Thursday December 17, 2009

Khazanah and Pinewood in RM400mil studio project


KUALA LUMPUR: Khazanah Nasional Bhd has committed to invest RM400mil to build the region’s biggest independently-owned studio facility in Johor together with renowned international film production company Pinewood Shepperton plc, as the Government’s investment arm steps up efforts to boost Iskandar Malaysia’s appeal as a global creative hub.

The Pinewood Iskandar Malaysia Studio (PIMS) is scheduled to open by early 2013.

New investment flows into the Iskandar Malaysia economic region have suffered a “slight setback” due to the fallout from the economic recession, which also crippled Dubai recently, Khazanah managing director Tan Sri Azman Mokhtar told reporters at a briefing yesterday.

However, he was quick to point out that the overall impact of the Dubai financial crisis on Iskandar Malaysia was minimal, as the special economic corridor’s exposure to Dubai investors was considered “very small”.

Khazanah MD Tan Sri Azman Mokhtar (left) and Pinewood's Alan Dunleavy in Kuala Lumpur on Wednesday.

Azman also reiterated that Khazanah would “definitely” continue with ongoing plans to divest none-core assets and equities held in “mature” government-linked companies (GLCs).

Observers said funds raised from the disposals would be used to finance new greenfield projects, such as the PIMS and other facilities being developed in Iskandar Malaysia.

PIMS will be sited on 80 acres located adjacent to Medini, a large international urban development in Iskandar Malaysia which is backed by a number of global investors, including those from Abu Dhabi, Kuwait, Saudi Arabia and Dubai.

The PIMS project is estimated to cost RM400mil and would be entirely “underwritten” by Khazanah.

Azman said PIMS was “conservatively” projected to contribute about RM1bil in economic spinoffs over the next eight years and “will create 3,000 direct jobs and potentially an additional 5,000 indirect jobs a year.’’

About half the amount would come in the form of construction-related works.

Khazanah, through wholly owned unit, Beserah Venture Sdn Bhd, will own the bulk of the equity in PIMS.

Pinewood chief executive Ivan Dunleavy said the company would provide key operational and marketing input during both the construction and operating phases, in addition to the rights to use Pinewood’s global brand.

The PIMS project has already got off to a good start with pay-TV operator Astro signed up as an anchor tenant.

Under the deal, Astro will use the studios at PIMS to produce its local language content programmes.

PIMS itself will remain an independent studio, and Khazanah is relying on Pinewood’s global reach to market the facility as a “host” to bi-budget movie producers in Europe and the United States.

Pinewood has over 75 years of filming history, playing host to around 1,500 productions including international blockbusters like the James Bond and Harry Potter series, Batman Begins and The Da Vinci Code.

The PIMS project would start on a relatively “modest” scale of 30 acres, with room for further growth, Dunleavy said.

It will be Pinewood’s first studio in Asia.

Khazanah said the investment in PIMS was expected to contribute to the development of creative industries, with spillover effects to other economic sectors like tourism, finance and high-value manufacturing.

“The development of a creative eco-system in Iskandar Malaysia, one of the nine economic pillars identified in Iskandar Malaysia’s comprehensive development plan, will enhance innovation, creativity and stimulate entrepreneurship,’’ Azman said.

The state investment arm, however, would be keen to avoid the failure of the now abandoned RM3bil multimedia content facility known as E-Village in Sepang, Selangor that was launched in 2000.

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