2020 Advanced Economy. The Way Forward.
Datuk Haji Hashim Paijan Mr. Thomas Wong Mr. Patrick Tan Contributors Ministry of Industrial Development (MID) Department of Industrial Development and Research. (DIDR) Kota Kinabalu Industrial Park (K.K.I.P.) Sdn. Bhd. POIC Sabah Sdn. Bhd. Sabah Economic Development Corporation. (SEDCO) Sipitang Oil & Gas Development Corporation (SOGDC) Sandakan Bulkers Sdn. Bhd. Team of Sabahtoday
Published by Ministry of Industrial Development Tingkat 9, 10, 11, Blok C, Wisma Tun Fuad Stephens, Karamunsing, Beg Berkunci No.2037, 88622 Kota Kinabalu, Sabah, Malaysia. Design and Artwork by Sync Max Sdn. Bhd. Lot 5, Block B, 2nd Floor, Wisma CTF, Damai Plaza, Phase 3, Jalan Damai, 88300 Kota Kinabalu, Sabah. www.sabahtoday.my Printed by JC Printer Sdn. Bhd KDN PQ1780/K/38 (048467) No. 15, Lorong Dewan, 88000 Kota Kinabalu, Sabah. Tel: 088-230649 Fax: 088-235806 jc.printer@yahoo.com
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IQ in this issue highlights the economic growth of Sabah 2011-2015 and where Sabah will stand with other States in 2020. Sabah needs to know what to do in order to join the national ranks of a high income State in 5 years time. The 11th Malaysia Plan (11MP) 2016-2020 is the plan that will rally us towards Vision 2020, a vision of growth that is anchored on the prosperity and well-being of its people. There is a short introduction of 11MP and follow with the Sabah Challenge, an industrial development perspective. SIQ also highlights the roles of POIC, KKIP, SEDCO and SOGIP in our Cover Story. A special “chessboard” cover is produced to show the economic activities in the State from GO-> towards 2020. However, our Vision is not a game and nothing is depending on chances. Readers should not miss out on Everything bio: New frontier of Sabah’s economy. The Manufacturing sector, being one that adds value to the economy, has a major role to play in helping Sabah achieve high-income status. More so that Sabah has the advantage of being endowed with many natural resources. Past industrial plans for the State, specifically the Sabah Industrial Action Plan (SIAP) 2000-2005, puts emphasis on the need to promote development of downstream resource-based industries, including palm oil, cocoa, timber, fishery, dairy, nonmetallic minerals and gas. Various strategies and action plans were recommended
covering policy, thrusts, incentives, infrastructure support, etc. Industrial clusters like POIC and SOGIP are the result of recommendations from SIAP. Yet the State’s manufacturing sector only contributes 8.6% of the State’s GDP (2014). The Ministry of Industrial Development will undertake to review SIAP with all relevant government departments and agencies as well as the private sector. A concerted effort by all stakeholders to draw up an action oriented plan for Sabah, moving forward and we have to play our roles to achieve its objectives. SIQ continues to cover business events and investments in Sabah and provides Facts and Figures. SIQ also includes the Federal Government Budget 2016 available at the time of printing. Special thanks to all the contributors of materials, pictures and articles in this issue. Best wishes for 2016. Raymond Tan Dec 16, 2015
CONTENT 15 COVER STORY 11th Malaysia Plan 2016-2020
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Facts & Figures + Federal Budget 2016
25 NIPPON PAINT Sabah relocates to KKIP
17 The Sabah Challenge -An industrial development perspective
Biomass: Soong on the move
Key Achievements under 10MP and Development plan for next 5 years
Everything bio: New frontier of Sabah’s economy
PERSPECTIVE & VISION
BEYOND 2015
ENG PENG Group -A success story
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21 THE WAY FORWARD (2016-2020)
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Palm Oil Industry has RM200 billion potential economic value
23 POIC: Pushing Sabah’s palm oil agenda through art
29 DKSH: New distribution center in East Malaysia
30 COURTESY CALL
The 11th Malaysia Plan 2016-2020
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he Eleventh Malaysia Plan (11MP) 2016-2020 was tabled by our Prime Minister in Parliament on the 21st May 2015. With the theme “Anchoring Growth On People”, the plan strives to inspire and rally all Malaysians towards Vision 2020, reflecting the promise of the government in fulfilling the aspiration of the people. In short, the plan reaffirms the government’s commitment to realize a vision of growth that is anchored on the prosperity and well-being of its people. The 11MP will focus on the people as the centerpiece of all development efforts. All planned development projects will focus on rapidly delivering high impact on both the capital and people economies at low cost to the government. The capital economy is about Gross Domestic Product (GDP) growth, big businesses, large
investment projects, and financial markets, while the people economy is concerned with what matters most to the people, which includes jobs, small businesses, the cost of living, family well being, and social inclusion. The national target of US$15,000 GNI per capita is based on the minimum threshold for qualifying as a high income economy. For the past five decades, Malaysia has achieved a stable real GDP growth of 6.2% per annum and its national per capita income has expanded more than 25-fold from US$402 (1970) to US$10,796 (2014). Other successful stories include achievement in poverty eradication, household income, home ownership, accessibility to clean water and electricity, high life expectancy, literacy and competitiveness. In order to strengthen
The Six Strategic Thrusts
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macroeconomic resilience for sustained growth, the government will embark on the following strategies:• Unlocking productivity potential to ensure sustainable and inclusive growth; • Promoting investment to spearhead economic growth; • Increasing exports to improve trade balance; and • Enhancing fiscal flexibility to ensure sustainable fiscal position; The 11MP has defined 6 strategic thrusts and identified 6 game changers that will transform ideas into reality and address the goals set out in Vision 2020. Malaysia will thus, be catapulted towards the end state of being an advanced economy and inclusive nation.
The Six Game Changers
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y the year 2020, it was projected by the Economic Planning Unit that many of the States were unable to attain the US$15,000 (RM 50, 000) minimun threshold as benchmark of a high
-income economy, as reflected in Table 2. As a country, Malaysia is expected to achieve the status of a developed high-income nation by 2020, with a GNI per capita of RM 54, 100 (US$15,690).
The 11MP strives for a future that is built on sound macroeconomic policy and inclusiveness to ensure that no Malaysian is left behind when Malaysia attains its advanced economy and inclusive nation status.
