Tue, 27 Feb 2024


RM2b investment in Tongod plant a milestone: Mide
Published on: Sunday, November 26, 2023
By: Sherell Jeffrey
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Phoong announcing the launching of SME-UP Programme on April 14, 2023.
STATE Industrial Development and Entrepreneurship (Mide) Minister Datuk Phoong Jin Zhe said Sabah is forging ahead in investments in green technology, renewable energy, downstream industries and low-energy-intensity sectors.

“It is part of Sabah’s commitment to sustainable and diversified economic development,” he said, in an exclusive with Daily Express on how his Ministry has fared thus far in meeting the public’s expectations within the budgetary and other constraints.

One noteworthy dimension of Mide’s proactive approach is its international engagement. Several working visits to foreign countries, including prominent destinations like China and South Korea, have been instrumental in exploring and discussing potential investments in Sabah. 

These initiatives serve as crucial platforms for engaging with foreign investors and governments, fostering economic collaboration, and expanding Sabah’s global economic footprint.

In addition, Mide actively welcomed and considered a multitude of suggestions and proposals related to strategic sectors. These ideas from various sources are being evaluated. The aim is to transform these suggestions into actionable investment opportunities, aligning them with Sabah’s economic objectives and growth trajectory. 

One such initiative is Borneo Cement (Sabah) Sdn Bhd which entails the development of an integrated clinker and cement plant in Tongod, representing a significant milestone in Sabah’s economic growth. 

The estimated investment value of this ambitious endeavour spans RM2 billion, spread across two investment phases. 

It was made possible through a strategic joint-venture agreement between Sabah Economic Development Corporation (Sedco) and Sri Alam Setia Sdn Bhd. This partnership paved the way for the establishment of Borneo Cement (Sabah) Sdn Bhd, a company dedicated to spearheading the development of the clinker and cement plant. 

This collaborative effort showcases the State Government’s commitment to fostering private-sector partnerships and attracting investments that contribute to Sabah’s prosperity. 

There is potential to generate 1,000 employment opportunities for Sabahans. 

This addresses local unemployment concerns and also provides opportunities for its residents to participate in and benefit from the growth of the cement industry. 

The establishment of the integrated clinker and cement plant aligns with the broader vision of adding value to the state’s available material resources.

Instead of solely exporting raw materials, Sabah is moving towards producing finished products, enhancing its economic resilience and reducing its reliance on external markets. 

On the Feasibility Study of Industrial Water Supply in industrial parks, he said, the State Cabinet made a significant decision on November 22, 2022, by giving their approval for the proposed Feasibility Study on the Supply of Industrial Water (untreated clean water) or non-portable water in industrial parks. This critical initiative is being led by Jetama Sdn Bhd, and the study is expected to be completed by the end of this year, in 2023. 

The potential ramifications of this study’s successful implementation are far-reaching. If the supply of industrial water becomes a reality, it has the potential to alleviate the water supply challenges faced by domestic users in Kota Kinabalu, Lahad Datu, and Sipitang.

Currently, both industrial and domestic users share the same treated water supply source, even though many industrial operations only require untreated clean water. 

As of now, the study pertaining to the potential supply of industrial water at Kota Kinabalu Industrial Park (KKIP) has been successfully completed.

However, the study for POIC Lahad Datu and Sipitang Oil & Gas Industrial Park (Sogip) is still ongoing, indicating that comprehensive research is being conducted across various industrial parks. 

Courtesy visit by Core-Halal, Jakim, MDEC & Halal Development Corporation on Oct 6, 2023.

Once the study for all industrial parks is concluded, the Ministry of Industrial Development and Entrepreneurship (Mide) will proceed to present the findings and recommendations to the State Cabinet. This pivotal step will determine the direction and implementation phase of this crucial project, which holds the promise of optimizing water resources and benefiting both the industrial sector and domestic users in Sabah.

He also noted that one of the Ministry’s missions is to assist small and medium-sized enterprises (SMEs) to become manufacturing entrepreneurs.  

Some programs and initiatives undertaken by the Ministries are:

- The Small and Medium Industries support Program (SME-UP)

The Small and Medium Industries support Program (SME-UP) aims to increase the capacity and productivity of SMI enterprises in Sabah by providing support with machinery or equipment, improving packaging quality, required certification, Halal certification, and business digitalisation.

