KUANTAN, 5 FEBRUARY 2013 :Prime Minister YAB Dato’ Sri Mohd Najib Tun Abdul Razak, together with the Chairman of the Political Consultative Conference of the People’s Republic of China, His Excellency Mr Jia Qinglin, today jointly launched the Malaysia-China Kuantan Industrial Park (MCKIP), the first industrial park in Malaysia to be accorded national status.
To be developed jointly by both countries under the principle of “government guided, private sector driven”, MCKIP targets investments in high-end industries by investors from Malaysia, China and international players from ASEAN and the rest of the world.
MCKIP is expected to bring Malaysia-China relations to greater heights, as it will play a synergistic role with its sister park in Qinzhou, namely the China-Malaysia Qinzhou Industrial Park (QIP), that will help enhance bilateral trade between both countries.
The park will also generate significant economic spin-offs that will benefit the Malaysian business community and the local people of the East Coast Economic Region (ECER), especially in Pahang.
“I am pleased to announce that MCKIP has attracted investment commitments worth RM10.5 billion, which will create some 8,500 jobs for the locals. Of the total committed investments, more than RM4 billion will be realised on the ground by 2015,” said Dato’ Sri Mohd Najib today at the launch, which was attended by high-level Chinese delegation and other dignitaries.
The RM10.5 billion investment commitments are in addition to the RM38 billion investments already attracted by ECER since 2007 until January 2013, which have created 30,000 job opportunities for the residents in the Region.
The investment commitments in MCKIP consist of RM5 billion by Guangxi Beibu Gulf International Port Group for three projects in MCKIP, another RM3 billion by the Guangxi Beibu Gulf International Port Group and IJM Corporation Berhad in the Kuantan Port expansion project, and RM2.5 billion by the Master Developer of MCKIP, which is made up of a joint venture between a Malaysia consortium and China consortium.
The strategic documents for the investments were signed today at the launch, comprising the Shareholders Agreement between the Malaysia Consortium and China Consortium for the Establishment of the MCKIP Joint Venture Company; the MOU on the Investment Intent between the East Coast Economic Region Development Council (ECERDC) and Guangxi Beibu Gulf International Port Group for three projects in MCKIP, comprising a modern steel plant, a high-tech aluminium processing plant and an oil palm refinery; the MOU between Guangxi Beibu Gulf International Port Group and Rimbunan Hijau Group for the investment in the oil palm refinery in MCKIP; the MOU between IJM Corporation Berhad and Guangxi Beibu Gulf International Port Group on the Development and Expansion of Kuantan Port; and, the Framework Agreement on Financing Cooperation between China Development Bank Corporation and the Master Developer of MCKIP, comprising a Malaysia Consortium and a China Consortium, which will involve collaboration between the parties in the areas of project financing, and financial consulting services for the MCKIP project.
“These new investments would mean that the people in Pahang in particular, and ECER in general, will have better employment prospects and they will also have the choice of pursuing promising careers in high-end and technology-based industries,” Dato’ Sri Mohd Najib said.
He added that the impact of MCKIP on the local economy is already being felt and local chambers of commerce, SMEs and entrepreneurs should take advantage of the “golden opportunity” created by MCKIP right at their doorstep.
Among others, local businesses can either be involved in the fields of construction or investment, or engage in upstream and downstream activities that support the main players. MCKIP will also require transport & logistics services, trading services, training professionals as well as retail centres and F&B outlets to cater for those who work and live here. For this purpose, about 30 per cent of the MCKIP site will be allocated to the services sector, commercial and residential development.
“The multiplier effect of MCKIP will be felt across all sections of the community and it will bring about new economic prosperity that will contribute towards a better quality of life for everyone here in the region,” YAB Dato’ Sri Najib said.
Guangxi Beibu Gulf International Port Group will invest RM5 billion to establish an integrated steel plant, an aluminum processing plant and a palm oil refinery here in MCKIP, all of which will utilise the latest eco-friendly technology and operations management. Phase 1 of the three projects is scheduled for completion in 2015, at a cost of RM2 billion.