Table 1 Gross Domestic Product (GDP) By State, 2011-2020
Table 2 Per Capita GDP By State, 2011-2020
Source: 11MP
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The Sabah Challenge -An industrial development perspective By Raymond Tan
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mong the many functions of the Sabah State government and Minister of Industrial Development (MID) in particular is to propel the State towards a high income and industrialised economy. The rationale is as follows: No agriculture economy in the world falls within the ‘developed’ status. By contrast, the richest countries in the world in terms of GDP per capita are all industry- or service-driven. In Sabah in 2014, manufacturing (a term used interchangeably with ‘industry’) made up just 8.6 per cent of the GDP. Services (boosted by tourism-related sectors like hotels) topped at 40.9%, followed by agriculture (25.3, including plantation) and mining/quarrying (21.8, including oil & gas). The services sector contributed to 49.3% of the Malaysian economy in 2010, and is forecasted to grow to 61% by the end of 2015. In 2013, an average Sabahan (GDP in per capita term) earned RM19,155 that left Sabah 12th in a list of 15 states and territories. Sarawak was third at RM42,532 and the national average was RM32,984. With less than US$5,000 in annual income based on current (Nov 2015) exchange rate, Sabah is a low-income state. It looks even more glaring when considering our neighbours Singapore’s 2014 GDP capita of US$38,087 and Brunei at US$25,140. As a whole, Malaysia’s
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GDP per capita was US$7,304 in 2014. It hopes to achieve, through a series of economic transformation programmes unveiled in 2010, US$15,000 by 2020 based on a yearly GDP growth rate of 5%. Arithmetically – Sabah will be able to join the national ranks of high-income in five years’ time if the economy grows by 19% per year. To do that, it would need to have GDP-boosters in the form of massive inflow of foreign direct investments. And none of the sectors that contributed to the GDP in 2014 could by themselves possibly achieve the level of growth needed. Based on a population of 3.3 million (2010 figure), Sabah’s GDP will have to reach almost USD50 billion for GDP per capita of USD15,000. Sabah’s GDP totalled RM66 billion in 2014. Realistically – based on historical growth patterns of about 5-6% per annum, Sabah’s GDP will reach USD50 billion well beyond 2020 not taking into consideration the prior population change. It is clear that Sabah needs to rationalise its 2020 income target or move the target to a later date, say 2025, when the Sabah Development Corridor Blueprint draws to a close. Therefore, during the following 10 years, Sabah will have to devise a pathway to achieving USD10,000 per capita income, and longer to reach USD15,000. There are only four sectors in the economy which, when aggressively developed through valueadding (read: industrialisation/
manufacturing) by way of equally aggressive wooing of FDIs, that can make for the numbers required. The four sectors are tourism, SMEs, oil palm and oil & gas. Except for tourism which falls under services, the growth of the other three sectors will be dependent upon for the quantum leap in industry/ manufacturing to push the 8.6% mentioned above to 2535%. Let’s focus on oil palm and oil & gas which combined has contributed the most to the state revenue over recent years. Sabah has about 6 million tons of crude palm oil, 20 million tons of mobilisable oil palm biomass and about 90 million cubic metres of natural gas that Petronas has declared as ‘available’ for processing. What can we do with crude palm oil? Sabah’s oil palm industry remains at a low value adding processing stage. Products exported include palm olein, palm sterin, crude palm kernel oil, olein and stearin from palm kernel oil. Potentials are found in downstream processing of CPO to produce food (shortening, margarine, ice cream specialty fats, noodles, coffee creamer, etc), phytonutrients (carotenes, tocols, co-enzyme Q, squalene, phytostrols, lecithin) and oleo-chemical products (biodiesel, personal care products, cosmetics, plastics, soap, protective coatings, degreasing compound, etc). In the history of Sabah’s attempt at industrialisation, it has recorded failures in
deepening the timber and cocoa sectors which were one-time major revenue earners for the state. At a juncture when the state is playing catch-up with the national expectations in GDP per capita growth, success in creating a valueadding downstream industry leveraging on palm oil is a must. The Malaysian Biotechnology Corporation predicts that Sabah’s CPO output has a potential of M97.5 billion in economic value if it is used for downstream industries. Biomass – Agensi Inovasi Malaysia (author of Malaysia’s National Biomass Strategy), estimated that Sabah possesses some 30 million tons of oil palm biomass with an
estimated economic value of RM102 billion if industrialised. The largest potentials lie in the setting up of bio refineries to produce high-value chemicals. CONCLUSION: Sabah will have a realistic chance of transforming its economy and realising the USD15,000 GDP per capita goal by way of, say, raising industry’s share of GDP by 1% per year up to 2035. Of which translates into RM2 billion in FDI in-flow per year. Only the oil palm and oil & gas sectors possess such potentials. To date, 10 Malaysian and foreign companies have been in various stages of negotiations with Sabah for the establishment of various oil palm and biomass-related
industries worth over RM6 billion. In addition, five foreign companies have expressed intention to invest RM4.2 billion in bio refineries using biomass. To realise the total RM10 billion FDI potentials mentioned above, industrial parks like POIC in Sandakan and Lahad Datu need to have rapid development in particular, port infrastructures to become the main industrial players in the region. Operationally this means the need for sufficient basic and specialised infrastructure to be built, right policy and incentives provided and other investment friendly prerequisite to be put in place, such as sufficient skilled labour, training institutions, rapid licensing and development plan approval process as well as strong security. A deficiency in any of these conditions will be a disincentive or impossibility to set up factories or operations. (A schematic link of institutions, factor conditions and goals are presented). Business as usual will not result in any transformation in the Sabah economy. Organic growth will not help Sabah achieve its development goals. Sabah needs to identify the catalysts for the pace of economic growth required to keep up with the national trajectory. The 11th Malaysia Plan (RMK11, 2016-2020) is the final leg of the 2020 goals for Malaysia as a whole. But Sabah needs to look at its position realistically and define what is needed in order for it not to fall short in its tracks. A Sabah-centric set of growth objectives, budget and infrastructural development are required.
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Key Achievements under 10MP and Development plan for next five years
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OIC has secure a total investment value of about RM 1.55 billion (as of August 2015) from 22 companies under the Tenth Malaysia Plan (2011-2015). The 1,150 acres of industrial land in Phase 1 and 2 have been fully developed with full range of infrastructures and support facilities such as roads, drainage, water, sewerage, telecommunication, electricity supply systems, liquid and dry bulk jetties, pipe racks, and interchange. The dry bulk and liquid jetties are fully operational since March and May 2013 respectively. POIC has also commenced the development of Phase 3 covering another 3,300 acres. The associated infrastructures including roads, drainage, sewerage, water, electricity and telecommunication systems have been fully completed under the Phase 3A development. A Container Terminal with a design capacity of 50,000 TEUs per annum is also under construction in Phase 3A, which is expected to be ready by 2017. In terms of investment flows, POIC Lahad Datu has attracted large Multi-
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By Clarence Binayu Assistant Manager, Research, POIC Sabah Sdn Bhd
National (MNCs) and Malaysian companies during the 10MP. This includes the establishment of the largest fertilizer and refinery clusters in Malaysia as well as the world’s largest integrated palm bio-refinery complex. In line with the strategic thrusts of the Malaysia National Development Strategy (MyNDS), three major POIC Lahad Datu projects will be implemented over the next five years. MyNDS was formulated parallel to the launch of the 11th Malaysian Plan (11MP) in May 2015 and will be a key basis to planning and preparation of programs and projects under 11MP. It stresses on optimal usage of limited resources, focuses on high-impact projects at low cost including efficient yet rapid implementation, making Budget 2016 the start to the final five years of Malaysia’s progress to a high-income advanced economy by 2020. Bio-Based Hub. This is a top priority project as it is strategically align with POIC’s core objective, which is to attract greater investments in higher valueadding and technology
