from the original Cement Manufacturers Sarawak Sdn Bhd. Five years ago, CMS underwent major managerial changes in order to take the company forward. “When new management came in in 2006, we developed a plan to focus our business on Sarawak. We diverted all our peninsula Malaysia and overseas investments to Sarawak. We have the funds, the management capability and the bandwidth to handle all projects,” said Dato’ Richard.

"Aluminium is the metal for the future and if you look at the level of its use in the West we are far behind." Although CMS is involved in a host of SCORE projects, two in particular have received much publicity. One is its partnership with global metal giant Rio Tinto Alcan to build an aluminium smelter at Samalaju Industrial Park (SIP) in Bintulu. The other is its partnership with Naim to develop an SIP township. The aluminium smelter, worth US$2 billion, will be run under joint venture company SALCO and is expected to contribute up to RM2.4 billion annually to Malaysia’s GDP, in addition to generating 4,700 direct and indirect jobs. CMS is the major partner in SALCO but Dato’ Richard said the involvement of a big name such as Rio Tinto shifts the investment spotlight firmly on Sarawak. “Aluminium is the metal for the future and if you look at the level of use in the West we are far behind,” he said. “It is very appropriate that Sarawak goes into the energy industry. That is why it was important to have a joint venture with Rio Tinto because they set a certain stand-

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ard. They uphold the conventions of the UN and so forth which are now observed by Sarawak.” CMS, through its subsidiary Samalaju Industries Sdn Bhd, has also entered into an agreement with property developer Naim Cendera and the Bintulu Development Authority (BDA) to build a township and housing development at SIP. The joint venture seeks to develop and operate temporary camps and facilities for construction workers involved in the businesses locating to SIP, which is a key node of the SCORE programme. CMS will own 51 per cent, Naim 39 per cent and BDA 10 per cent. “There are two components,” said Dato Richard. “One is building and operating work camps during construction. In Asia, they don’t take a lot of care of the workers and it creates a lot of social problems, especially in huge projects. Under our project, we feed them, house them and provide recreation. Dato’ Richard is among those who devote their time to community programmes. His leadership skills come from vast experience on a global scale, having worked in the United Kingdom, Hong Kong, Singapore, Indonesia and Malaysia.

Multi-cultural “I am multi-cultural,” said Dato’ Richard, who studied law in Bristol, England. “I have been very exposed to multi-cultural environments. So you draw inspiration from these different cultures and places to create a synthesis of what will work the way you are. “I was brought up in Malaysia in a Malaysian setting. I try and marry the best of both East and West to optimise our business management. I am also accustomed to companies with multi-business units. Most people run businesses with just one focus. CMS is a focussed conglomerate and our proven management team is adept at linking our different business units to provide a seamless one stop service to our customers in the state.”

INFRASTRUCTURE DEVELOPMENT AND COMMUNICATIONS

Sarawak has talent and resources to provide top-notch ICT support Comserv is among the first companies in Sarawak to offer software solutions services in the state, having been in operation since the mid-80s. Its MD Haji Andre Suharto said investors need not worry about ICT support. Haji Andre Suharto | Managing Director | COMSERV

arawak-based ICT companies can serve the needs of potential Middle Eastern investors better than the major global players from West Malaysia, according to the head of the state’s pioneering software solutions firm, Comserv. Mr Andre Suharto, Managing Director of Comserv, which was formed in 1985, said the kind of support offered by ICT companies with a physical presence in Sarawak is superior to anything KL-based players, no matter how big, could provide. “There are bigger companies in West Malaysia but the problem is after-sales support,” said Mr Suharto, whose company has been providing solutions for the state government for more than quarter of a century. “It is one hour and 45 minutes to get here from Kuala Lumpur. And their services are much more expensive. Today, most IT companies in West Malaysia do not have a presence in Sarawak. Even the ones that do, such as IBM and HP, only provide hardware. They don’t provide software and enterprise business support.”

Veteran Providers Comserv provides ICT solutions to agencies and businesses in various industries, giving them the tools needed to grow, control costs and widen profit margins. The company started out as a joint venture between Malaysian and Australian concerns in 1985 but is now in collaboration with business solutions provider SAP Malaysia. In 1986, Comserv created the computerised Land and Survey Information System (LASIS) for the state government, which allowed for easy access to information on specific pieces of land in Sarawak – who owns the land, title reference numbers and how the land can be developed. The system was later extended to allow the public to access information

on the status of land plots. The company has since expanded its services and provides solutions for manufacturing and cross industry. Mr Suharto said Comserv is now trying to develop an integrated log tracking system for the timber industry that can meet the needs of the various overseeing bodies in Sarawak.

"Either the investor already has one or they don’t. If they don’t we will provide them with the infrastructure, hardware, software, wi-fi internet connection and other support" He said organisations such as the Sarawak Forestry Corporation, Department of Forestry and Harwood Timber, which is a subsidiary of the Sarawak Timber Industry Development Corporation, all monitor the harvesting of logs. Information on logs such as serial number, species, who the concession holder is and other important data must be established before an export permit can be issued. “They have the job of checking and auditing work done in the field,” said Mr Suharto. “The problem is each organisation is using its own application and it is not integrated. We want to provide a solution in which everyone is using the same system. Mr Suharto said that Comserv is also working on a smart tag system for trees, so that someone can use a read-

er to click and check a tree’s species, its GPS position and other information that can detail the status of inventory over a specified area. Enforcement officers can also use the reader, which is still in the prototype stage, to check logs that are being transported and identify whether the timber has been stolen or is legal. He hopes that the government and various timber organisations can one day agree on funding for the system.

Full Service Mr Suharto said foreign investors, including those from the Middle East, can be assured that, given his company’s experience in serving government and private organisations, all their ICT requirements would be met satisfactorily. “When investors come over here, they need a computerised system,” he said. “Either the investor already has one or they don’t. If they don’t we will provide them with the infrastructure, hardware, software, wi-fi internet connection and other support. “We can even start from scratch, educate them and help them develop their business.” “The image we want to portray is that we are there to help them, we have the experience and we can serve their needs.” Mr Suharto is also head of the Sarawak Chapter of Pikom, the Malaysian national IT and multimedia computer association based in Kuala Lumpur. As its regional head, Mr Suharto is keen for the body to work with the state government to conduct a study on ICT penetration in Sarawak’s private sector. He believes companies aligned with Pikom would enjoy more credibility with potential foreign investors who would need to work with partners that have been sanctioned by a government body. INSIDE SARAWAK 2011 43

INFRASTRUCTURE DEVELOPMENT AND COMMUNICATIONS

Marine engineering giant HSL to build on Sarawak success Hock Seng Lee is a marine engineering company in Sarawak that has contributed much to the infrastructural development of the state. Managing Director Dato Paul Yu Chee Hoe says the state is ripe for investment. Dato Paul Yu Chee Hoe | Managing Director | Hock Seng Lee Berhad

nvestors from the Middle East should look upon the Malaysian state of Sarawak as a rapidly developing industrialised region with vast investment opportunities, said a top local captain of industry. Dato Paul Yu Chee Hoe, Managing Director of leading Sarawak construction company Hock Seng Lee Berhad (HSL), said the Sarawak Corridor of Renewable Energy (SCORE) project has thrown open a range of investment avenues for foreign interests. “The image of Sarawak is one of a state rich in natural resources and with vast development potential. It is in the process of rapid industrialisation,” said Dato Paul. “Investment opportunities for Middle East investors are numerous. The Halal Food Hub at Tanjung Manis is but one example among many within SCORE.” HSL is a Sarawak-based marine, civil and construction engineering company performing dredging, land reclamation and earthworks, road and bridge construction, flood mitigation, tunnelling, rural water supply and other infrastructure projects for ports, airports, industrial parks, townships, educational institutions and affordable housing.

SCORE projects The SCORE project is Sarawak’s flagship programme to increase the pace of development in Malaysia’s largest state. SCORE has produced a number of industry-based hubs, including the Samalaju Industrial Park in Bintulu and the Halal Hub in Tanjung Manis. Dato Paul said investors can look at HSL’s earnings over the past few years to obtain an idea of the impact SCORE has had on Sarawak in terms of infrastructure and other major projects. He said the group’s order book has double in three years and is approaching a record RM2 billion.

“This is a reflection of the dramatic pace of infrastructure progress under the Tenth Malaysia Plan as well as the advent of SCORE,” said Dato Paul. HSL, the first company from Sarawak to be listed on the Bursa Malaysia’s construction counter in 1996, posted record earnings of RM98.4 million in 2010, up 30 per cent from the previous year. Revenue was a record RM488.3 million, also a 30 per cent increase.

"Investment opportunities for Middle East investors are numerous. The Halal Food Hub at Tanjung Manis is but one example among many with SCORE" One of the group’s key projects is the centralised sewage system for Sarawak capital Kuching using hightech underground tunnel boring hardware. Dato Paul said the company has the advantage of working to a niche market in terms of marine engineering, focusing mainly on mass land reclamation along low-lying swampy areas of Sarawak’s long coastline. The fact that Sarawak occupies such a huge area – equivalent to almost the entire peninsula Malaysia – means there is plenty of coastline and land to be developed and, as such, requires HSL’s expertise and equipment. “Reclamation, earthworks, piping, roads, bridges and the many other

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forms of construction requiring geotechnical or water-related engineering expertise are strongly in demand in Sarawak and yet local skills in these fields are rare,” said Dato Paul. “For this reason, and in view of our technical expertise and track record, we foresee HSL’s growth story to be an ongoing one. “However, we are an established company with an excellent track record, consistent growth and sound financials. We have strong local knowledge and skills in a field that is specialised and much in demand.”

Future growth With foreign and domestic investors continuing to plough money and resources into Sarawak, Dato Paul is confident that his company is prepared to meet the challenges of fulfilling the increasing number of infrastructural projects that are likely to be implemented in the near future. He said in 10 years’ time, he hopes HSL would continue to be a leader in marine and infrastructure engineering in Sarawak and help to build modern and sustainable urban environments for the population. These include roads, bridges, sewage systems and new townships “There are still many opportunities for development in Sarawak,” he said. “After all, it has a land area 117 times the size of Singapore.” He said HSL is keen to leave a legacy in Sarawak. “We enjoy a niche market in Sarawak because of our unique skill set in marine engineering, our experienced technical and managerial personnel and our comprehensive range of advanced dredging, marine, heavy-lift, tunnel boring and other machinery,” said Dato Paul. “We are a hands-on contractor that delivers reliably and on time.” HSL posted a net profit before tax of nearly RM51.5 million for the first half of 2011, a year-on-year rise of 22 per cent.

INFRASTRUCTURE DEVELOPMENT AND COMMUNICATIONS

SAINS sets new ICT standards for rest of Malaysia to follow Sarawak Information Systems CEO Dato Teo Tien Hiong is not shy about the achievements of his company since it was formed in 1991, saying it is the top solutions provider in Malaysia without dispute. Dato Teo Tien Hiong | Chief Executive Officer | Sarawak Information Systems (SAINS)

n terms of making the most of ICT at government level, no place in Malaysia can beat Sarawak, according to the chief of the state’s leading information systems company. Dato Teo Tien Hiong, CEO of Sarawak Information Systems (SAINS), says the use of technology systems in various agencies of the Sarawak government and within the government itself is unrivalled by any other state in the Malaysian federation. “We have delivered more than 200 different systems,” said Dato Teo. “In terms of projects, they run into the thousands because similar systems have been shared and implemented in many different agencies. “Working closely with the ICT Unit of the Chief Minister's Department, we have managed to unify the Sarawak government as an entity in terms of ICT policy, ICT roadmaps and so forth. This has resulted in the Sarawak government being widely recognised as the top ICTutilising state in the whole of Malaysia. “That, I think, is without dispute.” SAINS (initially call Sarawak Computerisation Services Sdn Bhd) was set up in 1991 with the aim of leading the development and implementation of ICT within the state government in order to integrate its resources and offer better efficiency and effectiveness.

Government experience Consolidating ICT planning and the implementation of resources at government level was part of an overall plan to enhance socio-economic development for the people of Sarawak – a strategy that has largely succeeded and continues to provide a platform for growth in Malaysia’s largest state. SAINS began by serving only the Sarawak government. The company’s successes caught the eye of other public agencies, institutions and NGOs. Eventually, SAINS branched out to the corporate sector, particularly multinationals in Kuching and other parts of Malaysia,

such as Kuala Lumpur, Johor, Selangor, Penang and Melaka, as well as throughout the nation via country-wide federal government projects. Dato Teo has a background in ICT business and strategic planning and received his post-graduate education and training in the United States, New Zealand, Canada and the United Nations in Japan. He says SAINS’ experience with government administration makes them an obvious choice for similar organisations, which is why many state governments and corporates go directly to them. “All this expansion prepares us for even more customers,” said Dato Teo. “And now, people just say, ‘okay, we buy from you’.

"We have delivered more than 200 different systems. In terms of projects, it runs in the thousands" “The thing is we know corporate and public business very well in Malaysia. We know public administration inside out. We have been in it for 20 years. We eat and sleep and dream public administration.” In fact, Dato Teo has no qualms about asserting SAINS' preeminence as Malaysia's leading ICT Provider of ICT solutions for public sector computing. “Without any doubt, I’m saying this without any exception, that we are today the most knowledgeable ICT company in Malaysia in the area of public administration,” he said. “There is no other ICT company who is as good, as intimately knowledgeable on this subject as us. This goes for things like public finance, personnel, resource management, welfare, legal

systems and so on.” Included in SAINS' repertoire are development project planning and implementation monitoring, GIS and land information systems, agriculture, public works, and innovations using telemetry, RFID and other solutions in its armoury of skills that are superior to its rivals. He hopes this advantage in local presence and knowledge will place SAINS in good standing relative to the ICT needs of foriegn investors in SCORE. While ICT is often the domain of technology-savvy experts, Dato Teo is able to simplify the work his company performs to suit the needs of the man on the street. He provides an example of a tree falling over on the road, blocking traffic and causing a nuisance. “To a particular member of the public, he wouldn’t know, neither would he care, who is responsible for that tree, whether it is the local council, public works, drainage or irrigation or Agricultural Department … all he cares is that the tree has fallen down and it is the government’s problem,” said Dato Teo.

