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CM Datuk Seri Hajiji gave specific instructions to Chief Conservator of Forest, Datuk Fred Kugan, TAS [Timber Association of Sabah] and SEAC [Sabah Economic Advisory Council] to produce a comprehensive policy recommendation for ITP [Industrial Tree Plantations] and downstream industry in early 2021.Hajiji’s priorities were that, inter alia, the ITP should benefit Sabah’s economy and Sabahans, especially in the creation of jobs, value adds and investment conducive. Challenging objectives as it has never been done before!

Hajiji announced his ITP policy initiative in his keynote address at the SIBES [Sabah International Business and Economic Submit] on 17th January 2022.

Hajiji’s visit to 2 ITP plantations belonging to Jawala Corporation Sdn Bhd and Sepulut Forest Development Sdn Bhd on 25th July 2022 represents a number of “HISTORICAL FIRSTs” pioneering, revolutionary and innovative milestones for Sabah.

I like to highlight some of these more important FIRSTs in this article.

First customised policy initiative to seriously restructure Sabah’s economy.

Hajiji’s ITP policy initiative is Sabah’s first ever policy to build an industry “from the scratch” which will see Sabah transforming our own raw materials into finished products. This ITP policy initiative, if adopted for other raw materials like oil/gas, palm oil, minerals, will quantum leap Sabah from being a raw material producer to a finished product manufacturer. This quantum leap will mean many more and better pay jobs for Sabahans, Sabah’s wealth from natural resources will stay in Sabah, Sabah can say good bye to poverty. Sabah’s financial position can be immeasurably stronger and better. Our Sabah’s budget can be many times better than now. Our Sabah’s financial reserves can be many times larger.

FIRST customised policy initiative to create an industry.

Never done before in Sabah.

Sweet success of Sabahans First Policy for benefit of young Sabahan staff of Sapulut Forest Management Sdn Bhd.

For years, Sabah has conducted “muddling through” policies in establishing industries, hence the lack of success. Examples are abundant: [a] oil palm with no downstream, [b] Mamut Mines has given Sabah nothing but the largest hole in Malaysia, [c] oil and gas, until 2021, has little downstream notwithstanding Sabah is the largest oil/gas producer. Same is true in all other Sabah’s industries. Hence Sabahans have been relegated as the poorest.

To realise Hajiji’s vision, Forestry Department, TAS and SEAC have customised the ITP policy recommendations and implementation plan for Hajiji. ITP will definitely not become the oil palm industry which has failed to produce any meaningful downstream benefits for Sabah.

Hajiji’s ITP policy initiative will create an industry that will produce many long-term economic benefits for Sabahans. FIRST customised policy initiative to replace & reduce reliance of natural forest logs.

For years, Sabah’s economy has relied on natural forest. Eventually the revenue from this source has dwindled down to less than RM200m. Hajiji’s ITP policy initiative [a] will lessen Sabah’s dependence on natural forest for revenue. [b] will eventually eliminate cutting of natural forest logs altogether, thereby boosting Sabah’s conservation on the remaining natural forests for carbon trading, for saving water sources and for future generations to enjoy. [c] ITP will be a major source of jobs, downstream and investments for Sabahans.

FIRST customised policy initiative with economic value chain carefully identified and mapped out. 

Economic value chain is a common analytical tool but has never been adopted in Sabah before.

Lots of thoughts and considerations have gone into the ITP economic value chain to achieve Hajiji’s objectives of ensuring that Sabah can maximise actual benefits from his ITP policy initiative. The ITP economic value chain has identified where and how Sabah and Sabahans can benefit at every stage of the ITP policy, from nursery all the way to downstream products, 80,000 skilled and unskilled jobs, RM12 billion investments, 8 million cu meters of logs and extensive multiplier effects. Automation will generate higher productivity and better paid jobs.

FIRST customised policy initiative to succeed in Sabahans First Policy. 

More than 90pc of the oil palm industry is owned by non-Sabahans, little jobs for Sabahans.