intensive industries, namely in the palm oil based downstream industries. The project is pertinent given the abundant supply of palm oil based raw materials in Sabah and within the BIMPEAGA region, which could be further harnessed to drive the State economic growth and development. Halal Park. The halal sector would complement / strengthen the development of the bio-based industry in POIC Lahad Datu, particularly in the palmbased activities. Apart from this, the proposed halal park project could also support the development of the Small and Medium Enterprises (SMEs) in POIC Lahad Datu. POIC Lahad Datu’s strategic location right at the heart of the largely Muslim populated BIMP-EAGA region is also a strong impetus to further explore and harness the potential investment opportunities offered by the halal industry. Marine Logistics Facilities. Currently, there are no marine logistics facilities in the East Coast of Sabah. POIC Lahad Datu is also well-placed for such
facilities given its deep and sheltered port. As it stands, the Government is also pushing for the development of the Marine Transport Sub-Sector in line with the IMP3 (2006-2020). This project would also complement POIC Lahad Datu’s long-term objective of becoming the most important palm oil logistic hub in the region. POIC Lahad Datu is also looking to develop additional industrial clusters in response to the growing interests of investors beyond the immediate confines of the palm oil industry such as the logistics and transportation of bulk items. Other industries targeted for development are oil and gas, iron and steel, equipment and machineries, SMIs and downstream processing of marine products. Looking at this scenario, POIC Lahad Datu plays a very important role in Sabah’s development and industrialization with the ultimate goals of transforming the State agricultural-based economy into a high income economy. In this context, POIC aims to contribute towards the targeted 35% share of the industrial sector to Sabah’s Gross Domestic Product (GDP) under its 19 years development framework (2012-2030) as well as the targeted USD 15,000 GDP per capita income by 2020. Realizing such a goal within the stipulated timeframe would
clearly require an enormous amount of commitment in time and resources, political will and capacity and certainly cooperation between the public and private sectors. One of the key enablers toward this is the palm oil industry. Based on current technologies, investment and product market, the palm oil industry is projected to be worth about RM200 billion. Presently, bio-based investors in discussion with POIC is worth a total of RM10 billion investment. Some are very close to starting their investment in Sabah pending relevant government incentives and availability of certain specialized infrastructure such as steam and feedstock supply. The key to unlocking this potential is that government funds must now be channeled into the development of oil palm, especially the bio-based sector. Short of this Sabah will not achieve the USD 15,000 per capita nor reach developed economy status. Unavailability of funding under the 11MP for the bio-based hub project in POIC Lahad Datu would make it difficult for POIC to play its role in increasing the industrial share of GDP to 35% and to assist in achieving the USD 15,000 per capita income for the State. In this instance, Sabah may continue to lag far behind the other states in Malaysia in terms of socioeconomic performance
and achievement. The State will remain as a low income economy contender and may continue to be among the poorest states in Malaysia despite its rich natural resources. With lack of industrialization, employment opportunities for high skilled jobs in Sabah will also be limited. Job opportunities will be generally low skilled and therefore of lower salary grade. To sum up, government funding for the bio-based project in POIC Lahad Datu is very critical as it would contribute towards making POIC Lahad Datu a more effective development catalyst in transforming Sabah’s economic outlook and facilitating the realization of the State’s industrialization agenda.
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THE WAY FORWARD
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he 11th Malaysia Plan (11MP) as revealed by the Prime Minister during the Parliament Sitting in May this year, focuses on 6 strategic thrusts that will transform ideas into reality to propel Sabah and Malaysia towards a high income nation with an advanced economy and inclusive nation. The 11MP being the final stage towards VISION 2020 aims to deliver high impact on both GDP’S growth and increasing the GNI per capita. KKIP being the key component of the state government’s industrialisation drive to turn Sabah into a developed economy and a high income state was tasked to catalyse industries and stimulate economic initiatives to improve the living standards of the locals. Under the 11MP, KKIP shall be developed in tandem with the expansion of Sepangar Container Port which shall be equipped with the necessary facilities and infrastructure to support the international trade through value-
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(2016-2020)
added activities. Due to its proximity, KKIP shall play an important role in promoting the port as the main gateway for the distribution of products in the state. At the same time, KKIPSB shall take the opportunity to develop its logistics cluster to facilitate the business activities in KKIP, thus ensuring the transportation needs of the investors are met. As part of the 11MP, KKIP shall be collaborating with the State Government to develop the transhipment hub in KKIP which shall be equipped with transhipment facilities such as storage and warehouses to attract bigger investments. Essentially, this will create an industry which shall be based on import and export businesses powered by the availability of such facilities provided by the transhipment hub. The spill over effects from this industry shall be the creation of more employment for the locals and improved wellbeing arising from greater
prosperity and vibrant economic environment. As a free economic zone, KKIP will further focus on developing the automotive industry which shall include assembling motor parts, vehicles, centre for car maintenance and repair, aircraft maintenance, repair and overhaul and so on. This project shall translate innovation to wealth creation. Ultimately, KKIPSB is projected to develop an approximately 550 acres of industrial land which is anticipated to create about 12,500 employment for the locals. This development shall be spread over a period of 5 years and beyond and expected to attract an estimated investment of RM4 billion. To date, 4,005 acres of the land under the KKIP’s Master Plan has been gazetted for developments comprising of Industrial, Residential, Commercial, Institutions and others. During the 10th Malaysia Plan, the number of operating entities/factories had increased to 283. By the
same token, the total investment value was estimated at RM2.657 billion with 8,441 job created. Industrial land being the main component under the Master Plan was allocated 1,735 acres for development. The main industrial clusters which have been established are wood, food, metal and plastic. RBF 4 (DETACHED TYPE) Thus far, as of under the 11th Malaysian 2015, a total of 878 acres Plan. had been developed by Apart from industrial KKIPSB which include the cluster, KKIPSB also construction of several develops residential phases of Ready Built Factories (RBFs). The latest projects which were given project which is RBF 4 has an allocation of 719 acres of which 69 acres have been completed and been developed. To date, shall be handed over KKIPSB had completed 4 to the purchasers upon obtaining its OCs .The next residential projects which are V28 Seri Malawa phase which is RBF 5 is Apartment, V19 Taman expected to commence Salut Perdana Phase
3, V24 Stage 1 Terrace and Townhouse and V23 Apartmen Malawa Ria. In addition, under the 10th Malaysia Plan (2011-2015), KKIPSB had also succeeded in settling a total of 20 master titles to individual investors whilst another 28 applications are in the process of being approved.
V24 (TOWNHOUSE)
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PERSPECTIVE & VISION
SEDCO Group braces for yet another challenging period ahead. SEDCO’s CEO, Pengiran Saifuddin Pengiran Tahir, shares some in sight into the Group current performance and what to expect in the next five years. Also his take on certain aspects under 11th Malaysia Plan.