The palm oil refinery will be a joint venture collaboration between Guangxi Beibu Gulf International Port Group and Rimbunan Hijau Group. In addition, the Group also plans to invest in the oil & gas and petrochemical industry in the near future.
The plants are expected to employ 3,000 professional, managerial and knowledge workers as well as skilled and unskilled workers. The Group has committed to provide training for all levels of its workforce, and will collaborate with local training institutions for skills development. In addition, there will also be an internship programme for selected local youths at the Group’s existing plants in China. Manufactured products from these plants will be exported to markets in the ASEAN region, the Middle East, Europe, and the Americas.
At today’s event, Guangxi Beibu International Port Group also signed an MOU with IJM Corporation Berhad for their partnership in the expansion of Kuantan Port which will involve an investment of RM3 billion. IJM Corporation Berhad will hold 60% equity in this partnership, while Guangxi Beibu International Port Group will own the remaining 40% equity. The partnership will leverage on the Guangxi Beibu International Group’s expertise in operating four ports in the Guangxi Region to help increase the throughput at the expanded Kuantan Port.
The Kuantan Port expansion will involve the construction of a new deep water terminal that will allow vessels of up to 200,000 DWT to berth. When completed in 2015, Kuantan Port will have the capacity to handle 1.5 million TEUs and 14 million tonnes of bulk cargo per annum, which will enhance the port’s competitiveness as a regional shipping destination and trans-shipment hub. This will further strengthen Kuantan Port’s positioning as the strategic gateway to ASEAN, Far East and Asia Pacific markets, which have a combined population of four billion and a Gross Domestic Product of US$17 trillion.
In addition to these investments, another RM2.5 billion will be invested by the Master Developer of MCKIP, which is made up of a joint venture between a Malaysian consortium and China consortium. The Malaysian consortium consists of a public-private partnership spearheaded by SP Setia Berhad and Rimbunan Hijau Group in collaboration with the Pahang State Government. Together, they hold a 51 per cent equity interest in the joint venture entity.
The remaining 49 per cent is held by a Chinese consortium, which is led by the state-owned conglomerate Guangxi Beibu Gulf International Port Group with a 95% equity interest. The remaining 5 per cent in the consortium is held by the Qinzhou Investment Company.
The Master Developer will play a key role in constructing the major infrastructure within the park and providing the required amenities for the incoming investors into MCKIP.
To attract strategic emerging industries to the park, ECERDC is collaborating with the Ministry of International Trade and Industry, the Malaysian Investment Development Authority and the Pahang State Government to promote MCKIP to potential investors not only from China and Malaysia, but also from ASEAN region and beyond. Target industries for MCKIP include energy-saving and environment-friendly technologies, alternative and renewable energies, high-end equipment manufacturing and the manufacture of advanced materials.
“Bilateral trade between Malaysia and China is set to soar when the sister parks of MCKIP and QIP become operational. A distinct and competitive supply chain will emerge between them and there will be a cross border movement of manufactured goods, with Kuantan Port and Qinzhou Port serving as trans-shipment hubs redistributing goods to markets around the world,” said Dato’ Sri Najib.
Kuantan Port is Iocated in the ECER Special Economic Zone (ECER SEZ), a concentration of high impact projects which spans from Kertih in Terengganu to Pekan in Pahang. MCKIP will provide synergy to other major industrial parks in ECER SEZ, such as Pekan Automotive Park, Gambang Halal Park and Kuantan Integrated Bio-Park, as well as to Kuantan Port City and the development of harbour-related industries within the surrounding area.
ECER SEZ, which will account for about 90 per cent of the economic output of ECER, is well-served by modern transportation networks which include airports, major seaports, and a good network of roads and highways which provide good internal linkages.
In recent years, ECER has emerged as an attractive destination for investors enticed by its competitiveness and pro-business policies. In 2012, it recorded RM12 billion in committed investments, surpassing its original investment target of RM10 billion.