Investment Focus for ECER in 2010

1/2/2010 — Press Release
The East Coast Economic Region (ECER) is riding on the improving global economic climate to score investments both domestic and foreign by showcasing its high impact projects nurtured over the past two years.
Not surprising that the upcoming year holds a special meaning to the Chief Executive Officer of ECER Development Council (ECERDC) Dato’ Jebasingam Issace John as 2010 marks not just the fruition of many ECER’s planned projects but also heralds a more focused approach by the Council to increase private sector’s participation in the ECER.
With the number of projects implemented in the ECER to be in tandem with the foreign and domestic investments generated thus far, Dato’ Issace sees this as a good reflection of the overall investor sentiment – that the Region is brimming with potential.
As of 31 December 2009, a total of 64 out of 82 ECER projects allocated within the Ninth Malaysia Plan (9MP) had already begun; with the balance 18 expected to commence in 2010.
Not surprising that the ECER has to date attracted a total of RM26 billion in expressed and committed investments, from both local and foreign investors.
The past year also saw the Council launching its jewel in the crown in the form of ECER’s Special Economic Zone (SEZ), an integrated development zone stretching from Kertih, Chukai, Kuantan Port City, Kuantan, Gambang to Pekan and Tg Agas in the south. It comes with special packages of customised incentives to further boost the region’s economy.
In addition to economic growth, strong emphasis has been placed on improving infrastructure as well as initiating social development programmes to eradicate hardcore poverty and increasing the competitiveness of ECER’s pool of human capital.
We talked to the CEO of ECERDC on the prospects of 2010 and what it means to one of Malaysia’s most progressive and diverse economic development programme that is ECER.
1.    How has the past two years been to the ECER as a whole and why is the upcoming year deemed crucial for the region?
“The year 2009 saw the kick off of many planned projects for the benefit of local population. These projects will therefore escalate in 2010 which coincidentally marks the end of 9MP.
In Pahang, of the total 42 projects approved under 9MP, 38 commenced before the end of 2009 with the last four projects commencing early 2010. In Terengganu, 30 projects had begun with 8 to start early 2010 while 33 out of a total of 38 projects in Kelantan had been implemented.
In Mersing, 7 projects out of a total of 10 had started by end of 2009 with the balance 3 to begin in early 2010.
These projects range from ECER’s five economic clusters and enablers of tourism, agriculture, manufacturing, education and infrastructure as well as social development projects to enhance the quality of life for the poor.
Spearheading the push for development is the ECER’s Special Economic Zone (SEZ), an integrated development zone that is supported by good infrastructure that will allow us to pitch the region competitively for investor attention.
To date, about 65.9% of ECER’s projects have taken off the ground, which include:
•    Pekan Peramu Automotive Industrial Park
•    Gambang Halal Park
•    The integrated development of Kuantan Port City and Kuantan Port Free Zone
•    Kertih Polymer Park, which is Malaysia’s first fully-integrated plastics park
•    Pantai Sepat Tourism Town
•    Kemaman Heavy Industrial Park
•    Tg. Agas Maritime Industrial Hub & Free Zone, and
•    Agropolitan projects.
The upcoming 2010 therefore marks not just the fruition of many ECER’s planned projects; it also heralds a more focused approach by the Council to increase the private sector’s participation in the ECER, and bring further developments to the people of the Region.”
2.    How much progress has the SEZ made since its launch in August 2009? 
“It is still in its early days. We expect the SEZ to gain traction as the projects’ momentum escalates.
In the Kuantan Port and Port City project, several infrastructure projects have begun to address issues such as water supply and traffic.
The projects include the upgrade of a 12km road from Jabor-Jerangau to Sungai Ular; the construction of a new water treatment plant in Felda Panching Timur and the installation of new 2km water pipes within the Gebeng Industrial Area.
In the Pekan-Peramu automotive hub, construction of the Central Marketing Centre will commence in Q1 2010 while land and infrastructure development will start within the second half of 2010. This will foster a plug-and-play concept within the automotive park.
Infrastructure road works for the Tg. Agas Gas and Maritime Park will be completed by early 2011. Several investors have signed lease agreements and memorandums of understanding, pending the completion of the park’s infrastructure.