Q1: How do you see the overall performance of SEDCO over the last five years (2011-2015)? SEDCO Group got off to a strong start in the beginning of the 2011-2015 period charting a Group Turnover of RM840.1 million in 2011, an increase of 87.7% since the previous 5 years and was the highest ever achieved by the Group. SEDCO Group also registered a higher Pre-tax Profit of RM72.1 million for the year, more than double the Group Pre-tax Profit 5 years back. The Group performance has however dropped gradually since 2012 largely due to lesser property development projects available for sale. The following year continued to be challenging for the Group as market remained quiet during and after the 13th General Election (GE13). The Lahad Datu intrusion earlier in March 2013 had also impacted the Group performance. In 2014, the tourism industry in particular had been badly affected by the MH370 incident, MH17 tragedy and subsequent kidnapping incidents on the East Coast of Sabah as travel advisories on security issued by several countries dampened tourist arrivals. The recent earthquake in 9
Ranau has also caused numerous cancellations in the hotel industry. Despite the challenges, SEDCO Group has managed to maintain an average annual Group Turnover of over RM773.6 million and an average annual Group Pre-tax Profit of RM37.4 million from the year 2012 to 2014. With the weakening of Ringgit Malaysia against USD and the lingering domestic issue, the outlook for 2015 might not be promising. The exchange rate has escalated from an average rate of USD1:RM2.90 in 2011 to USD1:RM4.24 in September 2015. The weakening of Ringgit Malaysia has significantly affected the cost of production of SEDCO companies which are importing their raw materials in USD resulting in deflated margin and bottom line. In view of the current economic situation, the Group’s Turnover and Pre-tax Profit for the year 2015 are projected at RM777.2 million and RM34.7 million respectively. Q2: Presently, the expectation is for the State economic development agencies (SEDCs) in the country to become high performing entities that are self-sustainable, effective & competitive in line with the aspiration of the national
transformation initiative. How would SEDCO meet this challenge? In 2013, the Ministry of Finance through its appointed consulting firm conducted a study on the performance and effectiveness of SEDCs with the objectives of determining their future direction. In its draft report, three business model options have been put forward for consideration including corporatisation of SEDC. We need to be realistic in our approach to attain the desired ‘transformation’ of SEDC given our level of ‘maturity’, the intricacy of the existing structure and the limitation of our resources. Also, there is this founding objective of SEDC that we need to uphold i.e. to enhance the economic well being of the Bumiputera which is to date yet to reach the desired outcome. Therefore SEDCO, like most of our counterparts in other states, intends to remain with the existing set up as a State Statuary Body whereby we can continue to carry out both the developmental and income generation roles. With the present economic reality, the onus is on us to strive hard to achieve financial self-sufficiency that would enable us to implement and
maintain our commercial activities and at the same time fulfill our socioeconomic responsibilities. The on-going SEDCO Halatuju revision presents an opportunity for us to redefine our objectives and roles to make it more focus and capabilitydriven. Equally crucial now is to rationalize our investment portfolios so as to achieve effective and efficient utilization of our resources. Work system and procedures, leadership, human capital development and salary structure are amongst areas that we also need to look into for enhancement. Q3: What can be expected in the next five years in terms of new projects or expansion of existing (Subsidiaries’) activities? The next five years will undoubtedly be daunting given the present unfavorable economic scenario and some domestic issues. The effects would take a few years to recede. Business however, will continue but no longer as usual as we adopt a more cautious approach towards spending and capital investment. One particular business which has commenced operation recently is the support services concession for hospitals in Sabah whose contract period spans over the next 10 years. The concession which took effect in April 2015
is undertaken through a joint venture between SEDCO, local partners and a renowned Peninsulabased services provider. The concession value is estimated at RM180 million annually. Another significant project which is currently at the preliminary stage is the BIMP-EAGA Submarine and Terrestrial Cable Project (BIMP-EAGA Rink), a telecommunications infrastructure development collaboration amongst the member territories aimed at enhancing sub-regional connectivity and boosting economic growth. SEDCO whollyowned subsidiary, SEDCO Communications Sdn Bhd (S.Comm) is presently leading a consortium (special purpose vehicle) comprising of appointed agencies from Malaysia (Sabah), Brunei and the Philippines to realize the project. It involves a development of high bandwidth fiber optic cable system which covers over 5,093 kilometers linking BIMPEAGA areas and Guam (USA). On our existing project, we are looking into upgrading the capacity of our cement plant in Sepangar to cater for the growing demand for the West Coast market which is projected at 5% annually. The demand for West Coast is expected to rise from 1.003m MT in 2015 to 1.28m MT in 2020. The proposed expansion of Cement
Industries (Sabah) Sdn Bhd’s plant in Sepangar would increase its capacity from the present 1.1MT to 1.6MT annually. The project is estimated to cost around RM350 million including the construction of a new clinker unloading jetty. A study is also being carried out on the potential of SEDCO’s 1,200-acre land in Limau-Limauan, Kudat to be developed into an oil and gas support services hub to support the upstream and downstream activities of the industry. Potential components in the hub include deep water ports; marine jetty/ wharf; major fabrication yard; shipyard/building and repairs; marine base; supply/ support base; tank farm; manufacturing support industries; other oil and gas related activities. Under the eleventh Malaysia Plan, SEDCO has proposed a total of 25 socio-economic projects/ programs over the next five years with an overall fund application of RM194.07 million from both Federal and State Governments. Of the total amount, RM7.4 million is for entrepreneurial training, RM8.1 million for Protune Program (including kiosk development & maintenance) whilst the remainder of RM178.57 million is for development of trading premises and infrastructure. Key amongst them is the proposed RM29 million SME Park in Sepangar which is aimed at providing a centralized and 10
dedicated centre for SME entrepreneurs complete with infrastructure such as storage facility for halal products and other basic amenities. The project will comprise 54 units of 2-storey terrace warehouse cum office & 12 units of semidetached warehouse cum office. Q4: SEDCO is currently finalizing its Halatuju for 2016-2020. What would be the focus areas (emphasis) SEDCO moving forward? The formulation of SEDCO’s new Halatuju is timely as its duration coincides with the implementation period of the eleventh Malaysia Plan – the final push to attain ‘developed nation’ status
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- as well as the on-going initiative to transform SEDCs. So we can expect a high degree of focus, enthusiasm and urgency. At this stage, we have determined four key result areas (KRA) namely Financial, Customer, Internal Process and Learning & Development. Financially, we will strive to increase the yield from our investment and to ensure a more systematic and effective monitoring of our subsidiaries. We would also look into enhancing both our business development and land development strategies & approaches. SEDCO will also intensify its efforts to produce competent, productive and competitive entrepreneurs. There will
be more publicity and promotion of our programs and efforts so as to increase public awareness of our developmental roles and socio-economic contribution. Internally, we seek to enhance the capacity of the organization with the aim to achieve high corporate governance, effective management system & work processes, productive and conducive working environment, positive work culture and competent & dynamic work force. Ultimately, we aspire to reattain our stature as a preferred investment partner and respected economic development player thus reclaim our position at the forefront of the State’s development.
BEYOND 2015
SAMUR Jetty
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ince its inception five years ago, the Sipitang Oil and Gas Industrial Park (SOGIP), strategically located on 4,065 acres of land at Mengalong in the Sipitang district of Sabah, has made impressive progress. It looks like the noble aspiration of the Sabah State government to turn SOGIP into a world class integrated petrochemicals industrial park through industrial clustering will become a reality sooner than expected. Although an impressive start has been made with the development of basic infrastructural works on the site under the 10th Malaysia Plan(10MP) period, the plan for further development of SOGIP goes way beyond. For that, it is geared to attract new investments to the state that is estimated at RM35 billion, with the potential of creating 3,745 new job opportunities upon completion of its full range of clusters. The Phase 1 and 2 of SOGIP’s Internal Basic
Infrastructure Development has now been completed by three appointed contractors. Supported by the Federal Government through its agency Unit Kerjasama Awam Swasta (UKAS), a facilitation fund of RM195 million was channeled for the development of infrastructure such as paved road, road reserve, street lights, drainage and landscaping. These facilities will now enable free and easy access to PETRONAS’ multi billion ammonia and urea project dubbed as SAMUR. Fully aware that internet connectivity is always a pre-requisite for would be investors, there is now made available Information and Communication Technology Infromation (ICT) facilities as a result of the completed laying of the fibre optics in SOGIP. The services to be madewill be fully available even for the utilisation by SAMUR Project once the power supply to energize it services are activated soon. The services that are available
are Direct Metropolitan Ethernet (DOME), Voice line, Asymmetrical Direct Subscription Line (ADSL) and a capacity of 2Megabyte (MB) and above Internet Connection for investors within SOGIP. The period covered by 10MP also saw the succesful completion of the construction of water supply treatment plant that serves SOGIP exclusively. Completed in October 2014, in fact ahead of SAMUR’s actual requirement, the water treatment plant is currently supplying water to SAMUR, thus enabling Petronas to do backwash and testing run on their almost completed plant. Complementing the support given by the Federal government, the water treatment plant is a project undertaken by the State of Sabah with the development cost of RM179.5 million. The water treatment plant has the capacity of 40 Million Litres Per Day (MLD) which can be stretched to 60 MLD on a 24hour run-basis.