Public service “So it is us who actually takes them through the procedure. We escalate it to the entity responsible and when the problem has been dealt with, we send them a notification and thank the caller for his or her feedback.” SAINS can boast of a number of achievements that has raised its profile, not only in Sarawak but also peninsular Malaysia and even internationally. However, according to Dato Teo, the company’s greatest achievement is ensuring Sarawak is taken seriously as an ICT centre of excellence by fellow Malaysians. This is evident in the way other state governments seek to replicate what SAINS has done in Sarawak. Dato Teo’s leadership is the key driver behind SAINS' success. In May 2011, he won the Malaysian Business Award 2011 for Industry Merit, awarded by the Kuala Lumpur Malay Chamber of Commerce. INSIDE SARAWAK 2011 45

INDUSTRIES OVERVIEW

Improved transport network boosts links between Sarawak's key industrial zones With industrial development taking place across more than 350 kilometres of Sarawak’s SCORE area, the state is strengthening its road and rail network in order to meet logistical and transport demands.

n RM80 billion playground for leading heavy industry players from around the world is rising in Sarawak’s Bintulu region. The Samalaju Industrial Park (SIP) will house manufacturers from a range of heavy industries, including oil and gas, aluminium, silica, steel, marine engineering and dry and liquid cargo ports, among others. The park is one of several economic zones being built along the Sarawak Corridor of Renewable Energy (SCORE) – an expanse of several hundred kilometres running across the breadth of Malaysia’s largest state – and catering to various industries, including agriculture, technology and commerce. There are more than a dozen established and planned industrial centres spread around Sarawak, including the Tanjung Manis Halal Hub in Mukah, the Samajaya Free Industrial Zone in the capital Kuching in addition to key gateways to the outside world – Kuching Port and Bintulu Port. The growth of these core economic zones is being complemented by the Sarawak government’s efforts to build a sophisticated transport network linking major industrial parks, allowing goods and personnel to travel easily within the corridor and enabling exports to leave Sarawak efficiently and quickly.

Transport Network Central to Sarawak’s transport solutions is a 320-kilometre railway network, which would cross the entire Corridor and is a project that is comparable in magnitude to the vast amounts of resources being ploughed into developing the heavy industries sector itself. The project will utilise the RM67 billion set aside by the federal government to develop the basic infrastructure needed to support SCORE initiatives. It will be the first rail network

in Sarawak and cover 57 per cent of the state, from Samalaju in northeast Sarawak’s Bintulu area to the agrobased park in Tanjung Manis in the Mukah district. Chief Minister Tan Sri Abdul Taib Mahmud was quoted in the media as saying: “The rail project will be a viable alternative transportation in view of the constantly rising cost of fuel and other costs. “The SCORE project will bring tremendous benefits and opportunities, not only in terms of industries, but also other spin-offs for the people.”

"The SCORE project will bring tremendous benefits and opportunities, not only in terms of industries, but also other spinoffs for the people" Rail, road and the waterways in strategic areas of Sarawak are earmarked development in order to meet the transport requirements of the various industrial zones, for which the Sarawak government is seeking investment. Sarawak has more than 11,400 kilometres of roads, compared to less than 500km of sealed roads in the 1960s. Still, the road network needs to keep pace with economic development and vehicular growth. Between 1996 and 2001 the number of registered vehicles in Sarawak increased a staggering 17-fold, rising to 717,245. The government has already allocated RM5.5 billion to widen roads connecting Sarawak’s major centres, including routes leading to Pontianak, in Indonesia, and Brunei.

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River Ways There have also been calls to take advantage of Sarawak’s intricate inland waterways to transport people and goods. Plans are already afoot to make use of the Sarawak River for public transport and to ease traffic congestion. Sarawak has 55 rivers and more than 3,300 kilometres of potentially transport-friendly water routes. The hope is that the same routes that will ferry people by water taxis will be able to support larger vessels such as cruise ships and bulk carriers. Meanwhile, as the state seeks to solve pressing transport issues, the drive to boost Sarawak’s heavy industries sector continues. In fact, the Sarawak government is keen to make heavy industries its key contribution to the Tenth Malaysia Plan that runs from 2011 to 2015. Taib wants large and small investors from all over the world to come on board, promising big companies the freedom to wield their financial power. “The big companies are very competent and we have to learn to give them a free hand to adjust to their way of doing things,” Taib was quoted as saying. The Samalaju (formerly known as Similajau) Industrial Park is among the bigger projects and will be powered by the recently completed Bakun Dam hydroelectric facility .

Park Investors

The Park is 6,000 hectares on coastal Bintulu land and is expected to house 20,000 people by 2020. Meanwhile, a number of companies have moved in. Japan’s Tokuyama Corp is building two polycrystalline silicon plants in SIP. The first one, worth RM2.98 billion, is scheduled to start production in September, 2013, while construction

INDUSTRIES OVERVIEW of the second, RM3.72-billion facility, is to start in April, 2012 and is expected to be completed in January, 2015.

"The joint venture, called Smelter Asia Sdn Bhd, said it expects the smelter to have an annual capacity of 370,000 tonnes" Once both plants are completed, they will have an annual capacity of 20,000 tonnes. Preferential taxation offered to foreign investors was one lure for Tokuyama, as well as the resources available at SIP, including electricity, industrial water and quality workers. Recently, a Malaysian group led by Industrialist Tan Sri Syed Mokhtar Al Buhkary and Dubai business leader Mohammed Alabbar joined forces with the Aluminium Corporation of China

to build a US$1.6 billion Aluminium Smelter at SIP. One of the first companies expected to start production at SIP is Asia Minerals Ltd (AML), a Hong Kongfounded minerals company, which is pumping in US$200 million into its factory in SIP. AML is hoping to import up to 500,000 metric tonnes of manganese ore every year for processing and export 150,000 MT of final products to various markets. The joint venture, called Smelter Asia Sdn Bhd, said it expects the smelter to have an annual capacity of 370,000 tonnes. AML’s requirements have also been a boost to the nearby Bintulu Port. AML has vowed to invest in the port to enhance its capacity to handle the company’s bulk requirements, with ships coming in from South Africa, Brazil and Australia each carrying up to 50,000 MT of manganese ore. Bintulu Port is expected to start serving AML’s needs in 2012 and will continue doing so until the Samalaju Port in SIP is completed in 2013.

Port benefits One of the major reasons overseas companies are attracted to SIP

is because of the Bakun Dam, which is one of the biggest concrete-faced dams in the world. Although 180 kilometres away in central Bintulu, the Bakun Dam will feed SIP and Bintulu Port with power from its 2,400 megawatt generators. Heavy industries are electricity-intensive and efficient and smooth transmission of power from Bakun to SIP is crucial. This is why many companies are believed to be eager to join the heavy industry revolution in Sarawak’s central zone. With an improved transport system and investor-friendly policies, Sarawak’s Samalaju Industrial Park and similar economic zones are poised to attract billions of dollars of investments from domestic and overseas interests. The Sarawak government launched SCORE in 2008 in its quest to diversify the local economy from a largely agrobased to one that embraces technology, ICT, biotechnology, financial services and other sectors. The target for SCORE is for RM200 billion worth of investments by 2030, and with more than RM26 billion worth of approved investments already secured or pledged, the government is on target to meet its goals.

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Bintulu primed for investment frenzy The coastal area of Bintulu District, about 650km northeast of Kuching, is at the cornerstone of the state government’s SCORE programme. The Bintulu Development Authority is at the helm of promoting Bintulu as an atttactive investment arena for foreign interests. Datu Hj. Mohidin Hj. Ishak | General Manager | Bintulu Development Authority (BDA)

here is no better place for Middle East interests to invest in Malaysia than in Sarawak’s “fast-developing Bintulu district, said the head of the statutory body tasked with making investors feel at home and turning the area into a thriving, modern metropolis. Datu Hj. Mohidin Hj. Ishak, General Manager of Bintulu Development Authority (BDA), said Bintulu has been transformed in the past three decades. What was once a jungle is now becoming a key industrial region of Sarawak, with foreign and domestic investors scrambling to take advantage of the investment-friendly policies, skilled workforce and natural resources. Bintulu District, a coastal area covering more than 7,200 sq km and about 650 kilometres northeast of Sarawak capital Kuching, is one of the strategic areas being developed by the state government as part of the Sarawak Corridor of Renewable Energy project. It is integral to Sarawak’s quest to achieve high income status by 2020. The Samalaju Industrial Park is the flagship project in Bintulu. The Park encompasses 7,000 hectares on the Bintulu coast and has already attracted some big hitters of the global heavy industry arena.

Heavy hitters Japan’s Tokuyama Corp is building two polycrystalline silicon plants in Samalaju worth a total of more than RM6.5 billion while a Malaysian group led by Industrialist Tan Sri Syed Mokhtar Al Buhkary and Dubai business leader Mohammed Alabbar joined forces with the Aluminium Corporation of China to build a US$1.6 billion aluminium smelter.

Press Metal Bhd, which already has an aluminium smelting operation in Sarawak’s Mukah region, is building another in Samalaju. Hong Kong’s Asia Minerals is spending US$200 million for its plant in Samalaju to process Manganese ore while also improving the facilities at Bintulu Port so it will be able to handle bulk shipping.

"If you choose a place for investment in this part of the world, in Malaysia, I think Bintulu is the place. We are here, we have proven ourselves for the last 30 years and we can deliver what we say" Datu Hj.Mohidin reminded potential Middle East investors consider Tokuyama’s decision to choose Bintulu instead of other regions. He said the Japanese giant’s move was testament to Samalaju’s suitability as a major regional industrial hub. “It’s not easy to convince the Japanese, and we did it,” he said. “Bintulu has the land, the port and the opportunities. We have experience because we have been developing for 30 years.” While Bintulu Port will serve

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sea-borne traffic, land connections are being enhanced with improved roads and a major railway being built that would cover the entire 320-plus kilometres of the Sarawak Corridor of Renewable Energy Datu Hj. Mohidin urged investors to stamp their names on the infrastructure development projects of the state government. “There are a lot of investment opportunities here. Development of Bakun (Dam), the land, the roads, the Bintulu Port … all of them will need money to be developed,” he said.

Infrastructure projects Palm Oil is one of the major products of Sarawak and it is in this sector that investors with up to RM500 million to spend can gain from downstream activities, according to Datu Hj. Mohidin. “I believe this is a very good investment,” he said. “Maybe the state government doesn’t want to guarantee, but the project itself can give you guarantees. “We have thousands of plant forests already. We have something good going on. In every corner we have something good going on.” Bakun Dam is a recently completed 2,400-megawatt hydro-electric project, 180 kilometres away, that will serve the power needs of Samalaju Industrial Park and surrounding areas. Tokuyama was actually convinced to invest in Samalaju Industrial Park because of guaranteed access to this source of power. Apart from a business perspective, the Bintulu and Samalaju areas will be developed to provide excellent and comfortable living facilities for professionals, workers and their families. Indeed, the overall infrastructure

INDUSTRIES of the area is primed for more investment and development in the hospitality and tourism sectors. Population growth has sprouted shopping complexes and private medical centres such as Columbia Asia and Bintulu Medical Centre. However, there is a need for more such facilities as well as entertainment and family-orientated attractions.

Shopping paradise Datu Hj. Mohidin said if more shopping complexes were built within the greater Samalaju Industrial Park area, shoppers will be tempted to make use of the repurposed Bintulu Port instead of travelling all the way across the ocean to Kuala Lumpur.

"I have been talking about industrial development but of course tourism and hospitality are also very important for us. " Sarawak, known as the Land of the Hornbills, is a well-known ecotourism destination. And despite the industrialisation of Bintulu, the area still boasts lush rain forest and coastal resources that could boost tourism with the right kind of investment. “I have been talking about industrial development but of course tourism and hospitality are also very important for us,” said Datu Hj. Mohidin. “We can develop good resorts. If you look at Samalaju, there is already a settlement there. “We have the sea, seafood and people can go and enjoy the rain forests. There is also a very big river in Bintulu, we are building a road there. This is also an attraction. “We want investment in good roads and resort areas. It is just a matter of coordination to have good connections. "(Resort city) Miri is just two hours from Bintulu. We want to develop the railway so more tourists will come here.

“Once you have the facilities you can enjoy the sea, diving, go into the interior to enjoy the river and the trees. We have a national park also.”

30 years’ experience Datu Hj. Mohidin’s enthusiasm for the continued development of Bintulu is borne from the company’s 30 years of experience taking the region from untamed jungle to designer city and industrial powerbase. The BDA works closely with the Malaysian Industrial Development Authority to bring investment to Bintulu. The body was established on July 8, 1978 with a remit to coordinate development of the region at a time when the federal and state governments decided to develop onshore oil and gas activities. At the time, the offshore industry was already established and BDA helped to bring it onshore and produce Liquefied Natural Gas. The objective was to become one of the leading LNG exporters in the world. Now, Malaysia is among the top two, along with Qatar, with exports of up to 23 million metric tonnes a year. Datu Hj. Mohidin said BDA’s success with LNG highlights the important role it has to play in helping potential investors conduct business smoothly in Bintulu. “We have 30 years’ experience implementing projects on behalf of the state government. They provide the funding and for the infrastructure and we coordinate, meet people, improve the road system and generally help investors to feel at home,” he said. “We give them all the information they need and they carry out the necessary studies. Then they decide whether or not they want to invest and we help them.”