To make the Kertih Polymer Park more attractive to investors, the ECERDC has begun infrastructure development, with Phase 1A and 1B totalling 35.5 ha undergoing earthwork while basic infrastructure development under Phase 1C will start in Q1 2010.
Studies on a multipurpose zone and SME buildings started end 2009 while a KPP park manager is expected to be appointed by February 2010.”
3.    With an existing concentration of mature industries already operating in ECER SEZ, which would make it a safer yet lucrative bet for investors, what are some of the SEZ projects worth considering?
“There are several existing projects within the ECER SEZ that the investors might find highly lucrative yet safe for investment.
As Malaysia’s first fully integrated plastics and polymer park, the Kertih Polymer Park (KPP) is now ready for occupancy within its 140 ha of land area. Set up to promote a plug-and-play concept, KPP taps into the potential synergies from integration with the nearby Kertih Integrated Petrochemical Complex in Terengganu.
The park has drawn immediate commitments of RM565m in investments. Hi Essence Cable Sdn Bhd and MIE Copper Sdn Bhd, manufacturers of cable and wire, are investing RM85 million and RM20 million respectively; Latenfield Pipe Industries Sdn Bhd RM40 million; while FMD Polypipes Industry Sdn Bhd will invest RM125 million for a heavy duty bags and pipes plant.
The Kertih Plastics Park is expected to be fully operational in 2015, attracting RM2 billion worth of investments and creating more than 7,000 jobs.
At the Pekan Automotive Industrial Park, with the planned upgrades in infrastructure and landscaping as well as the setting of a Central Marketing Centre within 2010, we expect it to be more competitive in attracting other global auto carmakers.
DRB-HICOM for instance, the main player at the automotive park, is aiming for a bigger role within the local automotive landscape in line with the coming upgrades of the park. Over the past 25 years, DRB-HICOM and its partners have invested a total of RM1bil and produced over 480,000 cars at the park.
As a whole, the park is expected to generate over RM4 billion in investments throughout its four stages of development and create a total of 10,580 jobs.
Feasibility studies for the Gambang Halal Park have also begun. The project’s design and land infrastructure development are expected to commence by May 2010. When completed, the park will host food and non-food industries produced in accordance with Syariah principles. It will also house incubation centres for small and micro-food enterprises.
With the infrastructure road works for the Tg. Agas Gas and Maritime Park expected to be completed by early 2011, several investors have signed lease agreements and memorandums of understanding in anticipation of the completion of the park’s infrastructure.
In tourism, the coastal towns of Cherating and Pantai Sepat will be transformed into premier tourism destinations beginning 2010. We are looking for investors to construct budget, mid-tier and luxury hotels; handicraft shops, even seafood restaurants.
Meanwhile, Pekan has also been marked for eco-tourism and heritage-based tourism. Enhancements to the royal town which will kick off in 2010, involve its historical sites, kampung areas and the riverfront, as well as creating tourist activities such as heritage trails and angling competitions.”
4.    Outside of SEZ, it is understood that the rest of ECER will act as hinterland catchment areas to supply feedstock to support the development of projects within SEZ. What other key viable projects outside of SEZ that may be of interest to investors?
“While the SEZ’s focus is on manufacturing and industrial activities, projects for the tourism and agriculture clusters will indeed continue uninterrupted outside the SEZ. Some of the key projects we hope to showcase to potential investors include:
In Agriculture:
The Muadzam Shah Cattle Research and Innovation Centre will be built in May 2010 to accommodate 1,300 breeders and bulls as a means to reduce dependency on imported cattle stock. Other livestock projects include a cattle multiplier farm in Ulu Lepar, a commercial cattle feedlot in Lipis and Maran as well as an animal feed industry in Gebeng.
Two Fish Seed Production and Marketing Centres will commence operations by 2011. Based in Raub for freshwater fish and Merchong for marine fish, these hatchery centres will produce at least 13.5 million fingerlings of various commercial species including grouper, seabass, tilapia, patin and kelah. The Kuantan Fish Processing Park meanwhile will commence operations by July 2010 to support other downstream fisheries activities.
Construction for an integrated pineapple plantation in Rompin will also commence by July 2010. This 5,000-acre commercial farm will produce over 74,000 metric tonnes of pineapples for domestic and export markets.