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Left: Road Street lighting with SAMUR Plant at the background
The treatment plant has a reticulation of pipe with the length of 11KM from the plant site right to SOGIP. Meanwhile, the Ministry of Energy, Green Technology and Water is currently undertaking the rationalisation of power distribution on the west coast of Sabah. For this purpose, the ministry has approved a RM333 million project which will consist of a transmission line of 106KM with the capacity of 275 Kilovolt (KV) running from Kimanis Power Plant (KPP) to a main power station (PMU) which is located within SOGIP. Once this project is completed in early 2018 SOGIP will have the abundant supply of power or electricity for its investors with a capcity of 200 megawatts. The project will be implemented by the Sabah Electricity Sdn Bhd (SESB). Petronas SAMUR plant requirement for power is not affected by this project as it is self-generated through its gas-powered co-generation plant. SOGIP development is gas feedstock driven especially on its Phase 1 and 2 implementation. In this respect, Petronas Gas Bhd has been involved in SOGIP development by laying 8.2KM lateral gas pipeline from the
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Water Treatment Plant exclusively for SOGIP
Sabah-Sarawak Gas Pipeline (SSGP) right to SOGIP’s city gate. The pipeline is of 12 inch diameter with the capacity of chanelling 180 million standard cubic feet per day (mmscfd) of natural gas to SOGIP. The project was completed in September 2014. For future needs, additional pipeline that will run parallel to the existing pipeline can easily be laid up as there will be no longer the need to acquire private lands. Last but not least, under the 10MP an allocation of RM18.5 million was approved by the Federal government for the construction of a new access road to SOGIP. This access road will connect SOGIP to the main Kota Kinabalu – Sindumin road with a distance of 4.5 KM. The road is currently under construction and expected completion in February 2016. With the completion of the access road, the heavy vehicles that are currently plying the main road that leading to SOGIP will no longer need to worry about causing dust pollution to the kampong folks that live around the SOGIP area. ….a look beyond 2015
Looking beyond 2015, there is a second ammonia plant on the drawing board, alongside the SAMUR site, with an investment value estimated at RM2.6 billion. It would spearhead further downstream activities for production of ammonia and its derivatives like ammonia sulphate, caprolactam, melamine, ammonia nitrate and other fetilizer-based chemical products. Also on the drawing board for the development of SOGIP in the next five years are projects related to bulk oil storage and refineries for which investments are valued to the tune of RM15 to 20 billion. Among other support services that are anticipated to be located in SOGIP would be independent power plants (IPP), ports and jetties development to meet special needs of future investors. Thus, under the 11MP which runs from 2016 to 2020, an application for funds for several projects to expand and improve SOGIP has been submitted to the relevant agencies of the Federal and State government. One of the projects that Sabah Oil and Gas Development Corporation Sdn. Bhd. (SOGDC) plans to embark on is the development of SOGIP
Phase 3 by providing basic infrastructure as per the earlier Phase 1 and 2. Phase 3 infrastructure developemnt cost is estimated to be RM88.5 million. This project will take place at the western part of SOGIP, thus enabling the investment for oil bulk storage and refineries. As SAMUR jetty is almost exclusively for its products, there is a need for a second jetty which will act as multi-purpose jetty. The jetty and marine services will be provided by Sabah Ports Sdn Bhd, a state-owned entity and an experienced operator that has the exclusive rights to operate the seven current ports in Sabah. To improve SOGIP drainage system, funding to upgrade the current earth drain in SOGIP to concrete drain has also been applied. This will allow better flow of
drain water within SOGIP and reduce maintenance or operational cost of running SOGIP. In addition, fund has also been applied for a Master Environmental Impact Assessment report. This report will provide better information for investors in SOGIP and to speed up regulatory process in regards to Environmental issues. Haji Abdul Kadir OKK Haji Damsal, the Chief Executive Officer of Sabah Oil Gas Development Corporation Sdn Bhd (SOGDC), a wholly-owned state entity chaired by the Chief Minister of Sabah, responsible for the development and marketing of SOGIP, is hopeful of the continuous and unwavering support from the Federal and State governments. With this support, he said, the ultimate
target of developing SOGIP into a premier industrial park of choice for petrochemicals hub in the Asia-Pacific region, will definitely be realised and SOGIP will ultimately become a pride not only for the State of Sabah, but for Malaysia as a nation SOGDC has learned from mistakes made by other industrial estates that predeveloped industrial park is not a given in attracting investors. Haji Kadir explains that SOGDC will maintain its philosophy on developing SOGIP by specifically responding to the needs of confirmed investors and act accordingly. He said “We have applied this investorcentric approach with SAMUR project successfully. So far, response from investors is very encouraging,� he said in an interview with SIQ.
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Facts & Figures No. State
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Jan-June 2015
MALAYSIAN INVESTMENT DEVELOPMENT AUTHORITY
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Biomass: Soong on the move Tan Sri Soong: Come on board
I
nterests in business opportunities in oil palm biomass among Sabah industry players appeared on the uptrend if attendance at a recent seminar in Tawau was any indication. Active promotion of biomass downstream has been on-going for the past 4-5 years. There is much investor interests backed by mature technologies as well as market demand for finished products. However, progress has been slow largely due to the issues of biomass aggregation and long-term supply of raw materials and. For local entrepreneurs, the challenge is in raising large capital needed for producing highvalue biochemical. But investors now have wider options in lower capex investments such as in producing pellets from empty fruit bunches, energy by methane-trapping (at oil palm mills) and exporting palm fibre. More than 100 business people registered for the one-day Seminar
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on Business Opportunities in Palm Oil and Palm Biomass on June 27 organised by the Tawau Chinese Chamber of Commerce, and supported by POIC Sabah Sdn Bhd and the biomass focus group of the Associated Chinese Chamber of Commerce and Industries Malaysia (ACCCIM). Tawau chamber President, Lo Su Fui, said organisers had expected 60-70 persons based on initial indications. “We had to make last-minute arrangement at the venue to accommodate the sudden influx.” Biomass is among the raw materials leveraged by Malaysian authorities to develop the bio-economy potentials. Oil palm biomass alone is estimated to have a potential of adding RM30 billion to the country’s gross national income by 2020. Sabah, with about 1.5 million hectares of oil palm, has been identified as the national hub for the development of second generation biofuel (i.e. from biomass) and high-value oleo
derivatives. POIC Sabah, owned wholly by the Sabah government, is developing the 3,500-acre palm oil industrial cluster at Lahad Datu (POIC Lahad Datu) to develop downstream industries with crude palm oil and oil palm biomass. “Our company has been trying to generate interests among local oil palm players in investing in biomass downstream,” said Rose Pun, senior manager of marketing at POIC Sabah. “We used to receive lukewarm responses but this time it is totally beyond our expectations.” The enthusiastic response has strengthened POIC Sabah’s optimism that Sabah-based oil palm companies are warming up to the prospects of developing oil- and biomassbased value-adding. “Our big plantation areas and the 130-plus oil palm mills produce enough raw materials previously considered wastes, and there are now all sorts of technologies to convert these wastes into wealth,” Ms Pun said on the side-line of the seminar. The seminar kicked off with a passionate plea from Tan Sri Dato Soong Siew Hoong to industry players to pick up the pace in investing in biomass downstream. “Stop belly-aching,” the 90-year-old veteran industrialist urged. Soong is the chairman of ACCCIM’s international trade and industry working committee.
