2/19/2011 — The Star
The emphasis of the East Coast Economic Region (ECER) Development Council this year will be to ensure that the infrastructure projects and programmes being undertaken are completed on time and that it continues to attract more domestic and foreign investments into ECER, says the council’s chief executive officer Datuk Jebasingam Issace John.
Last December, Prime Minister Datuk Seri Najib Tun Razak said ECER had attracted RM36.5bil in investments, domestically and from overseas, since its inception in October 2007 until November 2010. Of that amount, RM15.3bil had been received. ECER covers Kelantan, Terengganu, Pahang and Mersing in Johor.
The council has been able to attract RM12bil per annum on average despite its annual key performance target to attract RM5bil, says Jebasingam.
“When we refer to the amount received (RM15.3bil), it means that the projects have taken off. For the remaining sum, we are waiting for commencements of the operations. These investments will come on stream by 2012 and in addition, we are in discussion for other new investments as well,” he told StarBizWeek.
The three investor pools earmarked by the council include the Middle East, China and India.
“We have been very active in the Middle East (with two missions to date) and our first trip to China was in the fourth quarter of last year,” he says.
The council seeks Middle Eastern investors for three key ECER clusters – oil and gas, tourism and halal products, which include food and non-food like cosmetics and pharmaceuticals. Meanwhile, investors from China may be keen to invest in the agriculture and tourism clusters, while preliminary discussions with Indian investors have led the council to note agriculture as a potential attraction.
“There is good potential in agriculture, both in terms of machinery and plants. Basically, we tell potential investors that ECER, particularly the Special Economic Zone, is not just limited to the Malaysian market but serves as a gateway to the Asean and Asia-Pacific markets,” says Jebasingam.
He adds that the cost of doing business is competitive for investors as they are provided land-based infrastructure at competitive pricing coupled with attractive fiscal incentives.“When we talk to investors in China, they have a lot of market demand in Indonesia. So if they position themselves here, they can serve the Asean market, which includes Indonesia,” he says.
The ECER has its own special incentive package and with the availability of the package, the manufacturing cluster has attracted RM585mil, the tourism cluster has attracted RM1.5bil and the agriculture cluster has attracted RM100mil in the last year, says Jebasingam.
The council seeks investment opportunities using two methods. It works with the Ministry of International Trade and Industry (MITI) and Malaysian Industrial Development Authority (MIDA) in promotional missions, and it also has its own direct engagements.
“On our recent trip to the Middle East, we had already targeted who we wanted to meet and had meetings arranged with high net worth individuals for the industrial clusters,” says Jebasingam.
The council made a trip in late January to the Middle East to launch the “Invest Malaysia 2011” forum aimed at attracting potential investors for the ECER-Special Economic Zone, which has been dubbed the Klang Valley of the East Coast.
The Special Economic Zone is an integrated development zone with new townships and international tourism sites, served by four ports, two airports and knowledge innovation zones. Stretching from Kertih, Terengganu, to Pekan, Pahang, it has eight manufacturing zones, four free zones and four tourism zones.
It was reported that ECER’s recent second investment mission to the United Arab Emirates and Saudi Arabia was to attract investments of up to RM1bil.
“We have made some good contacts and met individuals and companies from the Middle East that have shown interest in the East Coast. More so because they are comfortable with Malaysia as this region is very resources based in terms of oil and gas, agriculture, and tourism,” says Jebasingam.
He adds that the council was in various stages of discussions for the RM1bil investments from Middle Eastern investors, which would probably be channelled into the tourism and agriculture clusters.
“The first quarter of next year would be a more realistic time frame for these investments to come on stream,” he says.
One notable deal struck last October involving a Middle Eastern company was a RM620mil investment by Dubai-based Oilfields Supply Center Ltd and Tanjong Agas Supply Base and Marine Services Sdn Bhd for a joint venture agreement to build, own, manage and operate a multi-functional common user supply base.
Jebasingam says the council acts as a point of contact to bring in investments to the region. “We work very closely with the state governments. The MBs (menteri besar) are on our board and also chair our implementation coordination committee. Through this mechanism, we can fast-track our approval process and we have an investment task force with Finance Ministry, MITI and MIDA representatives. We make a recommendation and it goes to the national committee for investments, chaired by MIDA, for speedy approval of applications for the fiscal incentives,” he adds.
On the council’s biggest challenge in attracting investors, Jebasingam says more awareness needs to be created.
“We have not marketed enough based on feedback that we’ve received from our trips to China, Singapore and the Middle East. We need to create more awareness and the potential ECER holds for these investors. We took the first one and a half years to set up the systems, processes and infrastructure. So it was only in 2010 that we were able to market and promote this region,” he adds.
Focus on delivery, investments in ECER
2/19/2011 — The Star