Personal commitment Datu Hj. Mohidin has, himself, been an influential part of the Bintulu’s development. Born in Bintulu, he studied civil engineering in New Zealand and has been actively contributing his expertise to Bintulu’s progress for the past three decades. “I have been working 30 years. We have dedicated our lives to our job. And we can see the develop-

ment of this area, from a jungle to what it is today,” Datu Hj. Mohidin. And he has high hopes for the future of the Bintulu area as he looks forward to a thriving and bustling city built on a platform of foreign and domestic investment. “I see Bintulu as an industrial and friendly city,” he said. “We are developing not only infrastructure but we are turning the town into a city with a business district and promenade. “We want the best medical centres, best hotels, top supermarkets and other things to meet the demands of a growing population. “If there are investors we will help them to have the land so they can be part of this great development.”

"We can develop good resorts. If you look at Samalaju, there is already a settlement there. We have the sea, seafood and people can go and enjoy the rain forests. " The Bintulu Developmment Authority was formed following the discovery of huge reserves of natural gas and oil offshore Bintulu. The development of this huge reserves warranted a central body that not only coordinates the development projects but can also implement projects on its own. Therefore, on 8 July 1978, the Bintulu Development Authority was created to undertake these roles. Under the BDA Ordinance 1978, the BDA was established to serve as the government agency to take charge of physical planning and development in Bintulu Division of Sarawak. BDA's designated area covers the whole of Bintulu Division with a total area of 12,515 square kilometres including five kilometres offshore. It consists of two districts: Bintulu District and Tatau District.

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X-Fab chief hails Sarawak as future tech stronghold X-Fab is one of the world’s biggest analog/mixed-signal famous foundries. The fact that the German giant has built a plant in Sarawak is testament to the Malaysian state’s potential as a technology hub. Hans-Jürgen Straub | Chief Executive Officer | X Fab

r Hans-Jurgen Straub, head of German foundry powerhouse X-Fab, said he has full confidence in Sarawak as an investment hub and urges technology companies to put their faith in the Malaysian state. Mr Straub, the company’s CEO who has been with X-Fab since 1999, said despite Sarawak’s fame as an agriculture and heavy industry centre, the state is primed for a technology revolution. “Malaysia and Sarawak is growing and this is good,” said Mr Straub. “You have a few technology companies in Sarawak but many potential investors don’t know the whole picture. “We are building a design centre here and I think there are good opportunities for technology companies to invest in Sarawak and set up operations. The infrastructure is improving and we are thinking long term. “I think it is important to promote Sarawak as a good place for investors. They can pretty much start immediately if they have the means.” X-Fab is the biggest analog/ mixed- signal foundry in the world with two plants in Germany, one in the United States and a factory in the Sarawak capital Kuching, which has a capacity of 27,000 eight-inch equivalent wafer starts a month. The wafer fabrication facility at the Sama Jaya Free Industrial Zone in Kuching processes the following: 0.35 µm, 0.25 µm, 0.18 µm and 0.15 µm CMOS logic and mixed-signal; 0.25 µm embedded Flash, CMOS image sensor & CCD; 0.35 µm, 0.18 µm high voltage; and 0.25 µm, 0.18 µm and 0.13 µm Flash. X-Fab is a specialist in advanced analog and mixed-signal process technologies that are not intended for digital applications but for analog applications that can be integrated with additional functions such as

high-voltage, non-volatile memory or sensors, said Mr Straub. X-Fab is a model company for Sarawak as Malaysia’s largest state seeks to gain high-income status by 2020 using the Sarawak Corridor of Renewable Energy (Score) project as its platform. The German company’s priorities go beyond revenues and profits and are also focused on building a long-term presence in Sarawak and developing a technology-oriented culture using qualified local talent.

"I think there are good opportunities for technology companies to invest in Sarawak and set up operations. They can pretty much start immediately if they have the means." Sarawak Chief Minister Tan Sri Abdul Taib Mahmud has already gone on the record as saying one of the key reasons X-Fab built a wafer fabrication facility in the state was to help bring back Sarawakian electronic engineers who left to work abroad or in peninsular Malaysia. For Straub, grooming local engineers through education is an integral part of the company’s overall business strategy. “This is very important for us,” he said. “We don’t like to send a lot of Germans and Americans here. We

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like to work with local people. “They live here and want to stay here and we do what we can to support the education and development of local talent.” Mr Straub said X-Fab is in collaboration with a number of Sarawak universities to boost their technologyrelated academic programmes. In addition, the company’s top engineers often visit the universities to conduct lectures. “We can even send people abroad to increase their knowledge and expertise,” said Mr Straub. “The important factor here is that education is an on-going process. If local talent can see that our education programmes are on-going, then they will want to come back to Sarawak and work at home rather than abroad.” In November last year, X-Fab announced sales of more than US$239 million for the first nine months of 2010, a year-on-year increase of 66 per cent.

Fun Factor But X-Fab’s strategy has always been to look at long-term benefits for the company and its stakeholders. And on a personal note, Mr Straub, a Masters Degree holder in Economics and with more than 20 years’ experience in the electronics industry, said the fun factor should not be ignored. “We have full confidence in our business model and we are happy with our results,” said Mr Straub. “Our strategy is always long-term. ”We would gladly sacrifice shortterm profits if we are presented with a good project that would give us longterm gains. “Even if I could raise the money myself, it would be more fun to invest in long-term products. I like fostering a culture in which investors are looking long term and that they should have fun. And you can only have fun if we all live together for a long time.”

INDUSTRIES

Sarawak timber body sows seeds of change to help expand wood-based industries The timber industry in Malaysia is reinventing the concept of resource management by replanting fast-growing tree species and producing value-added timber products. Datu Haji Sarudu Bin Haji Hoklai General Manager | Sarawak Timber Industry Development Corporation (STIDC)

he Sarawak Timber Industry Development Corporation (STIDC) was established in June of 1973 under the Perbadanan Perusahaan Kemajuan Kayu Sarawak Ordinance (1973). Also known as PUSAKA, the objective of STIDC is to stimulate by all possible means the planned expansion of the wood-based industries throughout Sarawak at a rate consistent with the overall interest of the economy, the availability of capital and technical expertise and effective management of the forest resources. The largest state in Malaysia, Sarawak is situated on the north-west coast of the island of Borneo. Although Sarawak is rich in natural resources, the state is sparsely populated in terms of people and home to vast expanses of lowland and highland rainforests. Sarawak recognises the importance of ensuring sustainability of its forest resources and conservation of its rich biodiversity and environment. For that reason, Sarawak is concerting its efforts to ensure that logging activities are carried out orderly so as to minimise unnecessary damages to the forests, the environment as well as to preserve the biodiversity. While Sarawak Forestry Corporation addresses matters of conservation and sustainability, Datu Haji Sarudu Bin Haji Hoklai, General Manager of STIDC, said the body is creating ways to add value to timber products and diversify Sarawak’s investment potential.

Green development One such initiative dedicates large areas of the state – currently one million hectares – to replanting and subsequently harvesting new-growth trees. This is expected to have a positive impact by reducing the negative effects of logging on Sarawak’s pristine old-growth rainforests.

This strategy is made possible by the rapid growth of tropical trees. The reforestation process usually takes place over a 25 year cycle. However, the trees being planted by the STIDC will mature and be ready for harvest in only six to seven years. Additionally, some “no go areas” are being planted solely for reforestation. This will greatly reduce the pressure on old-growth trees and will allow plantations to harvest and replant within the same areas, offering an effective and sustainable supply of timber.

"The type of timber produced in Sarawak can be treated upon demand" Whereas in the past there were no definitive guidelines as regards to green development, the Ministry has since established clear policies to encourage “going green”, which the STIDC is committed to upholding. Datu Haji Sarudu wants the timber industry to have a sustainable theme in the true sense, even though wood has limited renewable features. “Most people look at the timber industry as a sub-sector as they believe you cannot replenish your stocks,” he said. “We want this industry to continue growing.”

Investment and the GCC In addition to increasing the productivity of harvested land by replanting, the STIDC is also working towards producing secondary and tertiary timber products. Sarawak is well known as a producer and exporter of timber but the

STIDC wants to develop more downstream activities as opposed to exclusively exporting raw materials. “The type of timber produced in Sarawak can be treated upon demand,” said Hoklai. The STDIC’s expansion into the Middle East and GCC countries is moving in the right direction, with deals and ongoing discussions. The body has established relationships with a port in Jeddah, Saudi Arabia and also conducted exploratory talks with a port in Yemen. Datu Haji Sarudu was recently in Dubai on a fact finding mission and was delighted with the enthusiastic response he received from industry players. “Currently there are just buyers, but there is opportunity to explore,” he said. “Especially in the plantation forests as it will ensure a constant supply that will go directly to the GCC.” Current offerings of STIDC products are available through Matrade, which is the Malaysian national body for promoting exports to the outside world and which has a strong presence in the GCC.

Tanjung Manis Economic Hub One of STIDC's major roles is to promote the wood-based industry in Sarawak for mutual benefit. The development of Tanjung Manis as one of the economic hubs In Sarawak is poised to become the timber processing zone In the central region as well as the hub for aquaculture and agriculture industries, shipbuilding, Palm Oil Industrial Cluster (POIC) and Port City. Development programmes to support and cater for the investors are in the pipeline with the public facilities and infrastructure such as schools, roads, clinic, commercial centres, administrative centre, recreational centres and financial institution in place. INSIDE SARAWAK 2011 51

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Shipbuilding As part of the overall development of Tanjung Manis to serve STIDC’s needs, the body hopes to help out the shipbuilding industry by securing more land. An allocation of more than 200 hectares was already fully subscribed by domestic shipbuilding companies. In 2008, STIDC was attempting to secure another 49 hectares to boost the shipbuilding industry in the area and construction of the Tanjung Manis Shipbuilding Industrial complex was finally started on 16th February of that year in a ceremony officiated by the state’s Chief Minister Pehin Sri Haji Abdul Taib Mahmud. The Tanjung Manis Shipbuilding zone would cater for the construction, repair and maintenance of ocean liners and cargo vessels with capacity ranging from 30,000 to 60,000 tonnes. This would help to alleviate the effects of rising fuel costs by ensuring cheaper costs for sea transport. It is also expected to lure RM600 million worth of new investments and create 5,000 jobs by 2013. A subsidiary road project linked to the shipbuilding exercise allows Tanjung Manis to be connected to Sibu via an 88-kilometer highway that also passes through Bawang Assan and Sedeng. The project costs RM530, footed by the state government, and the increased access is expected to attract foreign investors keen to move into the area. A local company, Hock Seng Lee Bhd was tasked to develop the infrastructure for shipbuilding. At the time, 15 investors had shown keen interest in the project.

Palm Oil STIDC is also directly involved in the development of the palm oil industry, particularly downstream activities, with Tanjung Manis also playing a strategic role. The body teamed up with Senari Synergy Sendirian Berhad to develop a RM300 million integrated palm oil downstream complex and Central Oil Distribution Terminal in the zone. In addition to the plant, the project resulted in the building of a petroleum storage terminal, oil and gas jetty as well as a petrochemical and oleochemical park. It was hoped that the central region of Sarawak would produce an abun-

dant supply of of crude palm oil to trigger downstream activities such as bio-diesel and oleo-chemical plants. In a recent report, STIDC said it expects plywood exports to increase by between 10 and 15 per cent in 2011, with much of the demand coming from Japan as the country recovers from the Sendai tsunami in March. "The upward trend is due to a shortage in supplies caused by the lull in production and the difficulties in sourcing for raw materials due to the recent wet weather," it said. According to STIDC data, plywood remained a major contributor to Sarawak exports, accounting for 53 per cent of total export values, or RM848 million. The first quar ter of 2011 saw 588,152 cubic metres of plywood. The second biggest commodity in terms of export is log and there were 1.8 million cubic metres of the product sent overseas from Sarawak.

"It was hoped that the central region of Sarawak would produce an abundant supply of crude palm oil to trigger downstream activities" Despite Sarawak’s many attractions, the state continues to look for ways to bring in more tourists. Recently, the Tourism and Heritage Ministry said it was looking to see how other countries attracted tourists to their shores in the hope of replicating their methods. The Maldives, a group of tropical islands south of Sri Lanka, was the model the Ministry chose because of the country’s ability to lure affluent travellers. Tourism and Heritage Minister Datuk Amar Abang Johari Tun Openg was to lead a delegation to the Maldives on a fact-finding mission. He reportedly said the Maldives was a country which had gained success in the international tourism market by promoting the natural beauty of its tropical islands. “They have water bodies which they

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have turned into tourist attractions. In Sarawak, we do not have an ocean but have beautiful rivers and lakes as a result of our dam development,” he was quoted as saying in the local media “We want to study how the Maldives turned their lakes and islands into tourist attractions.” Datuk Johari said since more dams would be built in Sarawak, more lakes and islands were expected to be created. As such, he said the state must have early planning to turn the dams, lakes and islands into tourism products upon their completion. “After the trip, the ministry will work on new strategies to identify and develop the tourism products. We want to be on par with other countries in terms of tourism and have our own natural attractions. “We have rich biodiversity and our water bodies will surely be attractions for tourists in the years to come,” he said.

INDUSTRIES

Forbes-listed KKB Engineering provides crucial support for SCORE’s major players With a host of contracts secured from SCORE investors, KKB Engineering Berhad is proving that SMEs in Sarawak can benefit from the billion-dollar projects that are currently underway in the main economic zones. Dato Kho Kak Beng | Founder, Chairman and Group Managing Director | KKBEB

KB Engineering Berhad (KKB), founded by present Chairman since 1962, is one of the most active and dynamic companies in Sarawak, providing support services to major investors within the Sarawak Corridor of Renewable Energy (SCORE). Recognised as among the best Small to Medium Enterprises in Asia and boasting a diverse portfolio of manufacturing and engineering services, KKB has secured about RM370 million worth of contracts at Samalaju Industrial Park, which is SCORE’s key zone for heavy industries. KKB Group Executive Director Mr. Kho Pok Tong said his company’s activities showcase how home-grown Sarawak companies can benefit from the government’s SCORE project. “Since 2009, KKB, as a local home grown company has participated and been awarded a key Water Supply Project in Samalaju under SCORE’s initiatives,” he said. “Our engineering services and products, therefore, are pioneer beneficiaries of the government’s positive efforts to bring infrastructure readiness, targeted investments and continued developments in Sarawak.” Recently, KKB was one of 14 Malaysian companies named by Forbes Asia in its annual “Best Under A Billion” list, which named the 200 top-performing public listed SMEs in Asia in 2011 based on earnings growth, sales growth and shareholders’ return on equity in the past 12 months and over three years. It was KKB’s second straight year on the list.