Joseph Lim: Immediate demand for fibre in China
He initiated and leads the road show that is moving around the country and neighbouring countries to promote biomass utilisation. Nine papers were presented. They were: • Overview of bio-based industry potentials in Sabah – by Malaysian Biotechnology Corporation • Government legislation, objectives, action plan, incentives, grants and financing for biomass industry – by Malaysian Investment Development Authority • Investment opportunities in POIC Lahad Datu – by POIC Sabah Sdn Bhd • Unveiling biomass and ethanol extraction – by Teck Guan Group • Business opportunities in palm biomass downstream – by Global Green Synergy • Utilisation of biomass and palm oil mill effluent for the generation of biogas, biofuel and electricity – by Green Energy Resources • New technology for
extraction of oil residue from mesocarp and palm oil value-add downstream industry – Eonchem Technology • China market: current situation, development of biomass pellets standard and import requirement & procedure – Beijing Windbell Technology Co Ltd • Potential project funding - by Malaysia Debt Ventures Berhad. Sabah’s oil palm industry produces about 30 million dry tons of biomass per year. These biomass include trunks and fronds from the field, EFB, mesocarp fibres, palm kernel shells and palm oil mill effluent (POME) from the mills. Fronds, cut during harvesting of fresh fruits, are left in the field. Some plantations turn fronts into animal feed. There is a growing interest to use fronds to produce pellets. Trunks become available when oil palm trees over 25-years old are felled. Though considered timber grade, trunks are more often than not simply chopped
POIC’s Rose Pun: Growing interest in biomass
(with slicer attached to a tractor bucket) and left on the field. Most oil palm mills have boilers to generate electricity they required by burning a combination of EFB, palm kernel shells and mesocarp fibres. More and more mills are beginning to trap the methane produced in the POME to generate power, thus freeing EFB, PKS and mesocarp fibres for other more profitable uses such as bio-ethanol and bio-chemicals. These are areas the Tawau seminar attempted to highlight. Dato Joseph Lim of Global Green Synergy spoke of immediate demand in China for large volumes of fibre from EFB for use in the manufacture of erosion control mats needed in its vast desert areas. Goh Kee Seng whose Penang-based company EonMetall Technology which has a patented process in extracting residue oil from oil palm waste, encouraged millers to consider that loss of crude palm oil in mill wastes amounts to over RM2 billion per year. He lamented that only a fraction of the 400 over mills in Malaysia employs oil recovery technologies.
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Everything bio: New frontier of Sabah’s economy
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he oil palm industry produces two categories of useful things. One is the oil (palm oil and palm kernel oil) and the other is the biomass, comprising the trunks, fronds, palm kernel shells, mesocarp fibres and palm oil mill effluent, or POME. The oil is where the money is. The biomass was until recently largely a nuisance except perhaps for palm kernel shells whose high calorific value makes it ideal as a feedstock to fire boilers. But the landscape is changing. First there is Malaysia’s Bioeconomy Transformation Programme (BTP) which, under the stewardship of the Malaysia Biotechnology Corporation (Biotech Corp, under the Ministry of Science, Technology and Innovation) aims to be the game-changing engine for the country’s economy on its way to a developed nation status by 2020. Bioeconomy contributes just 2-3% of Malaysia’s GDP currently and this is expected to rise to 8-10% by 2020; earning RM3.6 billion in revenue and creating 16,300 jobs. A recent BioBorneo Conference in Kota Kinabalu was told that globally, the cellulosic sugar (from biomass) market was worth USD164 billion in 2010. This is expected to
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Sabah’s biomass initiative are well backed by Agensi Inovasi Malaysia (AIM).
quadruple to USD600 billion by 2025. Driven by a global pursuit of everything renewable, and with sustainability and resource optimization on everyone’s lips and on the agenda of a growing number of companies subscribing to responsible corporate governance, the vocabulary has changed. Bioeconomy is on the national agendas of major economies such as the United States and Europe. Biomass is no longer ‘wastes’ but a ‘resource’, and there is plenty of this resource in Sabah. With about 1.5 million hectares of oil palm and 125 oil palm mills, Sabah is estimated to generate about 30 million dry tonnes of biomass per year. At least 5 million tons are ‘mobilizable’ (within economic distance, uncommitted usage), according global research firm Pyory International in a 2015 study funded by Agensi Inovasi Malaysia (AIM, under the Prime Minister’s Department). The biomass is a rich source of materials for high value industrial applications such as in plastics, fuel and food
preservatives. Through a variety of processes biomass is turned into fuels, power, heat and value-added chemicals, much like the petrochemical refineries using fossil oil. American ‘green chemistry’ company Verdezyne, which is building a plant in Johor, estimates a US$70 billion value for chemicals much of which could be derived from oil palm-based feedstock. The company, which is in the closing stages of inking an investment at POIC Lahad Datu, also estimates that the products can ben be further produced from the bio-chemicals have an estimated value of US$1.5 trillion. Malaysia’s National Biomass Strategy, launched in 2011, recognized these potentials and has identified Sabah as a national hub for valuable oleo derivatives and second generation biofuel. At POIC Lahad Datu, a biorefinery cluster is taking shape with Malaysian conglomerate Genting Group in a biochemical venture with US-based Elevance Renewables. “We are now focusing on attracting investors to POIC Lahad Datu to build factories to produce pellets and to process biomass into bioethanol, sugars, biofuels and biochemicals,” said Datuk Dr Pang Teck Wai, chief executive officer of the state-owned POIC Sabah Sdn Bhd, the developer of
the Lahad Datu palm oil industrial cluster, an industrial park that will eventually encompass more than 4,400 acres. In a paper ‘Mobilization of palm-based biomass for sustainable development of bio-economy in Sabah: A POIC Lahad Datu perspective’ presented at several international conferences including the World Bio Markets Asia in Kuala Lumpur 2013, Pang said POIC Sabah is working with Biotech Corp and AIM to make Sabah the country’s future bioeconomy hub particularly in second generation biofuel. Bio-economy, according to Biotech Corp, refers to “all economic activity that is derived from the continued commercial application of biotechnology; it encompasses the production of renewable biological resources and their conversion into food, feed, chemicals, energy and healthcare wellness products”. BTP promotes application of biotechnology in agriculture production, industrial manufacturing and human wellness. POIC is focused on oil palm biomass utilization that will have an impact in all the BTP target segments. It has been attempting to overcome the main challenge to success: the aggregation of biomass. A POIC-initiated effort to start a cluster to get oil palm mills participate in a joint-venture met with limited success largely
because millers’ wait-andsee stance. “There wasn’t much awareness about the demand for biomass. We (POIC) went out and promote it so much so that the biomass owners now become aware of the value, and are waiting to determine the most profitable way of selling or utilising it,” said Pang. He added that as the process of aggregation becomes better understood, and as technologies advance to make smaller processing plants viable, steps are being taken to develop ‘satellite POIC’. “The aim is to make it possible and cheaper to aggregate biomass at different strategic locations where off-takers can build plants,” explain Pang. “This way we eliminate the headache of requiring many mills to commit to supplying large quantities of biomass, and we save on transportation cost. “We are embarking on a new frontier not just in the oil palm industry, but also the overall economic development of Sabah.” “Malaysia has one of the world’s richest biodiversity and Sabah is very much in that picture,” said agronomist Dr Lee Ming Tong, who shared the paper with Pang. “I believe a biorefinery cluster at POIC Lahad Datu with the participation of global companies and the latest technologies and attracting the best brains in the business will have a very positive impact on Sabah.” Lee is also business
development advisor to POIC Sabah. Sabah is very much in the Malaysian bio-economy roadmap. Of the 10 Entry Point Projects (EPPs) listed in the BTP, the biorefinery cluster at POIC Lahad Datu is a key component. Malaysian biotech is also in the midst of the lobster farming project in Lahad Datu with US-based Darden Group. The State has also set up the Biotechnology Centre since 1996 under the Department of Veterinary Services. Meanwhile, a recent announcement by a Malaysian-owned company in London in pursuing the commercialisation of graphene has generated a wave of excitement for oil palm biomass. This is because Platinum Nanochem, the company involved, manufactures graphene from oil palm biomass, and is linked to a facility in Lahad Datu owned by an entity called International Biofuels. Graphene has been described by the scientific community as “wonder material of the 21st century” after it was first isolated by Russian scientists who went on to win the Nobel Prize for Physics in 2010. Experts believe the practical use of graphene can lead to stretchable mobile phones and high definition television sets as thin as paper and can be rolled up into a one-inch tube! If used in lithium-ion batteries it can lead to 10 times more energy storage and can be charged within minutes.
