Sabah
From The Report: Malaysia 2014
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Sabah is a dynamic area for growth, new discoveries and investments. Sabah is one of the five regional development corridors and hosts a number of sectors that fall under the federal government’s National Key Economic Areas, such as oil palm and rubber, among others. Services accounted for 47.4% of the state’s 2012 GDP, followed by agriculture with 20.8%; mining and quarrying, 20.7%; manufacturing, 7.9%; and construction, 2.9%. Tourism is also a growing sector; the state brought in $1.98bn in tourism revenues in 2013, up from $1.72bn in 2012. To encourage further development the government has put a set of tax incentives in place. However, varied terrain and inadequate transportation networks make coordination difficult and hinder development efforts. Bolstering infrastructure and talent is key to moving Sabah forward, and there are plenty of indicators that the state and federal governments are active on these fronts. This chapter contains interviews with Musa Aman, Chief Minister of Sabah; Mohd Yaakub Johari, President and Chief Executive, Sabah Economic Development and Investment Authority (SEDIA); Abdul Kadir bin Abdullah, CEO, Sipitang Oil and Gas Industrial Park (SOGIP); Faisyal Hamdain Diego, Chairman, Suria Capital Holdings; Johnson Koh Yong Siang, Executive Director, Waterfront Urban Development; and KP Kuok, Executive Director, Pacific Sanctuary Holdings.

Articles from this Chapter

Overview

New horizons: Attracting substantial domestic and international investment is a major priority
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Known as the “Land Beneath the Wind”, Sabah is undergoing some important changes these days, with its economy gearing up for a major stride forwards. Previously one of Malaysia’s poorest states, it is now a dynamic area for growth with new discoveries and investments in oil and gas, the development of a downstream industry for palm oil, and a range of new agricultural and manufacturing projects in everything from shrimp farming to petrochemicals. One of five regional development corridors,…

Interview

OBG talks to Musa Aman, Chief Minister of Sabah
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Interview:Musa Aman What kind of policy is being shaped to support downstream industrial development? MUSA AMAN: Since 2012 tax incentives have been available for investment in Sabah Development Corridor (SDC) flagship projects, several of which encourage downstream activities, notably the Palm Oil Industrial Clusters, Sabah Agro-Industrial Precinct, Sipitang Oil and Gas Industrial Park, Interior Livestock Valley, and Marine Integrated Cluster. Incentives include full exemption on statutory…

Interview

OBG talks to Mohd Yaakub Johari, President and Chief Executive, Sabah Economic Development and Investment Authority (SEDIA)
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Interview:Mohd Yaakub Johari What are the goals for Phase II of the Sabah Development Corridor (SDC)? MOHD YAAKUB JOHARI: Phase I of the SDC was dedicated to decreasing poverty and improving infrastructure to support economic activity. To this end, we developed container facilities; roads; buildings for livestock, dairy farming and other agro-industries; and training facilities. Many successful projects have come out of these goals, including the Palm Oil Industrial Cluster (POIC), the Sipitang…

Overview

Always welcome: From nature treks to medical treatments, the state has something to offer every visitor
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Possessing the highest mountain in Malaysia, along with its deepest canyon, Sabah offers visitors some truly spectacular attractions. Its forests contain unique flora and fauna, its coasts world-renowned beaches, and its vibrant towns and cities offer a welcoming and multi-cultural panorama. Leveraging these gifts with increasing success in recent years has been a tourism sector that is also benefitting from increased state and federal attention, as well as private sector investment. Numbers are…

Overview

Diverse offerings: By playing to the state’s competitive advantages in raw materials and human resources, local industries continue to grow and diversify
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Sabah enjoyed the third-highest level of domestic investment in the manufacturing sector of any Malaysian state in 2013 and this carried over to the first few months of 2014. Foreign investment, however, has lagged somewhat, and remedying this shortfall is a priority for state and federal authorities. A number of industrial parks and clusters are available, as the government tries to match manufacturing development with the raw materials that the state has to offer. Sabah provides an abundant supply…