Diverse projects The water supply scheme Mr Kho highlighted refers to a RM296 million contract within Samalaju Industrial Park, which includes the supply of steel water pipes.KKB has also secured a sub-contract worth RM5.5 million for a structural steel package for Japan’s Tokuyama Corporation, which is building two polycrystralline silicon plants in Samalaju valued at more than RM6 billion.Most recently,

KKB landed a RM70 million contract from OM Materials (Sarawak) Sdn Bhd for the proposed earthworks package at its Samalaju plant. According to media reports, KKB has been pre-qualified for Tokuyama's proposed plant phase II expansion project, and OM Materials’ and Hong Kongbased Asia Minerals Ltd's building and civil engineering packages for their proposed manganese plants. The water supply scheme is reportedly completed and is in the testing phase. The project aims to bring raw and treated water from Bintulu town to Samalaju.

"Sarawak is the future, not just for Malaysia but we believe South East Asia, to be a key and strategic location for future investments, be it upstream or downstream and related industries" KKB is keen to win more SCORE projects and has a cash and cash equivalent of RM91 million (as at 30 June 2011) to undertake major work. In a bid to boost the company’s profile and fulfil the greater demand for fabricated steel structures, KKB was constructing a RM20 million new steel fabrication plant in Muara Tebas, Kuching. Mr Kho said his company’s SCORErelated projects and Sarawak’s overall economic expansion will create more jobs for people in Malaysia’s largest state. “KKB will be able to participate in so-

cial and economic developments in the state and especially to provide jobs for the rakyat (people). “The ‘multiplier effect’ of activities will increase the quality of life of Sarawakians, such as clean, reliable and safe drinking water to the community. "The comfort and security of water supply, especially to the confirmed Foreign Direct Investors' proposed or ongoing projects taking place in Samalaju, are some of the benefits."

More jobs Mr Kho said KKB’s success was because of four key segments: Markets (long-term opportunities created by the industries and government ), Operations (the technical expertise and proven track records), Talent and Workforce (from management level to qualified, skilled and experienced personnel), and Financial Strength (credible margins, strong cashflows and a policy of prudence). He added: “KKB Group plans to expand (in logistics and capacity) and will be ready to participate in opportunities that we believe will present themselves over the next five to ten years. We are ready to meet the needs of potential clients.” He concluded by urging foreign investors, including those from the Middle East, to seriously consider putting their money into Sarawak. “Sarawak is the future, not just for Malaysia but we believe for Southeast Asia, to be a strategic location for future investments, be it upstream or downstream and related industries,” said Mr Kho. “SCORE will inevitably present much more opportunities than planned and as a Sarawakian entrepreneur, we maintain an exciting and dynamic outlook.” So far, SCORE has attracted more than RM26 billion worth of investments from foreign and domestic companies in 14 projects. With the state government targeting RM200 billion in investments, smaller companies such as KKB are expected to benefit from downstream activities and spin-off contracts. INSIDE SARAWAK 2011 53

INDUSTRIES

Stable Sarawak a safe bet for investors, says SEDC chairman Sarawak commerce chief YB Datuk Haji Talib Zulpilip tells potential investors that the state’s stable government and consistent policies make it a safe place for investment. YB Datuk Haji Talib Zulpilip Chairman | Sarawak Economic Development Corporation (SEDC)

oreign investors eyeing Sarawak have been assured that their money and property is safe in Malaysia’s largest state, said influential commerce chief YB Datuk Haji Talib Zulpilip. Datuk Haji Talib, chairman of Sarawak Economic Development Corporation (SEDC), said stable government policies that encourage foreign investment was crucial to ensuring Sarawak continued to be an attractive place to conduct business. In a message to Middle East investors, Datuk Haji Talib said: “We want to reinforce the fact that Sarawak is a good place to invest. The government is stable because policies don’t chop and change. “This allows investors to operate in an environment of stability. And even if policies do change, they would improve to suit businesses. So definitely, their investment is safe in Sarawak. “Even in (Malaysian) states controlled by the opposition, policies do not change.” SEDC's properties include the Damai Golf and Country Club, Sarawak Cultural Village, Grand Margherita Hotel, Riverside Majestic Hotel, Damai Beach Hotel, Permai Rainforest Resort, Damai Puri Resort and Spa, Parkcity Everly Hotel, Bintulu and Parkcity Everly Hotel, Miri. SEDC encourages Middle East investors to join forces with them for similar ventures that would target the tourism and leisure market. SEDC is a statutory state body established in 1972 tasked with promoting commercial, industrial and socioeconomic development in Sarawak.

Investment Incentives Malaysia, as a country, has a number of federal policies to encourage foreign investment, including 100 per cent equity ownership in new manufacturing projects as well as in ex-

pansion and diversification projects of existing companies. Meanwhile, Sarawak, as a state, offers additional incentives to foreign companies who wish to invest in the manufacturing sector such as the Pioneer Status tax exemption, which offers partial to 100 per cent tax relief depending on the value of investment. Other commercial lures for manufacturing companies, high-tech businesses and strategic industries that are considered of national importance include Investment Tax Allowance for qualifying capital expenditure and Reinvestment Allowance for capital expansion 12 months after the initial investment. Special tax exemption can also be granted for investors eager to enter the key areas of tourism and multimedia, as well as research and development.

"We want to reinforce the fact that Sarawak is a good place to invest. We are stable because policies don’t chop and change" Datuk Haji Talib said the investment opportunities available to overseas concerns are vast, particularly in the tourism and infrastructure sectors. This, he said, is a natural progression of an economy that is continuously expanding within a stable political climate. He has a special fondness for the tourism industry because he is also

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Assistant Minister of Tourism and Heritage for Sarawak. He said the state’s many unique tourism products, such as festivals, culture, tribal attractions, historical sites and natural wonders are valuable national assets that will continue to attract visitors from Malaysia and abroad. "Some foreign tourists who visited Sarawak liked to see these unique historical buildings too, not only the modern ones," he said recently. "Our environment must be clean and our country safe to visit in order to attract and sustain the flow of foreign tourists." Datuk Haji Talib’s confidence in the tourism industry is reflected in SEDC’s investment portfolio. At the end of December 2010, SEDC had invested more than RM533 million in the tourism and leisure sector, representing 69 per cent of the body’s total investments. Agro-Food Based Sector enjoyed investments worth more than RM61 million while SEDC also made smaller incursions into mineral, mining, roads and works as well as into entrepreneur development and manufacturing.

Certified Partners Sarawak is an expanding centre for overseas investment with the state having launched its SCORE (Sarawak Corridor of Renewable Energy) programme that has attracted several big hitters from Japan, China, Hong Kong, India and other countries to invest in heavy industries as well as halal products and services. SEDC is also heavily involved in community projects and plays an important role in supporting top sporting events to Sarawak. The body is one of a number of state and federal agencies that supports the Sarawak Regatta 2011 yachting event, which features more than 340 teams from Malaysia, Indonesia and Brunei.

INDUSTRIES

Trienekens proud of Sarawak clean-up job

rienekens Sarawak, the regional subsidiary of the German waste management giant, said its Sarawak operation is ready to meet all the disposal needs of foreign manufacturers wishing to invest in the state. Jurgen W. Pickenhagen, chairman of Trienekens (Sarawak) said his company had world-class facilities in Sarawak to deal with waste products from various industries and would be able to meet almost any challenge posed by potential foreign investors. The company has vast experience handling waste products for major oil companies such as Petronas and Shell and have 112 hectares of land to dispose of and process industrial, municipal, scheduled and hazardous waste. “We have the facilities and we have the experience. I can tell potential investors, whether they are from the Middle East or elsewhere, that we can take care of all their waste issues. We will provide solutions for them.” Its flagship facility is the Integrated Waste Management Park in Kuching, the first such park in Southeast Asia, featuring top-end equipment and tech-

nology to deal with the spectrum of waste products. The company, which in 2010 won the Chief Minister’s Environmental Award for Sarawak, is based in the Sarawak capital of Kuching but also has a major presence in Bintulu, catering to the needs of big companies that have set up shop at the Samalaju Industrial Park. Mr Pickenhagen said the Sarawak government’s open yet considerate policy towards waste management is an incentive for foreign investors. “Our government wants the international players to come here and these companies are used to good waste management programmes so will expect the same when they get here. We have companies such as Tokuyama and AML in Samalaju Industrial Park as part of SCORE. They wouldn’t come here if they didn’t think we could not handle the job.” Japanese polycrystalline silicon makers Tokuyama are building two plants at Samalaju while Hong Kong minerals powerhouse AML is also setting up a major installation in Bintulu. Mr Pickenhagen said waste management solutions are admittedly expensive but his company rides

Jürgen W. Pickenhagen Executive Chairman | Trienekens on the universal Polluter Pays Principle. “This is our philosophy, which should be the philosophy of the whole world,” he said. “Waste management, of course, doesn’t come cheap. But whoever pollutes the world has to pay for it. “But still, the investors are coming here. We need to know exactly what they will produce and from there, we can learn what kind of waste comes out of it, the quantity and how we can deal with it.” Other facilities owned by Trienekens include a secure landfill for scheduled waste, a leachate water treatment plant, hazardous waste incineration plant and scheduled waste storage building.

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INDUSTRIES

Malaysia LNG has confidence in Sarawak’s future amid economic development Malaysia LNG Sdn Bhd operates one of the world’s largest LNG production facilities at the PETRONAS LNG Complex in Bintulu, Sarawak. Its MD/CEO said the state stands to benefit from the company’s ongoing development and expansion programmes. Tuan Hj Zakaria Kasah | Managing Director and CEO | MLNG

he PETRONAS LNG complex (PLC) at Tanjung Kidurong, Bintulu houses 3 LNG production plants MLNG, MLNG Dua and MLNG Tiga. Spread over 276 hectares of land, the complex receives gas supplies from upstream installations offshore Sarawak and is one of the world’s largest LNG production facilities at a single location, with a capacity of 25.7 million tonnes per annum (MTPA). The LNG manufactured at the PLC is shipped to long term buyers in Japan, Taiwan, South Korea and China by PETRONAS’ shipping subsidiary MISC Berhad, the world’s largest single owneroperator of LNG carriers. The shipping company has delivered more than 7,000 LNG cargoes to MLNG customers since the maiden shipment to Japan on January 29, 1983. China is the latest market for MLNG. The company managed to break into this lucrative energy market following the finalization of a long term contract with Shanghai LNG Company Ltd in 2007.

Shanghai boost MLNG’s Shanghai LNG partnership marks yet another milestone achievement for the company. According to Tuan Hj Zakaria, MLNG has started supplying 1.5 MTPA of LNG to Shanghai LNG since June 2009 and will increase the volume to about 3 MTPA from June 2012 onwards. “China’s LNG demand has been growing in recent years and there is the potential that China will require more LNG supplies in the future,” he said. “As all our existing volumes from PETRONAS LNG Complex in Bintulu have already been contracted out to long term buyers, we will continue to assess our supply position for any future incremental demand.” The first production facility – Malaysia LNG (also known as MLNG Satu)

plant was constructed in 1978 and completed on August 7, 1982 to monetise the substantial gas reserves that were discovered in Sarawak’s Central Luconia basin, some 125km offshore Bintulu, in the early 1970s.

Monetising gas reserves The MLNG project was Malaysia’s largest and most ambitious undertaking at the time. It was also the nation’s single largest investment in manufacturing and required a quantum leap in technology and knowledge acquisition.

"Endowed with rich natural resources, Sarawak is a great potential for competitive energy sources, given its hydrocarbon resource base and renewable energy sources such as hydro, solar and potential biomass." The escalating demand for Liquefied Natural Gas led to the development of the second plant MLNG Dua and the third plant MLNG Tiga. MLNG Dua, located adjacent to MLNG Satu, commenced operations in 1995 while MLNG Tiga, constructed next to the two existing plants, commenced operations in 2003. Sarawak is moving ahead with ambitious economic development pro-

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grammes, led by the Sarawak Corridor of Renewable Energy (SCORE). MLNG Managing Director and CEO Tuan Hj Zakaria said he expects his company to benefit from the resultant growth.

Positive developments “The major developments taking place in Sarawak will definitely have a positive impact not only to MLNG but also to the whole state itself,” said Tuan Hj Zakaria. “SCORE will help accelerate local workforce development, skills and capabilities in addressing the resource demand.” “Also, it would strategically help make Sarawak better prepared for long term sustainability of its economic growth. Together, MLNG would also benefit from this opportunity by ensuring a steady stream of capable workforce that would ensure sustainability of its business.” Tuan Hj Zakaria noted that Sarawak offers plenty of opportunities for foreign companies, including those from the Middle East and Japan, to invest in a wide range of industries and effect positive economic and social change. “Endowed with rich natural resources, Sarawak is a great potential for competitive energy sources, given its hydrocarbon resource base and renewable energy sources such as hydro, solar and potential biomass. “From a social standpoint, Sarawak’s young, dynamic and talented population, coupled with the people’s liberal culture, encourages long-standing relationships on the back of values such as moderation, tolerance and mutual understanding.” Malaysia is the third largest exporter of LNG in the world. In the first half of 2011, government statistic show that LNG shipments rose 15.4 per cent from the same period a year ago to RM21.8 billion ringgit, almost a 10th of total exports.