Terengganu has also attracted a total of RM85 million in investments in Ulu Tersat for the country’s largest goat and mutton production centre.
In Tourism:
We have designated some 106 ha in Teluk Bidara, Dungun to be built with high-quality hotels, resorts and chalets. We will equip the area with tourist-friendly facilities such as beachfront pedestrian walk, heritage village and landscaping.
To boost the city’s tourism pull, Kuala Terengganu City Centre’s construction as an integrated waterfront heritage city will begin within the second half of 2010.
To enhance the region’s natural tourism resources, Gua Musang and Kuala Krai will be developed as an eco-tourism destination, forming a part of the Lanchang – Kuala Lipis adventure trail.
ECER will also elevate the Kuala Gandah Elephant Sanctuary in Pahang into a world-class elephant conservation and education facility.”
5.    ECER is also about bringing direct benefits to the local population via social development programmes. What are some social projects that would appeal to the private organisations looking to give back to society?
“Within the Social Development cluster, the ECER’s Agropolitan projects are designed to eradicate hardcore poverty, involving resettlements and providing participants with commercially viable economic activities such as farming sheep, palm oil, cocoa and herbs.
These projects in Pekan, as well as in North and South Kelantan have already commenced, while the project in Besut-Setiu will commence before mid 2010.
With 25,000 sheep expected by the end of 2010, Pekan is poised to become Asia’s largest concentration of sheep within a single location. It will create 5,000 new jobs and elevate the hardcore poor’s monthly household income from RM300 to RM1,500.
The Suri@Home, a social programme to create income for poor women and single mothers by working from home, has also been introduced in Pekan with more programmes to be undertaken in Q1 2010.
Projects identified for implementation include mushroom, leech, jasmine flower and organic chicken farming, vermicompost cultivation, handicraft, duck eggs production, songket weaving, siakap nursery and homestay support activities. It will create over 300 jobs annually once fully implemented.
The KerJaya, ECER’s flagship human capital development programme to create skilled and trained workers, and match companies to requisite manpower, had also started in 2009.
This will reverse the brain drain out of ECER, give skilled and trained workers a good reason to come back and serve within the ECER states as well as boost economic growth and reduce the current rate of unemployment within the region. ECER is targeting to place some 1,350 workers under this programme.
Also underway is the Franchise Development Programme under the ECER’s Bumiputera Commercial and Industrial Community (BCIC) initiative which will nurture at least 100 franchisees by 2010.”
6.    Critics have claimed that economic corridors are slow in their implementation. Your comments please. 
“While the current global economic climate has taken a slight toll on investments, ECER projects are making steady progress, especially in terms of getting the proper framework and strategies as well as implementation plans ready.
The ECER therefore is still on target to meet its vision and mission for a developed region by year 2020.This is evidenced in the number of projects which have taken off on the ground. However, it is only natural that visible results of these projects will need time.”
7.    Given that the Prime Minister has given his assurance that the Government is fully committed to the successful implementation of the ECER projects, what are ECERDC’s main priorities within the next immediate term?
“ECERDC’s main priorities remain clear, which is to transform the East Coast states into a developed region by 2020 and I think we have made inroads in this ongoing goal.
As ECER is an apolitical project, it brings development to all the people in the East Coast, regardless of political persuasion. And because each state has its own particular economic competitive advantage, the development focus in each state is therefore different.
ECER’s projects are also people-centric, meant to create business opportunities, stimulate jobs and elevate domestic incomes. They will also boost human capital development and enhance skills within this region.
All these will hopefully elevate the standard of living for its local population and bring continuous benefit to the present and future generations.
We are also determined to pursue with the development of the ECER and to succeed, we not only have to strive harder, but also be more resourceful in devising creative and innovative approaches and solutions to counter the effects of the economic challenges.
This include doubling our marketing and promotions efforts, including domestic roadshows and overseas trade missions to generate more local and foreign investments, as well as increase participation from SMEs.
Realising that this requires a collective effort from all parties, I therefore call on all ECER stakeholders, including both the federal and state governments, the private sectors as well as the general public to harness the region’s fullest potential.
Let us all rally behind ECERDC and contribute positively in uplifting the lives of the local people and elevate their standards of living, for the benefit of future generations.”