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Palm oil industry has RM200 billion potential economic value
AHAD DATU: Sabah’s palm oil industry has a potential economic value of RM200 billion if downstream value-adding utilising crude palm oil and oil palm biomass is fully developed. The figure, which is about five times larger than the state’s annual gross domestic product (GDP) was mentioned by Datuk Bolkiah Ismail, the assistant minister of Industrial Development, here, on July 30, 2015. Bolkiah was delivering a speech on behalf of Minister Datuk Raymond Tan Shu Kiah at the opening of the 3-day exhibition, which also included a symposium on biomass and a technical seminar. The assistant minister said the Sabah state government has ambitious plans to tap the potentials and one of the enablers is the palm oil industrial clusters (POIC) here and in Sandakan. The POIC here, developed by stateowned POIC Sabah Sdn Bhd in particular has been identified as the main driver of Sabah’s oil palm development under the 11th Malaysia Plan from next year. The POIC in Sandakan, known as Sawit POIC, is being developed by Sawit Kinabalu, also wholly owned by the State government. More than 40 exhibitors comprising of Malaysia and foreign companies took part in 21
the exhibition, the 6th in the series but the first in Lahad Datu. Among the exhibitors was an Indonesian investment coordinating authority, Badan Koordinasi Penanaman Modal from Jakarta. On security, Bolkiah said that the infamous 2013 incursion by a group of Sulu terrorists at a village here has not had any visible long-term impact on public sentiments. He based his assessment on the largely uninterrupted five daily flights operated by MasWings between here and Kota Kinabalu since terrorists were repelled from their occupation of Kg. Tanduo, about 150 km from here, in March two years ago. Since the incursion, the government has set up the Eastern Sabah Security Command (EssCom) combining the resources of the military, police and Maritime Enforcement Agency. EssCom has continually expanded its operations and strengthened its hardware assets to keep the border secured. One preventive feature is a dusk-to-dawn curfew along the sensitive coastal region of what has come to be known as Eastern Sabah Security Zone, or EssZone, covering over 1,000km of coastline from Kudat in the north to Tawau in the south.
Bolkiah urged businesses to consult and work with the EssCom and ‘make them your partners in your security planning and implementation’. Describing Lahad Datu as the place ‘where big things in oil palm happen’, the assistant minister said there is presently already a multiplenational presence in POIC Lahad Datu and this is set to grow as more advance infrastructure is built. He referred to the RM450-million POIC container port under construction. Due for completion in 2017, this port will complement the existing dry bulk, liquid and barge jetties in POIC Lahad Datu, and provide arguably the most comprehensive port infrastructure-in-one-place in the entire BIMP-EAGA region. Lahad Datu will grow to become a major regional hub port, he predicted. Lahad Datu district officer Iman Ali said in his welcome speech that his office is complementing the efforts of EssCom to continually improve security in the district. Welcoming Palmex participants and visitors, Iman extolled on the tourist attractions in Lahad Datu from mud volcanoes (in Tabin Wildlife Reserves) to natural beauty, and pledged to make safety, cleanliness and comfort synonymous to the town.
6th International Palmex Malaysia Palm Oil Technology Expo and Symposium 2015 declared open by YB Datuk Bolkiah, Assistant Minister of Industrial Development representing YB Datuk Raymond Tan Shu Kiah, Deputy Chief Minister cum Minister of Industrial Development Sabah.
Palmex 2015 participants visiting POIC Lahad Datu.
Some of the exhibitors and visitors.
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Pushing Sabah’s palm oil agenda through art
(L-R) Junior Category First place winner, Kok Ka Ket from SJK (C) Siew Ching and third place winner, Goh Jin Rou SJK (C) Yuk Choi.
T
he company, in collaboration with the Malaysian Biotechnology Corporation, Sabah Education Department and Sabah State Library, introduced the Bio-Art Competition last May as another attempt to generate awareness about oil palm, this time centred on biomass and resource optimisation. POIC Sabah have been aggressively promoting the development of a biomass industry. POIC are promoting waste to wealth by utilising biomass, and everywhere people are talking about sustainability and optimisation of natural resources, and our aim was to try to strengthen 23
such mind-sets. Lahad Datu, for obvious reason, was chosen as the launching pad for the project which POIC Sabah and its partners hoped to eventually organise state-wide. A total of 63 students, aged 9-17 from 7 primary and 8 secondary schools, took part in a drawing competition with the theme “Kita dan Bioteknologi berkaitan dengan minyak kelapa sawit dan biomass�. According to Hoo, the panel of judges comprising representatives from the organisers were impressed with the quality of the interpretation of the theme.
The judges concluded that the students, most of them had little knowledge other than the fact that the paper on which they were to draw on was made of biomass fibre, showed a high level of enthusiasm by researching into elements to reflect the theme.
Top from Left: The winning entries for Junior Category encapsulates all the elements of biotechnology from the perspective of a 9 – 11 year old.
Right (L-R) First place winner in the Senior Category, Chua Jia Qi from SM Cina, Lahad Datu and Third place winner in the Senior Category, Rievell Anessah from SMK Sepagay.
Top from left: The winning entries for Senior Category encapsulates all the elements of biotechnology from the perspective of a 15 - 17 year old.