COMMODITIES OVERVIEW

TMHH aims to become global centre for halal products and services With its natural resources and plentiful land, Sarawak is well-placed to continue serving global needs with established commodities such as timber, palm oil and minerals along with fresh initiatives led by halal products.

imber has been one of Sarawak’s staple processing and export commodity for decades but the government of the resource-laden Malaysian state is on a mission to boost its halal-related industry. Sarawak, Malaysia’s largest state lying on the northern part of Borneo Island, has initiated one of their most ambitious economic projects – the Tanjung Manis Halal Hub (TMHH), an integrated development aimed at turning Sarawak into a major centre for halal commodities and services that would be a magnet for domestic and overseas investment, particularly from the Middle East. Already about RM650 million has been pledged to TMHH. During a visit to the Gulf by a Malaysian delegation for the Invest Malaysia 2011 forum, led by Prime Minister Datuk Seri Najib Tun Razak, three crucial memorandums of understanding were signed. Tanjung Manis Food and Industrial Park Sdn Bhd, which is the central company driving the project, sealed MoUs with Perigon Advisory WLL, the New York-based Borneo Agriculture as well as United Arab Emiratesbased Inside Investor, according to Malaysian media reports.

Halal Partnerships Sarawak Chief Minister Tan Sri Abdul Taib Mahmud said the state is hoping to ride on the region’s reputation as a major force in Islamic finance and expand investment opportunities to include halal, or Islamically acceptable, commodities. "We're in various stages of talks with Saudi Arabia and other [Gulf] countries as we want to capitalise on this region's Islamic finance network," he was quoted as saying. With global markets bracing themselves for a possible food crisis, the TMHH-Perigon partnership is seen

as a vehicle to ease rising prices, particularly for Organisation of Islamic Conference countries. The MoU would obligate the two parties to investigate and seek out viable areas for collaboration and possible investment. Perigon’s remit would focus on agricultural, aqua cultural and horticultural projects, as well as other initiatives that would boost food security.

T he spin-offs from the development would include job creation, increased income per capita, infrastructure development and connectivity Perigon, a wealth and investment advisory firm based in San Francisco, may look into the possibility of a joint-venture investment with TMHH to set up a sovereign wealth fund dedicated mostly to food security investments. Borneo Agriculture’s involvement is likely to revolve around investment advisory services and agriculture development within TMHH. The company will also help with the creation of capital instruments that will hopefully drive RM1.5 billion in funds for the first stage of development. The collaboration will work to identify institutional and private investors for various commoditybased developments, including food processing and green and renewable energy.

Luring GCC Interest The agreement with Inside Investor will provide a solid platform for luring investment from Gulf Corporation Council (GCC) countries. Focus International will be asked to raise the profile of TMHH in the Middle East and attempt to land committed, long-term investors. This would involve strategic public relations and media events across the GCC. TMHH Executive Chairman Datuk Norah Tun Abdul Rahman was quoted as saying that Sarawak’s efforts in the halal industry would address many of the food inflation problems affecting GCC countries. In addition, Norah said: “The spinoffs from the development would include job creation, increased income per capita, infrastructure development and connectivity, as well as additional business opportunities that would present itself to residents of Tanjung Manis and Sarawak." While Sarawak ramps up its halalrelated ambitions, the state continues to play an important role in Malaysia’s national economy through its timber industry. From 2005 to 2009, timber contributed RM7.7 billion, or 35 per cent, of Malaysia’s overall export earnings of RM22 billion.

Timber Stronghold Boasting land area of more than 124,000 square kilometres, the state is blessed with an abundance of natural resources that drives commodities such as timber, palm oil, metals, non-metal minerals and natural gas. Despite its relatively large output, concerns remain about Malaysia’s ability to fulfil the rising demand for timber products such as furniture and reach its target export value of RM53 billion set under the National Timber Industry Policy. INSIDE SARAWAK 2011 57

COMMODITIES OVERVIEW The state’s efforts to meet this target hinge on the activities of forest plantations, in which trees are planted and then harvested specifically for timber use. Plantations are seen as the best means of boosting downstream timber production but, of the 1.3 million hectares designated for forest plantations in Sarawak, only 20 per cent of this area is so far being farmed. The four major timber organisations in Sarawak say heavy investment is needed to provide the funding and infrastructure to make use of the entire 1.3 million hectares available for production.

Foreign investment The Sarawak Timber Industry Development Corporation is actively seeking direct domestic and foreign investment in the wood processing industry as demand for timber increases from markets such as Middle East, Japan, China, India and United States. Among the downstream products primed from development are paper and pulp, furniture and plywood. While timber products dominate the Sarawak economy, palm oil has also been a powerful driver, especially in hard times. During the Asian economic crisis of the late 90s, Malaysia’s strong palm oil industry was a major source of foreign currency, with Sarawak playing its part. Already 1.1 million hectares of state and native customary rights (NCR) land supports palm oil plantations. The government is hoping to set aside two million acres, or 15 per cent, of state land for further palm oil development, a move that has the potential to earn Sarawak RM35 billion in annual revenue. NCR land is land that belongs to indigenous tribes who receive a dividend of profits from any development in the area Sarawak palm oil players are also seeking to expand downstream products such as margarine, cosmetics and soaps, which means ploughing more investments into refineries, which do not always benefit when palm oil prices rise because their overheads increase. In 2010, Sarawak contributed 10 per cent of Malaysia’s total palm oil output of 17 million tonnes. And the state palm oil industry is set to strengthen as the local government dedicates more land for plantations. Part of the TMHH’s goals is to attract more Gulf countries to invest in palm oil and its downstream ac-

tivities, which is now limited to a single investment from UAE. Under the SCORE scheme, a major state project to boost development of Sarawak’s renewable energy sector, the palm oil industry is among 10 that the government is keen to promote to foreign direct investors. However, palm oil in Sarawak is about more than simply generating profits for domestic and foreign investors. It is also about improving the lives of Sarawakians, especially those in the rural areas.

In 2010, Sarawak contributed 10 per cent of Malaysia’s total palm oil output of 17 million tonnes. And the state palm oil industry is set to strengthen as the local government dedicates more land for plantations. And with the state yet to realise its full potential in palm oil, the potential benefits are great. Datuk Abdul Hamed Sepawi, chairman of the Sarawak Oil Palm Plantation Owners Association, was quoted recently as saying: “Oil palm is a strategic industry for rural centric development and can alleviate poverty. If not oil palm,

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what then is the alternative for rural growth and economic development in Malaysia?”

Aluminium Allure Aluminium production is another industry gaining strength in Sarawak, which is attempting to race to the head of the queue as global demand for the metal increases. China and, to a some extent the Middle East, have already played their hand in a US$1.6 billion project to build an major aluminium smelting plant in Sarawak with the capacity to produce 370,000 tonnes a year. The Aluminium Corporation of China has joined forces with a Malaysian group headed by industrialist Tan Sri Syed Mokhtar Al-Bukhary and UAEbased businessman Mohammed Ali Rasheed Alabbar to establish Smelter Asia Sdn. The company will build a plant at Samalaju Industrial Park, about 180 kilometres from the Bakun Dam hydroelectric project. With demand for aluminium expected to grow four per cent globally over the next five years, the Smelter Asia plant is already ahead of the game in the race to meet world needs. Crucially, the involvement of Alabbar, in influential business leader with close ties to Dubai’srulers, could spark interest among GCC investors in aluminium and other commodities in Sarawak. With its natural resources and plentiful land, in addition to improving infrastructure and management skills, Sarawak is well-placed to continue serving global needs with established commodities such as timber, palm oil and minerals along with fresh initiatives led by halal products.

COMMODITIES

Deputy Chief Minister Datuk Alfred happy to help enrich lives of junglefolk The second most powerful man in Sarawak can often be found in the remote areas of Malaysia’s largest state, talking to people in rural villages and finding out for first-hand about their needs and living conditions. Datuk Patinggi Tan Sri Alfred Jabu Numpang Deputy Chief Minister, Sarawak /Ministry for Modernisation of Agriculture and Rural Development

hen Datuk Patinggi Tan Sri Alfred Jabu Numpang speaks about his contribution to Sarawak, rarely does he come across as a politician. Instead, he projects the convictions of a man eager to dirty his hands for the sake of the people, interacting with remote tribes deep in the forest, being tossed about in a 4WD vehicle during 10-hour journeys on jagged roads or researching nature’s poisons for potential pharmaceutical value. As Deputy Chief Minister and one of the most powerful men in Malaysia’s largest state, Datuk Alfred is as comfortable fending off mosquitoes in thick, muggy jungles as he is helping to implement the policies of the Sarawak government inside his plush, air-conditioned office in Kuching. Datuk Alfred is also the Minister for Modernisation of Agriculture and Rural Development (MARD), which gives him the opportunity to visit remote areas of Sarawak, strengthen conservation efforts and help to enrich the lives of rural communities. “We do a lot of conservation,” he said. “I love to see the world and I want to leave this world in a better condition than how I found it. I have travelled quite extensively and there are not many places in the world as interesting as Sarawak. “I am a trained agriculturist, with a lot of interest in scientific research. I have no problem spending three or four nights in the jungle.” As Deputy Chief Minister, Datuk Alfred said he is at the disposal of Chief Minister Pehin Sri Haji Abdul Taib Mahmud, even if it is outside of his portfolio. His job is to represent the Chief Minister when called upon to do so. “I enjoy doing it because I learn from him,” said Datuk Alfred. “I love the experience of meeting interesting people from abroad and local. We have endless visits and I learn from them. I love talking to intelligent people.”

Battling poverty However, despite the significance of his status as the Chief Minister’s right-hand man, Datuk Alfred is clearly excited about his MARD role. The Ministry’s main priority is to lift the burden of poverty from those in rural areas by helping them to benefit financially from their environment using sustainable methods.

"Over the next nine years, we are aggressively moving to rural areas and it is our responsibility to create access to these people so these areas can open up," About 50 per cent of Sarawak’s 2.5 million people live in remote villages and the commitment to helping these communities drives Datuk Alfred and his team to some of the most inaccessible parts of the state. “Over the next nine years, we are aggressively moving to rural areas and it is our responsibility to create access to these people so these areas can open up,” he said. “We believe it will take nine years to generate potential income from rural areas and take people above the poverty line to RM1,200 per family per month, as well as raise the income level of 40 per cent of the rural population to at least RM3,000 per month.” Many families in the area earn only

RM400 per month and he hopes the targets set can be reached by 2025, five years beyond the state government’s timeline for Sarawak to achieve high-income status. “We need more time because we need to develop infrastructure in both road and digital communication, both of which are very expensive,” he said.

Future talent Datuk Alfred, who places great importance on education, said he was convinced that the increased income would allow rural parents to send their children to schools and universities and create skilled talent to eventually fill jobs created by the Sarawak Corridor of Renewable Energy (SCORE) economic development plan. SCORE, which involves developing a range of industries and services across Sarawak, is expected to generate thousands of jobs over the next 20 years. Datuk Alfred said the rubber industry is ideal for rural communities to achieve self-sufficiency. The government’s plan is to give each family four hectares of land for rubber-tree farming. Datuk Alfred said 100 families could generate rubber revenues of at least RM700,000. “We teach them how to plant the trees, tap the rubber and then we buy from them,” he said. “We need more rubber and we have met with local people in various places who are keen to undertake these ventures.” “They are very interesting people and we should buy from them, we don’t need to buy from outside.” Datuk also has various plans in Sarawak to expand fish farming at sustainable levels, promote research of jungle flora for possible medical benefits and educate youngsters from remote tribes. It is all in a day’s work for one of the most hands-on political leaders in Sarawak and Malaysia. INSIDE SARAWAK 2011 59

COMMODITIES

Sarawak has the land, you provide the investment, says MLDS chief YB Tan Sri Dr James Masing, Minister of Land and Development in Sarawak, said Middle East companies eager to invest in food security projects may have the money but they don’t have the land. Sarawak can solve their space problems. YB Tan Sri Dr James Jemut Masing | Ministry of Land and Development Sarawak

s the Minister of Land and Development Sarawak, YB Tan Sri Dr James Jemut Masing has potentially millions of hectares of Native Customary Rights (NCR) land to develop into profitable ventures that could benefit land owners and investors. However, while he is surrounded by land ripe for development, Dr Masing needs investors to complete the equation. And he believes Middle East companies are ideally suited to fill that role. With the Middle East immersed in the food security crisis that is fuelled by the global increase in food prices, Dr Masing said Sarawak’s vast tracts of virgin land can help to alleviate the problem. “You tell the Middle East that we have land but we don’t have the money. You have money but you don’t have the land,” said Dr Masing, an ethnic Iban who studied in New Zealand and Australia. “In the Middle East, producing food is a problem. They have the money but not the correct terrain, the correct land to produce the food. “They can invest here for food production. We will provide the land, because we need this land to be developed and you can produce the food that you need.

Win-win situation “The native people who own the land can use the money that comes from the development of the land. It’s a win-win situation for the Middle East and Sarawak in terms of food production.” The Ministry of Land Development Sarawak (MLDS) was formed in 1985. After a couple of identity and policy changes, the role of the MLDS was enshrined in 1998 with its main objective being to develop NCR and other idle land into plantations and commercial projects that generate financial returns

for the land owners. Dr Masing earned his PhD in anthropology and, after a short stint working for Cisco, turned to politics. He is currently President of the Sarawak People’s Party, which is aligned with Malaysia’s ruling Barisan Nasional coalition. He said there was about 1.5 million hectares of untouched land that had the potential to be developed. His target for the next five years is to develop at least one million hectares, 400,000 of which is NCR, for palm oil and other cash crops.

"I think I’ve reached that target in terms of allocating areas to be developed but in terms of actual planting, we have done about 50,000 hectares" “I think I’ve reached that target in terms of allocating areas to be developed but in terms of actual planting, we have done about 50,000 hectares,” he said. However, finding the land and developing it is only part of the process. Dr Masing and his ministry must ensure that any development brings about financial benefits for the land owners, many of whom have been happy to leave their land idle and are suspicious of change. “The NCR land has been idling, doing nothing so we have to develop the planting of cash crops,” he said. “We have to make it productive in terms of

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producing cash crops. “The other thing that we must not overlook is the fact that we create accessibility into this area. Only then can the land owner do something. Whatever you plant, if you can’t get the crops out, there’s nothing we can do.”

