A SHARED TOMORROW

Malaysia 2016 | SABAH | INTERVIEW

TBY talks to Y.B. Datuk Raymond Tan Shu Kiah, Minister of Industrial Development for Sabah, on moving towards sustainability in Sabah's industrial sector, attracting outside investors, and increasing connectivity within the wider region.

Y.B. Datuk Raymond Tan Shu Kiah

What is the role of the Ministry of Industrial Development here in Sabah?

The role of Ministry of Industrial Development is critical to the development of Sabah in the context of Malaysia's drive for “developed economy” status by 2020 and also Sabah's own 2006-15 development blueprint to elevate the industry sector's share of the state GDP. Sabah does not want to continue to be an exporter of commodities. This is not sustainable. What we are trying to do now is to value-add to our timber, palm oil, biomass, crude oil and gas, as well as other resources to grow the manufacturing sector. Over the last 10 or 15 years, we have driven manufacturing and addressed infrastructure issues to attract more investments.

What changes are you implementing in the industry sectors to make them both more sustainable and profitable?

Countries do not have to sacrifice the environment for industrial growth. Instead, they can use technology to create growth. Profits and sustainability are both sides of the same coin. We have aggressive programs to encourage the optimization of resources such as in biomass and developing high-value derivative products from palm oil. Sabah is still 60% forest. Few countries are able to retain that percentage of forest. We maintain forest management through the right application of technology and the correct use of resources especially with palm oil. There has been much development in the area of recycling biomass, what we call “turning waste to wealth.” There are many downstream processes that we can undertake in a controlled environment. We are also introducing products that are from agro-based chemicals. This helps to supplement the plantations where 50% of their costs are in fertilizers and pesticides.

To what extent are you involved in the state energy projects?

We own Sipitang Oil and Gas Industrial Park (SOGIP), and we are actively soliciting investors from all over the world. SOGIP taps into the oil and gas produced in Sabah's off-shore fields. PETRONAS (Malaysia's national petroleum company) is the major investor for the moment. It owns and operates the SAMUR project, which produces ammonia and urea. The Sabah government is also a shareholder in SAMUR. We want to build up the industry through partnerships and we are reaching out to investors from Europe and the US that utilize green technology to make chemical products from gas and plantation by-products. The Malaysian government encourages small-scale energy production from renewable sources such as solar and biomass.

What are your primary markets, and what do you see as the economic potential for increasing regional connectivity?

We tailor our offerings based on the resources that we have, which are oil and gas, crude palm oil, biomass and timber. In addition, we also have farms culturing seaweed, prawns, and lobsters for export. Tourism is another asset, and is an industry in itself that offers many investment opportunities in hotel and resort development. Logistics and its related business also have huge potential because of the geographical location of Sabah in the center of ASEAN. We are located in the ASEAN sub-region of BIMP-EAGA (Brunei-Indonesia-Malaysia-Philippines East ASEAN Growth Area) and are within a four-hour flight radius of major business capitals such as China, Japan, Singapore and Korea. We have 10% of the ASEAN in the BIMP-EAGA region; therefore, we are talking about a market of 60 million, not just the 3 million of Sabah. The key is linking our resources through terrestrial, maritime and air connectivity. BIMP-EAGA supplies most of the world's coal and palm oil and is also a major producer of lauric oil, minerals, oil & gas, cocoa, rubber, and marine products. The BIMP-EAGA territories also have World Heritage sites, and we are promoting our destinations together. Maritime connectivity will help develop more efficient shipping services, which are critical to the development of industries and bringing the manufactured products to the world.