2/7/2012 — Business Times
The East Coast Economic Region (ECER) has targeted to double its investments to RM10 billion this year, underpinned by interest from top Asian communities like China.
Its industrial parks located within the Special Economic Zone (SEZ) are expected to drive these billion-ringgit investments.
The SEZ will be “our jewel in the crown” in Malaysia, says ECER Council (ECERC) chief executive officer Datuk Jebasingam Issace John.
“We expect the investments to come on board by the third quarter,” he disclosed in an interview with the Business Times.
The risks of the slowing investment flow from Europe may impact Malaysia as a whole in 2012, but John says the ECER has the added advantage of having caught the attention of the Chinese, Koreans and Japanese, who are also being encouraged to look abroad.
Its location is an advantage, which would benefit China’s investing community. Among the most recent influx of investments totalling close to RM5 billion include a RM2 billion industrial biotechnology investment in CJ-Arkema, a joint venture between a South Korean and French company, as well as Wenzhou Foreign Trade and Economic Cooperation Bureau’s plan to invest RM900 million in integrated industrial park in Kuantan.
The other is the RM1.8 billion integrated steel mill investment via Eastern Steel, a joint venture between Hiap Teck Venture Bhd and China’s Shougang Group.
“Being the hinterland to East Asia is one good reason as it provides an inter-regional hub for China-India as an eastern gateway of Malaysia,” John said.
With the RM2 billion basic infrastructure put in place by the government, the ECERC is aggressive in marketing the economic corridor to Asian and Middle East investors, while focusing on individual companies like it did in the case of Eastern Steel last year.
Being just two hours away from Kuala Lumpur, the 25km-by-140km strip that extends from Kertih in Terengganu to Pekan in Pahang includes four ports, two airports and innovation zones to support development in manufacturing, oil, gas and petrochemical, agriculture, tourism and education.
“To our investors, it is a RM4 billion market within the Asia-Pacific region, especially since the commitment to convert Kuantan into a deepwater port,” John said.
Into its fourth year since it was set up, the low-key ECERC reckons its potential will enable it to perform as well as the other growth corridors, if not outperform them.
Straddling Kelantan, Terengganu and Pahang as well as Mersing in Johor, it is emerging as a dynamic and competitive investment destination to both local and international investors.
Being a mix of brownfield and greenfield is an added advantage, said John.
“The region may be lagging but at least we can differentiate ourselves from the others in that with our greenfield, potential investors can undertake sustainable-type models and develop the ECER in a sustainable manner,” he said.
Unlike the other growth corridors, the ECER has various challenges which, John says, need to be positioned in the correct perspective.
“We need to accelerate growth, increase income levels and improve quality of lives. So, projects in ECER need to ensure significant contribution to GNI (gross national income) through job creation which will raise income levels – which impact measurements are in line with the Economic Transformation Programme,” he said.
SEZs contribute to 80 per cent of the gross domestic product of the region, where the income disparity is high compared to the west coast.
Poverty programmes are ongoing with the Pekan metropolitan in the advanced stage, enabling incomes to rise to RM1,200 already.
John said that the human resource aspect is catered to the niche needs of investors.
“Within the one-and-a half years of investors setting up their facilities, ECERC will see to it that their manpower aspect is provided for, through training skills provided by the 20 centres and universities and colleges to custom fit their needs,” he said.
According to John, the time is ripe for SEZ as it is the only one of its kind offering integrated projects from ports to manufacturing, while many infrastructure projects are near completion with many customised incentives already in place.
The SEZ has targeted a total of RM90 billion investments by year 2020 and will be a catalyst for economic growth, in line with the government’s aspirations of moving into the New Economic Model.
The Automotive Industrial Park in Pekan-Peramu area is a self-contained park to cater for automotive manufacturing and assembly activities. The park has so far attracted big automotive names such as Mercedes, Isuzu, Suzuki and now Volkswagen.
Apart from the palm oil industrial cluster in Gebeng, there is the Kertih Polymer Park, the country’s first fully integrated plastics park, that takes on a plug-and-play model where requisite support facilities and common services are put in place.
Also within the SEZ is the Gambang Halal Park, a premier park which can create RM1 billion investments almost immediately as there is feedstock of livestock, fishers readily available.
“We got interest from China and Middle East and hope by end of the year to see significant movements,” John said.
He said the Kemaman heavy industrial park can take up RM5 billion in new investments, following closely on the heels of Eastern Steel’s ground breaking in December.
Tourism will also be a major income earner to the region, as seen in an investment of RM2 billion from the government for the infrastructure development of industrial parks and social development projects.