SCORE solution D r Ma sing is c onf ide nt that Sarawak’s prime economic development plan, SCORE (Sarawak Corridor of Renewable Energy), can provide the all-important accessibility factor for MLDS’ development projects through its infrastructural improvements. “SCORE, among other things, provides accessibility and routes into rural areas and then it is easier for us to create land banks,” he said. “If investors see that there is no route in, they will say ‘I’m sorry’. And SCORE provides that first move into NCR land.” Dr Masing has also been a strong advocate for Malaysia to establish its own rice bowl, with Sarawak being the prime candidate to supply the nation’s staple needs. He said Malaysia relies too much on Thailand for its rice supplies. “I cannot understand what is happening,” he said. “We’ve got to be selfsufficient in rice. And that will come about if we develop the land that we have here. “In peninsula Malaysia, they’re doing it but they are running out of land. And Sarawak has plenty of land and there is no reason why we cannot create Sarawak as a possible rice bowl in Malaysia. At least let Sarawak be self-sufficient for rice.” Malaysia is currently about 80 per cent self-sufficient in rice with the government setting a target of 100 per cent self-sufficiency by 2015. Sarawak remains the country’s biggest producer of rice, though a fifth of Malaysia’s consumption requirements must be imported from Thailand.

COMMODITIES

Forest rangers revel in preserving Sarawak’s environmental treasures Malaysia’s Sarawak Forestry Corporation strives to balance economic, environmental and social interests in its important role as the guardian of the rainforest and leader of conservation efforts. Datu Haji Len Talif Salleh | CEO | Sarawak Forestry Corporation

he Malaysian state of Sarawak on the north-west coast of the island of Borneo is home to some of the most spectacular and diverse flora and fauna in the world. Managing Sarawak’s rich resources while preserving its unique ecological habitats and wildlife is a challenge that requires a close understanding of the people and cultures of the region. This crucial role is performed by the Sarawak Forestry Corporation, with CEO Datu Haji Len Talif Salleh at its helm. “Sarawak Forestry is mindful of the fact that although we operate primarily in Sarawak, some of the ramifications of what we do can be felt at the national and even global stage,” says Len Talif. Top priorities are “optimum productive utilisation of our forest resources compatible with the principle of sustained yield, maintenance of permanently forested areas for biodiversity conservation and protection of the environment … [and] sustaining economic competitiveness with a balance of social harmony and environmental integrity.”

Experience and innovation Established by the state government, Sarawak Forestry works in collaboration with timber and nontimber-producers as well as indigenous communities to conserve and develop Sarawak’s forest products in compliance with the Sarawak Forestry Corporation Ordinance (1995). With 36 years of forestry experience — including 31 years at Sarawak Timber Industry Development Corporation-Len Talif possesses a wealth of experience in resource management and a deep reverence for its environmental significance. He gives credit to the Right Hon-

orable Chief Minister of Sarawak as being “instrumental and the main architect of the Sarawak Forest Policy since he was the Minster of Forestry in 1966.” Sustainability policy has since evolved, and in 2010, Len Talif and his team launched a five-year initiative. “This plan is founded upon five major strategic thrusts, namely: efficient revenue collection, effective enforcement (of our legislative and regulatory provisions), value-added conservation, sustainable forest management and certification and efficient utilisation of resources.” Len Talif went on to add his vision for Sarawak Forestry is “to grow, but at the same time remain ‘lean and mean’. “We can achieve this by becoming financially more self-sustaining through the generation of ‘non-gazetted’ revenue from the commercialisation of some of our niche products and services. “Towards this end, we shall be strengthening the business development plans and strategies.”

Investment and the GCC Currently, approximately 10% of Sarawak products (RM600 Million) are exported to the GCC and other Middle East countries, but Len Talif feels this is only a small fraction of the potential if this same volume of timber was “driven up the value chain” to secondary products such as furniture, joining, pre-flooring components, and tertiary products such as activated carbon, silicon wafers and carbon-based composites. “Over 95% of timber products exported from Sarawak are primary products,” explains Len Talif. “The room for growth [lies] in value-added manufacturing.” With the availability of hydro-electric pow-

er (HEP) from nearby dams, Len Talif hopes to realise this potential, as well as make up to 7,400MW of HEP available in the Sarawak Corridor of Renewable Energy (SCORE) area for investments for energy-intensive industrial purposes.

"Although we operate primarily in Sarawak, some of the ramifications of what we do can be felt at the national and even global stage" Sarawak Forestry also welcomes investment in food processing, specifically halal food processing in the “Halal Hub” (also in the SCORE area); Bio-prospecting ventures including herbal and therapeutic plants; Clean Development Mechanism and Carbon Credit projects; and finally, Eco-tourism development in Sarawak’s extensive protected network of national parks, wildlife sanctuaries and nature reserves. “Come to Sarawak,” Len Talif said to investors. “See for yourself the vast potential for investment in all sectors of the economy, while at the same time enjoying the pristine landscape and range of wildlife unique and endemic to Sarawak only.”

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COMMODITIES

SALCRA bolsters commercial value of rural land development projects SALCRA has thousands of hectares of native land to develop and the body is encouraging remote communities to take a business-like approach in order to ensure maximum financial rewards. YBhg Datu Vasco Sabat Singkang | General Manager | SALCRA

fter successfully transforming the socio-economic well-being of Sarawak’s native rural communities through its commercial approach development of native customary rights (NCR) land, Sarawak Land Consolidation and Rehabilitation Authority (SALCRA) is now broadening its business activities. It shall assume a more active role in the Government Transformation Programme (GTP), particularly the National Key Economic Area (NKEA) and will heed the advice of the Sarawak State’s leadership to expand its activities by undertaking investments in viable business ventures and human capital development. SALCRA’s role is to develop NCR land so that it provides economic benefits to the owners. Unlike peninsula Malaysia’s FELDA, SALCRA does not identify suitable land and encourage people to settle there. Instead, the body looks for “in situ” projects in that they ask the owners to choose the land that they want to develop. SALCRA was formed in 1976 as the government’s agency to drive socioeconomic development in remote areas and bring rural communities into the mainstream of Sarawak life. The Authority's General Manager,

YBhg Datu Vasco Sabat Singkang, said in 1996, they decided to shift priorities by trying to encourage commercial ventures among the local people. “At the start our work was more focus on the social aspect. But about 15 years ago, we focused on trying to build communities so that they will be more independent commercially,” said Datu Vasco. “Of course, the government will still be there to help them with infrastructure, roads and things like that. But it was basically changing the mind-set of the people and the challenge was fantastic.” Datu Vasco said SALCRA is now developing more than 50,000 hectares of land scattered throughout Sarawak. Among the industries being promoted are oil palm, rubber, tea, cocoa and coffee.

Integrated Fish Cage Farming Under the NKEA In respect of the NKEA, SALCRA is appointed by the State Government of Sarawak to be the Lead and Implementing Agency for one of the Entry Point Project Four (EPP4) – Integrated Cage

Farming. This is carried out as Malaysia has the capability to tap into global demand for aquaculture products. There is a strong demand from United States especially, premium fillet segment and increasing demand from European Union countries and Middle East for tilapia fish. SALCRA is involved in the development of Batang Ai Dam Reservoir in Lubok Antu District of Sri Aman Division for Integrated Commercial Aquaculture Industrial Zone.

The increasing scarcity of natural forest agarwood makes plantation grown agarwood much sought after to meet global demand Batang Ai was chosen due to its huge surface area of 8,400 hectares with vast potential for ideal production of high quality fresh fish from its pristine environment. The project, expected to start in 2012 aims at producing five thousand metric tonne annually of high quality fish of red tilapia (Oreochromis sp) and genetically improved farm tilapia (GIFT). It shall be carried in an integrated manner; both vertical and horizontal involving the establishment of related infrastructure, hatchery, feed mills, grow-outs, processing, research and development, logistics and marketing. As such, it requires a huge amount of investment either from local or foreign sources to realize the whole project

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COMMODITIES through joint venture, partnership or collaborative arrangements. The project shall subscribe to international production standard such as Global GAP and other related certifications from importing countries The project also employs synergy farming approach, where small-scale fish farmers will be involved in the grow-out on a Buy-back Scheme. This approach is expected to create new commercial fish farmers among the local population and would generate steady flow of good incomes. Ultimately, the implementation of the project would help the Government to achieve its goals of high-income economy. The potential of agarwood industry is huge and only received attention by growers recently. Agarwood (Aquilaria sp) is considered the most expensive wood in the world. Agarwood is known by many names - Gaharu in Malay, oudh in Arabic, chen xiang in Chinese, or jinkoh in Japanese. It is valued in many cultures for its distinctive fragrance, and used extensively in incense and perfumes. Presently, agarwood resin, oil and even gaharu woodchip can be turned into pure oil, incense, tea, perfume, soap, lotion, cream, candle, shampoo and conditioner. The increasing scarcity of natural forest agarwood makes plantation grown agarwood much sought after to meet global demand. A report by Forestry Department, West Malaysia stated that in 2007, depending on grade, gaharu price ranges from RM3,000 to RM25,000 per kilogram. There is huge demand in the Middle East and in Asia for gaharu products. For example, Saudi Arabia is reported to import 500 metric ton costing USD667 million annually, and Singapore import 2,000 ton of gaharu from Indonesia annually. At local market, it is estimated that one-hectare gaharu farm with planting density of 800 trees can generate a gross revenue of RM1.2 million at a conserva-

tive price of RM1,500 per tree for a 7-year old tree. Due to the good market and potential return on investment, SALCRA shall embark on agarwood or gaharu plantation. As a prelude for an eventual target of 2,000 hectares plantation, SALCRA shall commence with a 40 hectare of planting in 2012. In addition to economic reasons, the gaharu project also serves as part of reforestation efforts and environmental management.

culture and nature of operation. Programmes such as internship and executive trainees were established to scout potential and to mould the required human capital. The Internship Programme, which cater for diploma and degree students studying at local colleges and universities attract no less than 50 students from various disciplines annually.

Human Capital Investment SALCRA acknowledge that sufficient competent human capital is critical to its success, expansion and survival. As such, it places investment in human capital very highly in its management agenda. Each year it allocates a minimal of RM0.6 million for human capital development and is expected to increase as its operations and activities expand.

SALCRA acknowledge that sufficient competent human capital is critical to its success, expansion and survival. As such, it places investment in human capital very highly in its management agenda Training and Development Programmes both functional and operational were designed to fit the organisation

The Executive Trainee Programme such as for plantation, management, engineering, and mill engineersâ&#x20AC;&#x2122; executive trainee attract an average of 15 â&#x20AC;&#x201C; 25 trainees annually. Successful trainees/ candidates were absorbed and recruited to hold various positions in the organisation. Due to the rising needs for comprehensive customised training and development programme, SALCRA shall establish its own Training and Resource Centre (TRC) at Bajo, Lundu District of Kuching Division in 2012. The TRC, which is expected to be ready by 2014 shall be equipped with the latest art of training and development facilities such as lecture theatre and room, audio-visual aids, internet and video conferencing. In addition, there will be 300-rooms hostel, chalets, resource rooms, canteen, administrative office, sports, and recreational facilities. Once completed, the TRC is capable of hosting conferences, seminars, convention or sports and recreational activities involving one thousand participants.

SALCRA SARAWAK LAND CONSOLIDATION AND REHABILITATION AUTHORITY

Wisma SALCRA, No. 1, Lot 2220, Block 26, MTLD, Jalan Dato Mohd. Musa, 94300 Kota Samarahan, P. O. Box 1981, 93740, Kuching, Sarawak, MALAYSIA Tel: +6082-616 177 / +6082-621 881 Fax: +6082-621 918 Email: salcra@tm.net.my www.salcra.gov.my

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TOURISM OVERVIEW

Sarawak tourism promotes unique attractions in bid to reach out to travellers With an environment and landscape tailor-made for eco-tourists and resort lovers, Sarawak is on a mission to take its tourism message beyond the region and attract travellers from around the world.

s a tourist destination, Sarawak has two faces. On one hand, it is a path well-trodden for tens of thousands of travellers from nearby countries and peninsula Malaysia who are familiar with its allures. Yet, at the same time, Malaysia’s biggest state is one of the global tourism’s best-kept secrets, especially in the eco-tourism and resort sectors. Sarawak is a vast area on the north east of Borneo Island and makes up roughly 37 per cent of the entire Malaysia Federation. It is a land rich in natural resources, untamed rain forests, cultural diversity, travellerfriendly resorts and hotels and, of course, home to the famous orangutan. It is one of two states, along with Sabah, that make up West Malaysia, with the Sultanate of Brunei wedged into the northern part of Sarawak. The Borneo part of Indonesia lies beneath. Sarawak’s tourism industry is both established and developing. A multitude of national parks, on land and on the sea, tribal villages, exotic wildlife and adventure tours have been luring visitors for years. However, the government is expanding tourism resources to add value for travellers as well as attract visitors from previously untapped markets such as the Middle East.

Government initiatives The state, led by Chief Minister Pehin Sri Abdul Taib Mahmud, is making efforts to drag Sarawak’s tourism sector out of its comfort zone. The government is encouraging big businesses to come together with their resources and expertise to promote Brand Sarawak under a common theme that will boost domestic and overseas tourism as well as encourage tourism-related investments from local and overseas interests. “It is imperative for all local tourism

players to create a strong common brand name for their tourism products in order to become respected global players in the tourism industry,” Taib said. In addition to the private sector, the Sarawak government is hoping that infrastructural developments can also increase tourism to the state. One example is the recently completed Bakun Dam, which generates 2,400 megawatts of power from the Balui River in central Sarawak.

