Business

Monday April 9, 2012

Council to fast-track development of Malaysia-China Kuantan project


By THOMAS HUONG

huong@thestar.com.my

KUALA LUMPUR: Plans are afoot to move the pace of development at the Malaysia-China Kuantan Industrial Park (MCKIP) at “Qinzhou speed”.

East Coast Economic Region Development Council (ECERDC) chief executive officer Datuk Jebasingam Issace John said within the next three months, an operational framework for the MCKIP would be planned.

“For the MCKIP, we are still looking at the development of a business model. This has to be done quickly. We have to work very closely with the Pahang state government to fasttrack the whole thing,” he told StarBiz.

The MCKIP was mooted as a sister industrial area in response to the China-Malaysia Qinzhou Industrial Park, which is located about two hours' drive from the Gangxi Zhuang autonomous region's capital of Nanning.

Prime Minister Datuk Seri Najib Tun Razak had coined the term “Qinzhou speed” at the recent launch of the China-Malaysia Qinzhou Industrial Park, after being impressed by the speedy approval and work progress by the Chinese government.

The park, with a total planned area of 55 sq km in the Jingu River area near the Qinzhou port, was first proposed by Chinese Premier Wen Jiabao during his visit to Kuala Lumpur in April 2011.

Malaysia's special envoy to China, Tan Sri Ong Ka Ting, will coordinate the project with the parties involved in Malaysia and China.

The 1,500-acre MCKIP is sited within the East Coast Economic Region (ECER) at Gebeng town in Kuantan.

Kuantan was chosen for the MCKIP project because it has a port that faced the South China Sea which is the most direct link to the deepwater Qinzhou port and others in the Guangxi Zhuang autonomous region.

“It is only three days sailing time between Kuantan and Qinzhou,” said Jebasingam.

He said the private sector would play a significant role in the MCKIP, while the ECERDC and Pahang state government would provide infrastructure support.

“Investors will get the incentives that we already offer. These include tax holidays for up to 10 years, and we work together with the state government to give them competitive land pricing. The whole idea is that we want investors to have an effective cost of doing business at the early stage.”

Target industries for the MCKIP are plastic and metal equipment industries, automotive components, fibre cement board, stainless steel products, food processing, carbon fibre, electric & electronic (E&E), information communication technology (ICT), consumer products and renewable energy.

“MCKIP will be more focused on Malaysia-China business synergies and co-operation. What is important now is for our local business community to take advantage of this. As we move on in the future, our strategy will also be to look at emerging industries energy saving, environmentally-friendly technologies, biotechnology, new generation ICT, high-end equipment manufacturing, advanced materials and alternative fuels,” Jebasingam said.

He also pointed out that the MC KIP would leverage on Kuantan's strategic location in the ECER Special Economic Zone (SEZ).

The Kuantan Port is currently being upgraded into a deepwater port with an 18-metre draught, capable of catering to bigger, modern ships of more than 40 ,000 deadweight tonnes.

The port expansion is expected to be ready by end-2015.

Jebasingam said Kuantan Port City would be an integrated industrial and logistics hub for the region, stretching over 13,000ha (including the new port expansion and water basin).

Industrial activities here include the palm oil industrial cluster, bio-fuel industrial cluster, downstream petrochemical cluster, heavy industries in iron and steel, automotive cluster, small and medium enterprises (SMEs) and a free trade zone.

In addition, about 100 multinationals and SMEs have already established their operations within the proximity of the MCKIP.

“What this means is that with the MCKIP, the ECER SEZ is expected to have further new investments coming into the area.”

Jebasingam also pointed out that the ECER SEZ's advantageous geographical location wou ld make it a strategic investment gateway to Asean and Asia Pacific, with a population of 4 billion and a combined gross domesti c product of US$17 trillion (RM52 trillion).

According to Jebasingam, this year will also be a turning point for the ECER as components such as the Gambang Halal Park and Palm Oil Industrial Cluster will be completed.

“Infrastructure will be completed and investors will be coming in. These are in addition to the existing Pekan Automotive Park and the chemical and petrochemical hub in Gebeng Industrial Area, which are already very strongly established.”

Jebasingam said from 2009 to end-2011, the ECER attracted RM20bil in new investments while the first quarter of this year saw an additional RM10bil of new investments.

“We are about to reap the fruits of the work over the last two years. That is why you see a sudden surge in new investments in the first quarter of this year,” Jebasingam said, adding that about 45% of new investments were foreign, and covered sectors ranging from oil and gas, tourism, agriculture to manufa cturing.

Kuantan Port City will be hub for the region With the MCKIP, the ECER SEZ is expected to have further new investments coming into the area. -D ATUJKEB ASINGIASSMA CJEO HN

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