- Opening of Sabah SMI Product Centre

The Sabah SMI entrepreneur Centre’s establishment seeks to create a location for collecting, displaying, promoting, and selling local items from across the district, particularly Informal entrepreneur products. New entrepreneurs can use this initiative to send and advertise their products to the SMI Entrepreneur Center, and DIDR will identify suitable products for commercialization.

- Program Transformasi Usahawan Sabah (Trus-Mide)

The programme assists potential new companies by designing and producing new packaging, including logos, nutritional facts, and barcodes. This programme’s goal is to assist new entrepreneurs in marketing their products to local supermarkets such as Bataras and Kedai Mesra Petronas.

- SMI product marketing 

Program to local supermarkets

Ministry through the Department of Industrial Development and Research (DIDR), is partnering with Pasaraya Bataras and Petronas Dagangan Berhad to market the products of Sabah SMI businesses to local supermarkets, thereby helping to grow the economy and generate money.

This Program is viewed as an initiative that can assist entrepreneurs in marketing and promoting their products to local grocers.

- Preparation of commercial premises and an incubation centre

The Ministry, through the Sabah Economic Development Corporation (Sedco), also provides budding entrepreneurs with commercial premises and incubator centres in crucial districts, complete with coordinated and inexpensive rental rates. Sedco has created 760 units of shop premises, 377 units of small business premises, 14 units of R&R centres, 43 units of light industry premises, and 18 business lots in commercial centres.

- Entrepreneurship Development Course

To emphasise human development, particularly for existing entrepreneurs, several courses to increase production capacity have been planned, including retort technology courses, must and Halal certification courses, marketing courses, digitization courses, and entrepreneurship cultivation programs at the secondary school level via the Tunas Niaga (PROTUNe) Program.

In terms of attracting foreign investments, he said the State Government of Sabah has made significant strides in attracting foreign investments, contributing to the state’s economic growth and industrial development. Several key investments have been announced, and as of August 2023, progress reports indicate substantial advancements in various projects: 
  • SK Nexilis Malaysia Sdn Bhd’s Copper Foil Plant: SK Nexilis Malaysia, a South Korean company, is currently in the process of constructing a copper foil plant within the KKIP. Remarkably, the construction has reached an impressive milestone, with progress standing at 89.4 per cent. The project is on track for completion by the end of the year. Furthermore, SK Nexilis Malaysia is actively conducting trial production, demonstrating a proactive approach to meet customer evaluations and operational readiness. 
  • Kibing Group’s Solar Glass and Silica Sand Plants: Kibing Group, a prominent Chinese corporation, has embarked on two significant projects in Sabah. The construction progress for Kibing Group’s solar glass manufacturing plant within KKIP stands at 68pc. With an expected completion date in the first quarter of 2024, this project is progressing steadily. Additionally, Kibing Group is concurrently developing a silica sand processing plant in Sikuati, Kudat. Remarkably, this project is at a construction progress rate of 75 per cent, and it is expected to be fully completed by the end of this year. 
  • Esteel Enterprise Sabah Sdn Bhd’s Green Steel Manufacturing: Esteel Enterprise Sabah, a Singapore-based green steel manufacturing company, has committed to a substantial investment in Sabah. The estimated investment value of RM19.8 billion is spread across three investment phases. The formalisation of Esteel’s commitment took place through the signing of a Land Lease Agreement in Sipitang Oil and Gas Industrial Park (Sogip) with Sabah Oil & Gas Development Corporation (SOGDC) on Nov 30, 2022. Pre-operational work commenced earlier this year. Esteel has also taken steps to develop a Private Jetty, with interim approvals for both the private jetty and factory Development Plan. Construction will commence once the appointment and procurement processes are completed, reflecting Esteel’s significant investment and commitment to Sabah’s industrial development. 

He said these investments from SK Nexilis Malaysia, Kibing Group, and Esteel Enterprise Sabah are indicative of Sabah’s appeal to international investors and the State Government’s efforts to foster economic growth through diverse industrial ventures. The progress made in these projects demonstrates the commitment to bringing significant economic benefits to the State and its people.

“The path to economic growth and prosperity is paved with opportunities, and it is our responsibility to seize these opportunities and transform them into tangible benefits for our people and our state. 

“To do this, we have initiated a series of strategies to facilitate investment, and one of these strategies involves the establishment of a Task Force Committee within the MIDE,” he said.