"It is imperative for all local tourism players to create a strong common brand name for their tourism products in order to become respected global players" Assistant Minister of Tourism, Datuk Talib Zulpilip, said: “Whenever there is a big dam it will be good for the tourism industry and can benefit the local people, travel agents, transporters, restaurants and grocery shop operators.” He added that jobs and business opportunities will be created as more people visit Bakun, which boasts the world’s second-tallest concretefaced rock-fill dam. In terms of eco-tourism, Sarawak ticks all the boxes. Bako National Park, Damai Cultural Village, various orang-utan conservation projects, Matang Family Park, world-class scuba diving spots have drawn tour-

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ists in their thousands, particularly from Brunei, Singapore, peninsula Malaysia and other countries. Bako National Park is the most famous and oldest of Sarawak’s many protected reserves, where visitors soak in and marvel at the sheer abundance and diversity of wildlife and flora the rain forests have to offer.

Wildlife wonders The famed Proboscis Monkey and hornbill are among the many iconic species visitors can see while out jungle trekking, camping or hiking. The rare pangolin, flying lemur, mouse deer, slow loris, palm civet, long-tailed macaque, monitor lizard, kingfisher, sea eagle, warbler and Malaysian honeyguide can also be spotted in their natural environment. Mulu National Park is another stalwart attraction. A UNESCO World Heritage Site, the Park features the world’s largest cave chamber and cave system while, at dusk, millions of bats swarm out of the dark caverns in search of food. Other amazing reserves include Niah National Park (for paleolithic artefacts, 40,000-year-old cave paintings and bird nest harvesting), Kubah National Park (waterfalls and cool, clear waters in addition to jungle trails), Gunung Gading National Park (chance to see the world’s largest flower, the Rafflesia, plus waterfalls and trekking), Similajau National Park (bird-watching, sandy beaches for turtle spotting and dolphins playing in the blue sea), Lambir Hills National Park (more than 1,000 tree species, variety of plants and insects), Batang Ai National Park (Iban longhouses, hornbills, orang-utans and gibbons), Pulau Talang and Pulau Satang National Parks (island sanctuaries for green turtles to lay their eggs between May and October), Loagan Bunut National Park (huge natural lake and the specialised Selambau

TOURISM OVERVIEW fishing skills of the Berawan tribe) and Tanjung Datu National Park (mountain views and crystal clear coral reef waters). Sarawak is home to more than 30 different indigenous tribes, apart from the majority Chinese, Iban and Malay who dominate the population. The Damai Cultural Village is a specially built tourist hub that captures the diversity of these tribes in a onestop cultural hotspot.

Cultural diversity Since the 19th Century, Sarawakian rulers have made it policy to protect the identities of the state’s indigenous tribes and the Cultural Village is a monument to this cause, featuring seven “houses” that highlight the lifestyles of Chinese, Malays, Iban, Melanau, Bidayuh, Orang Ulu and Penan. Tribes-people in their native dress go about their lives in full view of tourists, who can witness tribal dances, traditional weddings and even try out the weapon of the forest, the blowpipe. No trip to Sarawak would be complete without catching a glimpse of Borneo’s most famous resident, the orang-utan. One place to fulfil this quest is the Semengoh Wildlife Rehabilitation Centre, which is about 45 minutes south of the capital Kuching by vehicle. This is a sanctuary where animals that are orphaned, abandoned or victims of illegal trafficking are kept. Apart from orang-utans, the centre caters for sun bears, gibbons, hornbills and other species. Orang-utans can be seen at feeding times when visitors can offer food to the animals after receiving instructions from a park ranger. The Matang Wildlife Centre, within the Kubah National Park, is a 2,230-hectare area of lowland forest where animals, particularly orangutans, are rehabilitated before being released into the wild. Like in Semengoh, the animals have usually lost their mothers or have been domesticated by people as illegal pets. While eco-tourism projects such as the Matang Wildlife Centre continue to lure visitors, travellers to Sarawak are not restricted to jungle attractions. All the trappings of a resort life are also offered at a number of locations around the state. Whether it is a leisurely round of golf or diving with the denizens of the deep, Sarawak resorts can cater to a variety of needs.

Miri resort lifestyle Miri, in northern Sarawak near Brunei on its east, is the second-largest city in the state and is known as an oil city given the strong presence of Malaysia’s national oil and gas giant Petronas. However, the state government is also promoting Miri’s allure as a resort city in order to capitalise on the region’s rich natural resources, its coastal attractions and cultural diversity.

Orang-utans can be seen at feeding times when visitors can offer food to the animals after receiving instructions from a park ranger The government is hoping to launch a new agency, the Tourist Wholesale Department, in 2012 that would coordinate all tourism projects for the entire state of Sarawak with a special allocation of RM3 million to transform Miri into a resort city. "This is our way, but all this requires a major organisation so that it can become a guide to the cooks, restaurant workers, tourist guides, musicians, dancers and choreographers, and those who can take people to areas to

observe life in the longhouse," Chief Minister Taib was quoted as saying in the media in explaining the agency’s functions. The agency is to formulate guidelines for the tourism industry and provide training to those keen to gain a foothold in the potentially lucrative sector. SMEs stand to benefit from the initiative while foreign investors can make most of the opportunity to profit from Miri’s (and Sarawak’s) potential as a regional tourism hub. A number of resorts in Miri are already thriving and more are expected to sprout as tourist numbers grow.

Dive delights Two of the best golf clubs in Sarawak, Eastwood Valley Golf Resort and Miri Golf Club, attract golfers from all over the region and a plethora of dive resorts make it a haven for underwater adventurers. The Miri-Sibuti Reef Marine Park is blessed with an abundance of patch reefs and wrecks featuring wonderful marine life and clear waters that offer visibility of up to 30 metres. Eve’s Garden, Kenyalang Rig, Tukau Drop Off, Siwa Reefs, Anemone Garden, Grouper Patch, Atago Maru Wreck, Batu Belais Reef and Santak Point are among the popular dive sites where turtles, sharks and a host of reef life can be seen from March to August every year. Sarawak’s tourism industry certainly has potential for growth. The attractions are ready-made and it is merely a case of government, private sector and investors working together to consolidate existing projects and embarking on fresh initiatives.

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Sarawak tourism chief wants ‘Middle East enclave’ inside rainforest Datuk Amar A. R. Zohari has a grand plan for tourists from the Gulf who prefer that homely feeling. He wants to build an Arab-themed mini-city just for them and he wants Middle East investors to put up the money. Datuk Amar A. R. Zohari | Ministry of Tourism and Heritage Sarawak

magine the following scene. Members of a Middle Eastern family are settling down for the evening in their spacious three-bedroom apartment. They are sitting down for a typical Middle Eastern dinner. Outside their purpose-built apartment complex, thousands of Middle Eastern folk throng the Arab restaurants, shops and malls of this mini-city while children scamper about in playgrounds. Everything about their environment suggests Middle East. However, there are no deserts and no sandstorms. Instead, the weather is tropical and their apartment building is surrounded by lush rainforest containing some of the most exotic creatures on the planet. They are in Sarawak. Or at least, the Sarawak of the future if the state’s ambitious tourism chief has his way. Y.B. Datuk Amar Abang Haji Abdul Rahman Zohari bin Tun Abang Haji Openg, Sarawak’s Minister In-charge of Tourism and Heritage, has a grand vision for attracting visitors from the Middle East to Malaysia’s largest state – build them a holiday enclave that makes them feel at home. Datuk Amar said tourists from the Middle East need more from Sarawak than nature treks and beaches. They want an integrated holiday experience and that is why Datuk Amar is appealing to Middle East investors to build a home away from home in Sarawak for their fellow GCC citizens.

Upgrading infrastructure “Currently, Sarawak lacks the infrastructure to cater for Middle East tourists, who have specific needs,” said Datuk Amar. “That is why I think we should build an enclave especially for Middle Eastern visitors. “And who better to develop this area than investors from the Middle East who know the market. If I had my way, I would bring Middle Eastern entrepre-

neurs to invest in Sarawak and build an enclave where every need of Gulf tourists is fulfilled. So, these visitors will not only enjoy doing the things they like to do during vacations but also get to see the natural beauty and environment of Sarawak.

We can have " enclaves for visitors from the Middle East, China and Western tourists, and they can interact with each other" Malaysia already enjoys strong tourism from the Middle East but the majority of visitors target Kuala Lumpur, for the shopping, or Langkawi, as a honeymoon destination. Datuk Amar said that the rainforests and Sarawak’s multicultural society and heritage will always be its strengths in terms of attracting tourists. However, Middle Eastern visitors need more. They prefer to travel in family groups and like to eat Middle Eastern food.

Action holidays In addition, he said, tourists from the Gulf countries are not used to chilling out at a resort or hotel. They want to shop or visit an amusement park. Datuk Amar said the resort province of Miri and greater Kuching area are ideal locations to build an enclave dedicated to Middle East visitors. “We are fortunate that Sarawak is big,” he said. “We can have enclaves for visitors from the Middle East, Chinese tourists and Western tourists,

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among others and these different market segments can interact with each other as well.” Datuk Amar said he knows what Middle East tourists want because of his efforts to reach out to Gulf visitors during an earlier stint as Sarawak’s tourism chief in the early 2000s. He travelled to countries such as UAE, Bahrain and Qatar to promote Sarawak as an eco-tourism destination. “I tried my best to attract Middle East tourists when I was looking after tourism before,” he said. “I told them this is a good place for you and your children to learn about the environment. “But once they get here, they find they have nothing to do, the children are bored and they leave after one day. An Australian tourist can stay for one week just relaxing and reading books but a Middle East tourist cannot.”

Call to investors In a message to potential investors from the Middle East, Datuk Amar urged entrepreneurs to consider the possibilities in the Land of the Hornbills. “What we need is the infrastructure and we want Middle East investors to help us build it,” he said. “Our advantage is that we have a tropical climate throughout the year. We have rain, sunshine and beautiful beaches. And food is not a problem because it is halal.” Datuk Amar said the major infrastructural requirement for Middle Eastern tourists is apartment complexes that accommodate big families. Sarawak has always been a wellknown tourist destination for travellers keen to expand their environmental horizons. However, the Middle East market has been difficult to crack. However, with Datuk Amar’s unique plan to create a designer city especially for Arab tourists, Sarawak may have found a way to unlock what could be a lucrative and elusive tourism market.

TOURISM

Sarawak offers convention paradise for global conference organisers The ambitious Sarawak Convention Bureau is making the most of the state’s world-class meeting halls and hotels, which are nestled strategically among lush rainforest and exotic wildlife, to promote the state as Asia’s next major hub for conferences and exhibitions. Mrs Jill Henry | Chief Executive Officer | Sarawak Convention Bureau

t has been described as “a beautiful lady who doesn’t need make-up” and “Jurassic Park without the scary dinosaurs”. Indeed, the rustic and raw beauty of Sarawak and its capital Kuching exude plenty of positive prose. Simplified into a business perspective, this translates into an ideal destination for international conferences. Mrs Jill Henry, Chief Executive Officer of the non-profit Sarawak Coonvention Bureau (SCB), said Sarawak’s rainforests and modern facilities can offer a stunning backdrop for conference organisers, including those from the Middle East, wishing to give delegates a unique meeting experience. “I think they would be amazed and inspired by taking up the challenge of going to a new and emerging destination such as Sarawak,” said Mrs Henry, who can claim patent rights to the Jurassic Park comparison. “The experience of will be the one that they will remember for always.” The SCB was established in 2006 by the Sarawak government to promote Malaysia’s largest state as a conference and seminar hub. The body also provides a range of assistance to organisers wanting to stage conventions in Sarawak, from finding suitable venues to marketing the event.

Australian expertise The appointment of Australian Mrs Henry as SCB CEO was crucial to the success of the bureau. She was persuaded away from her long-standing role as head of the Perth Convention Bureau to start the SCB from scratch. From an initial staff of eight, the SCB has grown to an 18-strong operation that has helped to bid and win the rights to host more than 155 events in Sarawak in only five years. “It started off much slower than I expected but now we’ve reached the point where we’re gaining momentum,” said Mrs Henry. “They’re all brand new events that would not have come here

otherwise, and there’s a story behind each and every one of them. “The challenge is not only in finding international organisations – they’re very keen to come here. It’s also finding credible, competent, keen and dedicated Malaysian hosts.” As an overseeing body, Mrs Henry said the SCB deliberately works behind the scenes and allows event organisers to bask in the spotlight. However, there is no denying its crucial role in convincing international organisations to take their meetings, delegates and potential spending to Sarawak.

"The farther you go away from Sarawak, the easier it is to sell" A prized catch for Sarawak is the 2013 International Hydro Power Association Congress (IHAC) – a major victory for the SCB and partners Sarawak Energy Berhad and the Malaysian Convention & Exhibition Bureau. It is the first time the Congress will be held in the greater Asia Pacific region and will attract about 600 delegates who are expected to spend more than RM2 million over three days in Sarawak. “That’s a great one to win because of the Sarawak Corridor of Renewable Energy (SCORE) programme,” she said. SCB is also keen to promote the state’s flagship facility, the Borneo Convention Centre Kuching (BCCK), which is where IHAC will be held. BCCK’s design is inspired by the rainforest with its roof shaped as a ‘Ririk’ leaf, an indigenous plant synonymous with the lives of local tribal cultures. The leaf is used as a natural wrapping for preserving and servicing local delicacies. It's shape is perfect for rain water catchment. The rain that falls on the BCCK roof is collected in the leaf's central stem and cascades as a water-

fall at each end where it can be used to irrigate the Centre's gardens thereby holding true to its environmental symbolism. The amazing part is that the idea for the Ririk leaf came from the architect firm’s tea lady, who overheard the professionals as they discussed a design that would represent Sarawak culture. However, as Mrs Henry said, the BCCK offers functionality as well as aesthetics. The building can accommodate events for up to 5,000 people, with a Great Hall occupying 2,793 square metres that can be divided into four smaller halls. There are 14 additional meeting rooms with plenty of registration and foyer space.