Interview

OBG talks to Abdul Kadir bin Abdullah, CEO, Sipitang Oil and Gas Industrial Park (SOGIP)
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Interview:Abdul Kadir bin Abdullah What can Sabah do to draw more foreign investors? ABDUL KADIR BIN ABDULLAH: The single most important thing for attracting investors is flexibility. They often have countless sites to choose from, so one seemingly minor problem has the potential to spoil a huge venture. Kota Kinabalu Industrial Park has been highly successful in providing facilities for local small and medium-sized enterprises by providing ready-built factories on plotted land. Since petrochemicals…

Overview

Getting around: The country is carrying out multiple transport infrastructure upgrades
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With its coastline bordering three seas and its capital just three hours flying time from a host of Asian financial, business and political centres, Sabah is a natural international transportation nexus. However, with 3.5m people spread across nearly 74,000 sq km of some of the most varied – and often difficult – terrain in the world, the state also presents a major transportation challenge. Sabah is the most distant Malaysian state from that country’s economic and political centre of Kuala…

Interview

OBG talks to Faisyal Hamdain Diego, Chairman, Suria Capital Holdings
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Interview:Faisyal Hamdain Diego What progress has been made in terms of establishing Sabah as a key trading hub? FAISYAL HAMDAIN DIEGO: While Sabah has not yet become a major hub for regional trading, container cargo volumes in Kota Kinabalu continue to increase year-by-year. Furthermore, trade volume in the state overall has held steady in the last year despite growing competition and a shaky global environment. A big area of potential growth is in the logistics and bunkering segments, which…

Overview

From all angles: The state expands and diversifies its energy mix
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Blessed with major oil and gas reserves offshore, and a growing oil palm-based biofuel industry onshore, Sabah has an enviable range of energy prospects. Add coal reserves, some promising solar energy sites, geothermal and hydroelectric power, and the state has more than enough potential energy sources to propel its economy further up the value chain. Yet the state also has some of Malaysia’s most difficult terrain to negotiate, and its more energy-hungry communities are often widely dispersed.…

Overview

Green thumb: The state is exploring new agricultural segments
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Employing around one-third of the state’s population while contributing about a quarter of its GDP, agriculture has long been a lynchpin of Sabah’s economy. At the same time, the plantations sector has recently developed not only as a provider of food but of fuel, making the oil palm segment a key player in the state’s energy plans. The use of palm oil as a biofuel is also being supplemented by the development of downstream processing of this versatile product. Sabah also benefits from the…

Overview

Standing tall: New large-scale developments offer opportunities in the residential, retail and commercial segments
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With property development now the third-largest contributor to gross development value (GDV) in Sabah, after palm oil and oil and gas, the state’s construction and real estate sector is a major pillar of the local economy. Concentrated on the west coast, particularly in and around the capital, Kota Kinabalu, real estate prices have risen in recent years to place Sabah among the most expensive states in Malaysia. Investment has been flooding in, too, with the skyline of Kota Kinabalu and other major…

Interview

OBG talks to Johnson Koh Yong Siang, Executive Director, Waterfront Urban Development
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Interview:Johnson Koh Yong Siang How can Kota Kinabalu (KK) real estate developers help attract more tourists? JOHNSON KOH YONG SIANG: KK already has ample assets for successful tourism. It is situated in a prime location and has quick access to nearby islands, beaches and mountains. In my opinion, the city is one of the best locations in the world from which to watch sunsets. The factor that unites all of these criteria is ease of access. My goal is for KK to be the central point for an…

Interview

OBG talks to Khoon Ping Kuok, Executive Director, Pacific Sanctuary Holdings
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Interview: Khoon Ping Kuok How would you describe the overall environment for developers in Sabah? KHOON PING KUOK: As an outsider coming to Sabah, the overall experience is generally positive. It is easy to do business here and the atmosphere is welcoming. In addition, there is racial harmony and a low crime rate, and the state has a progressive government with a good vision for the future. At the same time, the authorities have been wise to expand the city into new areas and focus on green projects…

Overview

An educated force: Providing learning opportunities for development
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With Sabah placing the development of human capital and innovation at the centre of its future wealth creation, health and education have undergone a major boost in recent years. The sectors have also become major targets for investment. All this is being strongly assisted by both the state and federal authorities, which aim to see the private sector take more of a role in these key areas. Major development plans – such as the Sabah Development Corridor (SDC) and the national Economic Transformation…