New book: Sarawak most attractive place for investment

KUCHING: Sarawak this year could probably be the most attractive investment destination in Southeast Asia thanks to the abundance of low-cost energy and very clearly mapped-out industrial development plan, especially in Sarawak Corridor of Renewable Energy (SCORE).

This was indicated in a new book on Sarawak just produced by global publishing, research and consultancy firm, Oxford Business Group (OBG) that was launched by Yang di-Pertua Negeri Tun Pehin Sri Abdul Taib Mahmud at the State Legislative Assembly Complex’s Banquet Hall yesterday.

‘The Report: Sarawak 2015’ mapped out the resource-rich state’s drive to develop its value-added industries as a means of diversifying the economy away from extraction.

It provided detailed analysis of the sectors that are supporting the state as it broadens its economic base, including transport, construction, retail and agriculture.

It also shone the spotlight on SCORE, charting the interest that the initiative was generating amongst investors attracted by the availability of plentiful and competitively-priced energy.

OBG’s managing editor for Asia, Paulius Kuncinas, in his presentation on ‘Key Findings: From Vision to Reality’, emphasised that investors, since 2007, placed a high premium on stability and predictability which thus put Sarawak in a very good position compared to its neighbours.

“Sarawak’s stable policy and business environment plays a crucial role in attracting long term capital,” he said, pointing out that long term power purchasing agreements and incentives offered by Sarawak were simply too good to be ignored by aluminium, iron, copper, steel and other sectors.

SCORE has managed to defy many sceptics, he stressed, to emerge as Malaysia’s No. 1 economic growth corridor, outperforming its peers in the regional corridors in the last three to four years.

“It offers new jobs, plenty of new investments and opportunities for new companies to operate in the corridor,” he said.

“SCORE being the key project and main catalyst for growth and industrialisation has indeed exceeded investors’ expectations,” he added.

Blessed with abundance of hydro, coal and gas resources for creation of renewable energy, Kuncinas added, Sarawak has an undisputable advantage compared to its neighbours.

“The new hydro electric projects positioned the state within the potential to become a central provider of power in the proud proposed Asean power grid,” he said, adding that neighbouring Indonesia, Sabah and Brunei were all looking to buy power from Sarawak.

“It has leveraged disadvantage to produce bulk powers at competitive prices and attracted capital intensive investment in heavy industries,” he added.

Although export commitments were still low as priority was for local households, commercial and industrial consumptions, Paulius emphasised that coal and gas would continue to play a role in the generation mix in the future.

Sarawak, he said, is Malaysia’s ‘sweet spot’ in terms of investment due to rapid development; one of the most open, vicinity to the Asean markets, clearly defined industrialisation and development map, has access to ample energy resources and natural resources and sits in the neighbourhood of 600 million people.

However, Kuncinas also named the challenges faced by Sarawak as it strived to become a developed state, including increasing income levels, developing local skills, unlocking knowledge based economy and revising up the value chain.

“Sarawak’s success in delivery growth will crucially depend on its physical road, water and air connectivity as free trade agreements continue to break down across the borders,” he said.

Noting the substantial progress unleashed by SCORE projects especially in rural areas, Paulius however said there was room for improvement for air connectivity and plenty of scope for improvement in water transportation which remains a key element in Sarawak’s logistical development.

“Generally, rural and cross island connectivity is still a major bottleneck for companies wishing to move goods across the island,” he explained.

“We also believe the participation of foreign and multinational companies and projects such as SCORE will help to address this issue through knowledge transfer and technology and capital,” he said.

Meanwhile, OBG chief executive officer (CEO) Andrew Jeffreys highlighted that in today’s busy global media, OBG offered careful in-depth analysis and balanced assessment to provide compelling insights which alert readers to investment opportunities on the ground.

“This is by far the most accurate and comprehensive economic study that is available on Sarawak,” he said, adding that OBG also produced online economic updates that were read by subscribers across the globe.

Jeffreys pointed out their reports have growing audiences in financial and industrial communities, in universities as well as governments and diplomatic circle.

This report, he added, was the combined efforts of so many and now available to use.

“This is our testament to the international community. This report tells us that Sarawak offers us serious business case,” he said.

In thanking Taib and Chief Minister Datuk Patinggi Tan Sri Adenan Satem for their contributions in order to successfully produce the extensive and significant report, Jeffreys emphasised that their presence clearly indicated a continued commitment to attract foreign investments to Sarawak.

Notable contributors include state secretary Tan Sri Datuk Amar Morshidi Abdul Ghani, Regional Corridor Development Authority (Recoda) chief executive officer Tan Sri Datuk Amar Wilson Baya Dandot, Second Resource Planning and Environment Minister Datuk Amar Awang Tengah Ali Hasan, Sarawak Energy Bhd (SEB), Cahya Mata Sarawak (CMS), Press Metal Bhd, Samalaju Industries and Tokoyama Malaysia, among others.