Flexible venues Car park space for more than 600 vehicles, a business centre, restaurant, VIP suites, broadcasting and media facilities, boardroom, prayer room, medical room, wireless internet capability and host of other facilities make BCCK a truly world-class venue. “The Centre is going to stand out in your mind from any centre anywhere in the world,” said Mrs Henry, who stressed that while promoting BCCK, the SCB would nevertheless guide organisers to a venue that is best suited to their needs. “Our goal is to promote the state,” she said. “So oil and gas conferences will not be held in the same place as an oil palm event. Our people also want technical tours. We also take them to see the environment and wildlife, such as the orang-utans.” With Sarawak’s global profile on the rise, Mrs Henry is confident the state, with its unique attractions, will become more of a magnet for major conferences and exhibitions in the future. Mrs Henry said: “It’s very raw and authentic. It’s not been dressed up or packaged. It’s like the description of a beautiful lady who doesn’t need makeup … or Jurassic Park without the scary dinosaurs.” INSIDE SARAWAK 2011 67

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Hospitality A round-up of some of the finest hotels, resort and serviced residences in Sarawak.

Merdeka Palace Hotel & Suites

Kushairi Bin Haji Zaidel Chairman Gagasan Abadi Properties Sdn Bhd (Merdeka Palace Hotel & Suite)

he Merdeka Palace Hotel & Suites has been in operation in Kuching, Sarawak for the past 13 years and has built up a strong reputation as a unique and revered property. Mr Kushairi Bin

Haji Zaidel, Chairman of Gegasan Abadi Properties Sdn Bhd, which owns the Merdeka, said the hotel faces the ceremonial Padang Merdeka, where Sarawak celebrated its Independence Day in 1963. “It is a historical landmark, which gives guests privileged access to some of Kuching’s historical jewels, such as the Sarawak Museum, which is the oldest in Borneo, and fronting the Padang Merdeka,” he said. “It is steeped in history, as a series of significant events have taken place in this hotel in the pre-independence era, making them cherished memories in the minds and hearts of the locals.” The elegantly designed hotel has a traditional décor with a contemporary edge, and houses nearly

213 standard, superior and deluxe rooms, including 2- and 3-bedroom apartment suites equipped with dining room and kitchenette. The hotel boasts Aurora Court, the all-day dining restaurant; Ristorante Beccari, the award-winning Italian restaurant; Victoria Arms; the charming English pub and La Habana Cigar Divan. “My goal is to make the Merdeka one of the best hotels in Malaysia,” said Mr Kushairi. “Though we are a small private boutique hotel, we believe in consistent development and application of traditional service, care philosophy and brand strategies to achieve targets. “We must build and maintain a world-class service culture to achieve a competitive edge.”

Pullman ready to muscle into the Kuching market

Mr. Eric Tan General Manager Pullman Hotel Kuching

he Pullman is an established brand globally and the group is now attempting to carve out a niche in Malaysia, with the Pullman Kuching Hotel in Sarawak already securing a healthy share of the market since opening two years ago. The hotel, located on top of the hill at Jalan Mathies and offering

spectacular views of the city, has 389 rooms equipped with cable and wi-fi internet, coffee house, Chinese restaurant, café, two bars and large banquet facilities catering up to a maximum of 1,500 people, pool, gym and spa. The hotel’s General Manager Eric Tan said business travellers make up 60 per cent of business with occupancy rate at about 60 per cent. He hopes to attract more business customers by promoting the hotel’s conference and meeting facilities while targeting leisure travellers who are visiting nearby regions. “A budget had been allocated for advertising and promotional activities locally and internationally,” he said. “We are also working very closely with the tourism board and Sarawak Convention Bureau on joint promotions, trade fairs and hosting familiarisation

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trips for both potential business and leisure business partners for product awareness.” Pullman Kuching is part of the Accor Hotels Group that boasts famous upscale property brands around the world. Mr Tan says he is confident that Pullman Kuching can become one of the top hotels in Kuching and attract high net-worth clients either on business or vacation. “Although the hotel is only in its second year of operations, we have managed to gain a fair market share in the area to date,” he said. “We have even managed to secure some big events until 2014. “One of the reasons is basically the facilities provided, personalised services as well as location, which is the top selling point of the hotel.”

TOURISM

Grand Margherita Hotel enjoys rich history in Sarawak

he Grand Margherita Hotel is the reincarnation of the Holiday Inn Kuching, which was one of the first major brand-name hotels to open in the Sarawakian capital more than three decades ago. It was re-branded in 2009 and took its current name from the famous Fort Margherita that is across the river from the hotel. General Manager, Arthur Yeap, said the hotel management is now keen to re-establish the property in Kuching after the renovation & re-branding exercise. “The brand itself has a very strong history, being the first international chain hotel in Kuching,” he said. “But when the brand changed, the perception changed. So what we’re doing now is building up the brand and getting people to come back again and show them that it’s the same hotel, if not even better because the product has been refreshed.”

The Grand Margherita has 288 rooms equipped with free in-room high speed internet access, Rajang lobby lounge, Orchid Garden Coffee House, Meisan Restaurant and multiple meeting facilities. It is located in the heart of the Central Business District in Kuching and is the only riverfront hotel in Kuching, offering scenic views. Executive Club floor rooms are available for business & leisure travellers, who can enjoy free wireless internet and access to the Executive Club lounge facility. The hotel is a popular choice for meetings by government, business and other organisations in Sarawak. Mr Yeap said Middle Eastern tourists are welcome in Sarawak. “Middle Eastern tourists form a very important growth area for tourism,” he said. “Kuching could be part of that if there’s more exposure to the Middle East.

Arthur Yeap Tong Guan General Manager Grand Margherita Hotel & Riverside Majestic Hotel “It will be great if we can think about how we can bring Arab tourists over here. It’s a good market and length of stay is four to five nights, if not a week. That also means spending is good too. “This is certainly an area that could be developed more. If the impetus is there, it’ll benefit hotels here and tourism as a whole in Sarawak

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HUMAN CAPITAL & QUALITY OF LIFE

Swinburne’s Sarawak campus enjoys best of both worlds The Sarawak campus of Australia’s Swinburne University of Technology is providing genuine Australian-accredited tertiary education to 4,000 students, 20 per cent of them from outside Malaysia. Professor Helmut Lueckenhausen Pro Vice-Chancellor & Chief Executive | Swinburne University of Technology Sarawak Campus

winburne University is keen to portray itself as a world-class educational institute that represents two worlds – Australia and Malaysia. This strategy, says Professor Helmut Lueckenhausen, Pro Vice-Chancellor & Chief Executive of Swinburne University of Technology Sarawak Campus, is what attracts Malaysian and international students to Kuching to further their studies. He said Swinburne Sarawak gives Malaysians, in particular, the opportunity to pursue an Australian-accredited qualification at one-third of the cost of having to travel Down Under. “We feel, in one sense, we brand ourselves with an otherness,” said Professor Lueckenhausen. “Because that’s what local students want. They don’t want another Malaysian university. They want to know that they get an international degree, an Australian degree. “And our programme is absolutely that. But on the other hand, we need government and the community here to accept us as being embedded here, regionally and nationally. We need to put down some Malaysian roots while retaining our Australian-ness.” In partnership with the state government, Swinburne’s Sarawak campus was opened in Kuching in 2000 as an international branch of its Melbourne-based Australian parent.

Self-accredited The student population is almost 4,000 and is expected to peak at about 5,000 by 2013. About 20 per cent of the students are international, from Bangladesh, Brunei, China, India, Indonesia, Iran, Iraq, Myanmar, Saudi Arabia, Sri Lanka and Vietnam, among others. Swinburne’s Australian identity is manifested most conspicuously by its courses, which are distinctly Austral-

ian and accredited by the university itself. The majority of tertiary institutes in Malaysia are accredited by the government-linked Malaysian Qualifications Agency. “We are successfully promulgated as a self-accredited university, which was something quite new in this country,” said Professor Lueckenhausen. “The concept was so new, that not everyone knew what it meant.” He said Swinburne in Melbourne has total control over the Sarawak campus’s courses. Swinburne Sarawak is now one of eight self-accrediting universities in Malaysia and is Category 5 in the national rankings, which means it is among the elite educational institutes in the country.

We need to put " down some Malaysian roots while retaining our Australian-ness" Swinburne Sarawak offers courses in commerce & business, design, engineering and ICT. Post-graduate options include management, engineering and science with coursework and research. The university is expected to play an important part in producing qualified talent to fill the thousands of jobs that are likely to come on line in tandem with the Sarawak Corridor of Renewable Energy (SCORE) economic programme.

Student revenue Swinburne Sarawak is 25 per cent owned by the parent institution in Melbourne but depends on revenue from

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students to fund its programmes. “We are a self-funding university in terms of how our operating budget comes from student fees,” said Professor Lueckenhausen, who said Swinburne Sarawak invested RM110 million on upgrading its 16.5-acre campus in Jalan Simpang Tiga, Kuching in 2006. “Various arrangements have been developed within the country recently to give the private sector access to research funding and things like that but these have not had much time to us. So we are kind of resource poor and don’t have the capacity that government universities do. On the other hand, that makes us very efficient.” With Melbourne a 25 per cent shareholder the remaining 75 per cent is owned by the Sarawak government through two education foundations. Extensions to the campus were completed in 2008 with the addition of eight new buildings –the Chancellery, Business, IT and Science Block, a Lecture Theatre, Engineering Block, Male and Female Hostels, a multi-purpose hall and a multi-storey car park. The upgraded facilities gave Swinburne Sarawak 37 tutorial rooms and 83 laboratories, 34 of them for engineering, 10 for research, 24 for computer studies and 15 for science. Before that, there were only four buildings comprising the Language & Foundation Block, the Cafeteria, and Lecture Annexes 1 and 2. In a boost to the universit y’s Sarawak branch, Swinburne Melbourne was recently named as one of the world’s top 500 research universities for the third year in a row by the Academic Ranking of World Universities (ARWU) organisation. The ARWU also ranked Swinburne in the top 100 research universities in the world in the field of physics. Swinburne Sarawak offers almost identical courses as its parent university in Melbourne.

HUMAN CAPITAL & QUALITY OF LIFE

Curtin Sarawak eager to boost its presence in the region with world-class courses Curtin Sarawak is the first international branch campus of Curtin University in Perth, Western Australia. It offers genuine Australian-accredited courses and has a student population of over 3,000. Professor Ian Kerr | Pro Vice-Chancellor and Chief Executive | Curtin Sarawak

u r t i n U n i ve r s i t y, S a r a w a k Malaysia is one of eight selfaccredited universities in the state and enjoys the highest-ranked category 5 status for the quality of its education. The Miri-based University offers dozens of undergraduate and postgraduate courses including commerce, engineering, computer studies, science and other fields related to industries in Sarawak, such as petroleum engineering and process plant technology. The courses are all in line with the academic standards set by the institution’s parent university in Perth, Australia, said Curtin Sarawak’s Pro Vice-Chancellor and Chief Executive, Professor Ian Kerr. “Students can choose from an extensive range of undergraduate and postgraduate courses and customise them to suit their needs,” said Professor Kerr. “They can also gain valuable work experience interacting with local and international industry professionals, learn from lecturers with real industry experience, and indulge in a unique international and crosscultural learning environment studying with students from more than 40 countries.” Among the international students studying at Cur tin Sarawak, many are from the Middle East, including Oman, Yemen, Saudi Arabia and Iran. The University is keen to attract more students from GCC countries as well as from Africa, Central Asia and the Indian sub-continent.

Flexible courses With Sarawak on course to expand its economy and promote a range of industries to support already-established sectors such as timber, oil and gas and minerals, Curtin Sarawak tailors its courses to suit local needs. “In today's highly competitive

working environment, graduates need every advantage they can get to advance and improve their marketability,” said Professor Kerr. “Many of our graduates have established themselves as major contributors to industry and community in Malaysia and internationally.” Curtin Sarawak has the advantage of being recognised as a quality academic institute by companies in the region and around the world. Professor Kerr said students are attracted to Curtin because of its willingness to match graduates with suitable employers through a placement service.

Many of our grad" uates have established themselves as major contributors to industry and community in Malaysia and internationally" “We are approached for suitable candidates by many leading companies,” he said. “Recognition of our courses by the Malaysian Public Services Department further ensures employment opportunities for graduates in the government sector.” Curtin Sarawak provides students a vibrant campus lifestyle with a mix of academic support services and social events. Facilities include The Learning Centre, Library, computing facilities, counselling service, choice of food and beverage outlets, health ser vices, public transpor t, banking facilities, shops, secure student

housing, as well as a modern multipurpose health, recreation and events centre. Cur tin Sarawak opened in 1999 after Curtin University was invited by the Sarawak state government to set up an international branch in Miri.

Affordable fees The decision to choose Miri instead of the state capital of Kuching was based on the resort city’s growth potential and the need for a world-class tertiary institute in the region. One of the key advantages for students is that they can pursue a genuine Australian degree without having to pay Australian fees. With the courses exactly the same as its parent university, many students transfer to Perth for their final year of study. With students and staff from over 40 countries, Curtin Sarawak offers a unique international and crosscultural experience and is committed to multi-cultural and international engagement in all its activities. This cultural diversity adds a rich and valuable dimension to our campus atmosphere and also prepares our graduates to live and work in an increasingly global environment. Curtin Sarawak maintains a close relationship with the state government and offers postgraduate courses for state civil servants. Said Professor Kerr: “Our relationship with both the federal and state governments is very important, as evidenced by Curtin Sarawak being granted self-accreditation status, and Curtin Sarawak’s working closely with the Sarawak State Government to introduce relevant postgraduate courses for state government officials and playing a role in the transformation of the state civil service into a world class-civil service and to meet the professional and technical requirements of SCORE.” INSIDE SARAWAK 2011 71

“We will invest $1.6 Billion in Sarawak starting from 2011”

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