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NIPPON PAINT Sabah relocates to KKIP
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ippon Paint (Sabah) Sdn. Bhd. (‘Nippon Paint Sabah’), a subsidiary of the Sabah Economic Development Corporation (SEDCO), has relocated to a new state-of-the-art manufacturing facility and operations at the Kota Kinabalu Industrial Park (KKIP) effective 1 June 2015. The RM13 million investment marks a new chapter for Nippon Paint Sabah and signifies its continued commitment as the leading Total Coating Solutions provider in Sabah. The modern infrastructure enables the Company to potentially quadruple its production, from 350MT/ month to 1,200MT/month per shift, and significantly enhance its delivery 25
system and warehouse management. With an increased production capacity and efficiency, Nippon Paint Sabah aims to capture 70% of the market share in the State. The new 7-acre premises is home to approximately 70 employees and consists of 2 main buildings; a factory with a warehouse and a three-storey office building. It is also equipped with a training centre to upskill and expand the capabilities of local painters, specifiers, dealers and employees. Construction commenced in January 2014 and was completed in April 2015. The new space also allows Nippon Paint Sabah to accommodate future growth as the current
premises occupies only half of the total area. Prior to the move, Nippon Paint Sabah had been located at SEDCO Industrial Estate Kolombong, Inanam since 1982. Nippon Paint Sabah is part of the Nippon Paint Malaysia Group, the No. 1 Total Coating Solutions provider in Malaysia. Established in 1967, the Group currently employs over 2,000 employees across 20 sales offices and six manufacturing facilities within the Asia region. As The Coatings Expert, Nippon Paint serves multi-segments in the coatings industry, including Architectural, Protective, Industrial, Automotive and Marine, and its innovative range of products coat all
imaginable surfaces from metal, wood, tiles, cement, slate, glass as well as plastic. Reinforcing its leadership in the coatings industry, the Group has won consumer choice awards in Malaysia, such as the Reader’s Digest Trusted Brand Awards (2006-2015) and Putra Brand Awards (2010-2015). The Group’s innovation has also been
recognised by the industry with the Best Company for Leadership in Paint Technology Asia by IAIR in 2014 and Frost & Sullivan’s Paint & Coatings Company of The Year in 2011. In its concerted effort to champion sustainability towards a greener footprint, the Group has received the Green Label Certification (by the Singapore
Environment Council), Eco-Labelling Certification Licence (by SIRIM QAS International) and several Green Excellence Awards by Frost & Sullivan. For more information on Nippon Paint, please visit www.nipponpaint.com.my
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ENG PENG Group -A success story
T
he Eng Peng group of companies started as a family owned in the 1980’s. Over the past two decades, it has steadily expanded through organic growth, acquisitions and diversifications. Today, it is one of the major suppliers of poultry products and frozen food in Sabah with more than twenty companies under its umbrella. Eng Peng Group is currently one of the largest vertically integrated poultry producer in Sabah involved in the entire production process from breeding and hatching to customers’ door step. This allows them to have better control over products quality Right: Fully Integrated
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and supply stability as they are committed to continuously improve on the products and services they provide for their customers. Apart from producing poultry, Eng Peng Group is also one of the major frozen meat importers in Sabah. The company’s vision is to be the choice food provider for their target markets and recognised for their commitment to food safety, quality and good value whilst its mission is to ensure that it is fully compliant with the Halal certification and practices food safety in all their operations. They firmly believe in investing in their people by providing a conducive work environment that enables
their staff to perform as a team. More importantly, Eng Peng Group ensures that their business operation is cost efficient for sustainable growth. In order to cope with their wide distribution areas covering the Peninsula and Sarawak, Eng Peng Group is planning on expanding its cold storage facilities as well as adding a new FMCG dry warehouse. In addition, the Group is also in the midst of building a feed mill in KKIP which is scheduled to be completed by end of this year. This latest addition will certainly enhance Eng Peng Group in terms of their productivity, marketability and profitability.
Left: Brands Eng Peng group distribute
(Source from Eng Peng Group)
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E
xpansion Services provider with a focus on Asia, aims to capture opportunities in the promising East Malaysian market with the opening of a new distribution center in Kota Kinabalu. The facility opens new doors for consumer goods and healthcare companies seeking to grow their business presence in East Malaysia. DKSH, the leading Market Expansion Services provider with a focus on Asia, strengthens its growth platform in Malaysia by expanding its infrastructure through the opening of a 207,000 sqft (19,200 sqm) consumer goods and healthcare distribution center in Kota Kinabalu, Sabah. The larger and more advanced distribution center replaces an older facility which was operating at full capacity. The distribution center represents a significant capacity upgrade in DKSH Malaysia’s consumer goods and healthcare infrastructure and is part of its growth plans in the Sabah region. The newly built facility is strategically located in Kota Kinabalu Industrial Park (KKIP) with easy access to Sepanggar Bay Container Port and to the city center. Well connected to the transportation network, it allows DKSH to directly serve about 1,000 of DKSH’s consumer goods and healthcare customers in the region, including modern and traditional retail outlets, hospitals, clinics and pharmacies. The new distribution center also serves as a regional hub for the company’s smaller facilities in Tawau and Sandakan. Speaking at the opening event, Nicholas McLaren, Head Country Management, DKSH Malaysia, said: “With its solid infrastructure, strategic location and sound logistics services, the new distribution center strengthens DKSH’s unique and vast capillary distribution
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New distribution center in East Malaysia
Yang Berhormat Datuk Raymond Tan group photo with DKSH company of people.
Yang Berhormat Datuk Raymond Tan made a visit to DKSH factory outlet in Kota Kinabalu.
network in East Malaysia. We are well-positioned to leverage on Sabah’s promising market opportunities and growing demand for fast moving consumer goods, personal care, pharmaceuticals, medical devices and consumer health products.” “The new distribution center will help us to better cater to our clients and customers, offering them the highest level of operational efficiency in logistics and distribution services, ensuring faster route-to-market and ultimately helping them grow their business in East Malaysia,” he added. Built for future growth, the distribution center offers an additional capacity of 75,000 sqft (6,900 sqm) for further expansion. The temperature-controlled facility is equipped with a 29,000 sqft (2,700 sqm) cold chain room for the storage and efficient handling of consumer and healthcare products
including food categories, pharmaceuticals, vaccines and life-saving medicine. Managed by a state-of-art distribution managing system, it has a capacity of over 3,500 stock-keeping units (SKUs) and is designed to store up to 9,000 pallets. In line with DKSH’s dedication to quality assurance and compliance, the facility complies with Good Distribution Practices (GDP) and Good Distribution Practices for Medical Device (GDPMD) as well as adheres to stringent ISO 9001:2008 and ISO 13485:2003 international standards. The new distribution center replaces DKSH’s older facility in Kolombong and strengthens DKSH Malaysia’s capabilities and service offerings along the entire value chain and will contribute to the Group’s reputation as the leading Market Expansion Services provider with a focus on Asia.
COURTESY CALL
M
inister of International Trade and Industry, YB Dato’ Sri Mustapa Mohamed paid a courtesy visit to the Ministry of Industrial Development recently before he officiated the Trans-Pacific Partnership Outreach Program. Dato’ Sri Mustapa was accompanied by Mr. Peter Brian, Director of MITI Sabah. During the discussion, Dato’ Sri Mustapa briefed on the status of TPPA and discussed on trade
Oct 15, 2015
investments in Sabah. Datuk Dr. Pang Teck Wai, CEO of POIC Sdn. Bhd took this opportunity to update Dato’ Sri Mustapa on the latest development of POIC Lahad Datu. Negotiations on the TPPA were concluded on Oct 5, 2015 in Atlanta, the United States and the text of the document would be available on Nov 5, 2015. Mustapa said, the TPPA is the most controversial agreement which required the government to go all out to
explain the pros and cons of the agreement. He said at the moment, general discussions are based on speculations.
Sept 21, 2015
Raymond Tan meeting with Dato’ Sri Liow Tiong Lai, Minister of Transport during his visit to Kota Kinabalu. Raymond Tan informed the transport minister on the various views of business and political leaders on cabotage.
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COURTESY CALL
Sept 3, 2015
Top two pictures: Visit to SEDIA Jan 29, 2015
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Visit to SEDCO
NOTES