While the oil palm industry is crying for foreign labour, Hajiji has seen for himself during his visit on 25th July that both Jawala and Sepulut are investments by Sabahans, owned by Sabahans, controlled by Sabahans, MD and CEO are Sabahans, more than 95pc of the jobs are held by Sabahans from top management to head of departments, right down to the ladies at the nursery. Many of them have worked in Jawala and Sepulut since leaving schools or colleges and have matured into various responsible management positions.

Outstandingly, these staff are mostly from rural areas.

On average a worker’s take home pay is about RM2,000.

Of considerable significance is that both Jawala and Sepulut have embarked on in-depth R & D across the ITP economic value chain. The ITP players are sharing their R&D.

Sabahans have proven to be “worth their mettle” in these Sabahan owned ITP plantations. Hajiji was happy to see for himself that Sabahan “BOLEH” spirit is very much alive, his Sabahans First Policy can be and is being realised in real time.

This economic transformation and restructuring will boost jobs for our Sabahans, retain wealth within Sabah. This is what Sabahans First Policy is all about.

FIRST customised ITP policy initiative and collaborations with young Sabahans, Sabahan entrepreneurs.

Some young Sabahans, including those from SAYAP, are quick to appreciate the significance of ITP and the opportunities in the ITP economic value chain. A few of them are already in collaborative arrangements or in the process of doing so with ITP investors. Similarly, some Sabahan entrepreneurs have begun collaboration in downstream. Hopefully, many more young Sabahans will avail themselves in the ITP downstream. FIRST customised ITP policy initiative requires much less land, benefits many more Sabahans. 

Compare this. [a] The oil palm industry is occupying more than 1.7 million hectares of Sabah’s prime agriculture land. ITP will occupy only 400,000 hectares, most of which are degraded [botak] lands. ITP will restore these lands to productive use as Jawala and Sepulut have proven. [b] The oil palm industry has produced nominal downstream. ITP will produce a comprehensive suite of downstream, including furniture and chemicals. [c] The oil palm industry is giving Sabahans negligible employment. In Jawala and Sepulut, 95pc jobs are held by Sabahans. They don’t moan and groan for foreign labour. [d] Though ITP will require only 400,000 hectares, it will produce as much GDP as the whole oil palm industry. [e] ITP will generate many more business opportunities for Sabahan SMEs in its downstream.

FIRST customised ITP policy recommendations by government department and private sector collaboration.

Thanks to Datuk Fred Kugan whose leadership has made it possible for the Sabah Forestry Department, TAS and SEAC to produce the ITP policy recommendations and its implementation, especially the painstaking of mapping out the ITP economic value chain to fulfil Hajiji’s vision.

FIRST customised ITP policy initiative has proven that Sabah can produce & implement policies to benefit Sabahans.

Hajiji’s vision, inclusive style and economic leadership have made it possible for the ITP policy to be customised, adopted and implemented to benefit Sabahans.

Adopting similar customised policies especially by GLCs, albeit with modifications, can help Sabah to focus and expedite the realisation of the Sabahans First Policy.

Hajiji’s FIRST customised ITP policy initiative is Malaysia’s FIRST.

Hajiji’s customised ITP initiative has put Sabah in the forefront of ITP in Malaysia.

Hajiji seeing where ITP begins at the nursery of Sepulut Forest Management Sdn Bhd.

‘Sir, here you are’, Sabah’s first finished ITP product from Jawala Corporation Sdn Bhd.

Recently, delegations from the Malaysian Timber Council and Malaysian Furniture Association met Datuk Fred Kugan and Mr. Norman Wong in Kota Kinabalu. They said that the furniture manufacturing is a RM24 billion industry in W Malaysia and is increasingly having problems sourcing timber overseas. They complimented Hajiji’s vision and initiative on the ITP policy profusely, saying that W Malaysia is at least 10 to 15 years behind Sabah in this regard. No W Malaysian state has such an ITP policy. 

Some have already begun to explore shifting their factories to Sabah.

Sabahans must work hard to preserve and improve on this hard earned 10 to 15-year lead, this competitive edge that Hajiji’s customised ITP policy initiative has given to Sabah.

- The views expressed here are the views of the writer Datuk John Lo and do not necessarily reflect those of the Daily Express.

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