He said the Task Force Committee represents a significant step forward in Sabah’s commitment to fostering a conducive environment for investment. It is a collaborative effort that unites various stakeholders, both at the State and Federal levels, to work towards a common goal: the successful implementation of investment initiatives that will propel our state to new heights of economic development. 

“In the current year, the Task Force Committee has been highly active and effective. We are pleased to inform that we have coordinated more than 10 investment proposals from both foreign and domestic investors. These coordinated efforts represent a significant milestone in our commitment to fostering a conducive environment for investment in Sabah. 

“Our collective hope is that these investment proposals can be swiftly realised in the near future. The coordination efforts undertaken by the Task Force are geared towards streamlining processes, addressing challenges, and expediting the implementation of these proposals. By doing so, we aim to unlock the full potential of these investments, which will not only benefit our state’s economy but also create valuable opportunities for our people. 

“As we continue to work diligently and collaboratively, we remain steadfast in our pursuit of economic growth, job creation, and industrial development for Sabah. We look forward to seeing these investment proposals come to fruition, bringing us closer to our vision of a prosperous and thriving future for our State,” he said. 

On the Free Trade Zone, he said the Ministry of Finance Malaysia has agreed to approve in principle for the declaration of the POIC Lahad Datu Industrial Park area, spanning 3,000 acres, as a Free Trade Zone. This significant step aligns with the provisions under subsection 3(1) of the Free Zone Act 1990, demonstrating the government’s commitment to facilitating economic growth and international trade in the region. 

However, it’s important to note that several vital conditions must be met, and approvals from various stakeholders are required before the area can be officially designated as a Free Trade Zone in the Federal Government Gazette. This process ensures that all regulatory and operational requirements are fulfilled, and it aligns with established protocols for such designations. 

Currently, the Mide and POIC Sabah Sdn Bhd are actively collaborating to fulfil these prerequisites and meet the necessary conditions. This joint effort is directed towards ensuring that POIC Lahad Datu obtains full gazettement as a Free Trade Zone. This strategic move is expected to further boost economic activities, trade, and investments in the region, positioning Sabah as a competitive hub for commerce and industry.

Both domestic and foreign investors exemplifies Sabah’s commitment to fostering a thriving and inclusive business environment.

On complaints by local entrepreneurs and investors on Sabah’s lack of clear or long-term road map, he said the Mide is conducting a study to evaluate the effectiveness of existing entrepreneurship programme implementation and propose programs that are appropriate to local needs, infrastructure facilities that must be provided, and financial resources required. 

The research began in October 2023 and will last eight months. As a consequence of this research, one Sabah Entrepreneurship Development Transformation Action Plan (2024-2030) would be released to serve as a guide for all parties involved in the development of entrepreneurship in Sabah.  As for investors, Sabah is in the process of preparing the Industrialisation Road Map with strategies to develop the industrial sector.

On public perception that foreign investors appeared to be favoured instead of Malaysian investors, he clarified that the perception is not accurate, particularly when it comes to the approach taken by our ministry. 

“The perception of favouritism towards foreign investors over Malaysian investors should be assessed within the broader context of our ministry’s objectives and policies. 

“We are committed to support and facilitate investments from all quarters, creating an environment where all investors have an equal opportunity to contribute to Malaysia’s economic growth and prosperity,” he said. 

“We are committed to fostering a level playing field where both foreign and Malaysian investors are treated equitably and provided with equal opportunities. 

“Our Ministry’s overarching goal is to promote economic growth, industrial development, and job creation within the state. To achieve this, we actively encourage both foreign direct investment (FDI) and domestic direct investment (DDI). Discriminating against local investors in favour of foreign ones would be counterproductive and contrary to our objectives,” he said. 

Between September 2020 and March 2023, Sabah has attracted significant investor interest, both from foreign and domestic sources. During this period, Sabah has welcomed a total of seven foreign investors and 43 domestic investors in various industrial sectors, indicating a robust and diversified investment landscape. 

These investors, both local and foreign, play a pivotal role in driving economic growth, fostering industrial development, and creating job opportunities within the State. Their contributions are essential for Sabah’s progress and advancement across various sectors, further solidifying Sabah’s reputation as an attractive destination for investment. Such engagement from both domestic and foreign investors exemplifies Sabah’s commitment to fostering a thriving and inclusive business environment.


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