Sabah needs to introduce attractive investment policies
04 Sep 2023
The state government needs to be more proactive, especially to introduce policies which are more attractive and competitive to attract Foreign Direct Investment (FDI), if it aspires to develop its palm oil downstream industry.
This is the view of Datuk Hong Ngit Ming, Executive Chairman of Teck Guan Group (Teck Guan).
He especially opines that Sabah has huge potential to develop the oleochemicals industry.
“This is due to the fact that Sabah has huge resources such as palm oil, palm kernel oil (PKO), palm kernel meals (PKM), minerals, etc for the palm oil downstream industry use,” he said.
Hong said for a start, the state government could seriously consider giving tax exemption for investors who set up palm oil downstream manufacturing plants in Sabah.
“If nothing is being done by Sabah, no foreign investor would want to come to Sabah to invest in palm oil downstream industry, like oleochemicals manufacturing, while Sabah continues to face huge competition from Indonesia, due to their lower cost of raw materials,” he said in a statement on Monday.
Hong added Teck Guan which had invested heavily in the oleochemicals manufacturing in Rugao, Nantong City, Jiangsu Province China, since 2005, would be more than willing to have an indepth discussion with the state government, and the relevant agencies, at the right forum, on what are the best approaches to attract investors from China, including oleochemicals manufacturers from Rugao, to invest in Sabah, in order to help develop its palm oil downstream industry.
Oleochemicals are chemical compounds derived from natural fats and oils, including palm oil, that can be used as raw materials or as supplemental materials in a variety of industries. Oleochemicals can be used as a substitute for petroleum-based products known as petrochemicals.
Hong was responding to questions from the local media, in regards to Teck Guan’s effort in facilitating the recent visit by the delegation of the municipal government of Nantong Rugao, Jiangsu Province, to Sabah, in middle of last month, with the chief aim of exploring investment potential in Sabah.
Leading the said delegation was Wang Minghao, Mayor of Rugao City, who was accompanied by senior officials including Xu Wei, the Vice Mayor cum Director of The Management Committee of Rugao Port Industrial Park, Qiu Dehua, Director of Rugao Local Financial Regulatory Administration, and She Fei, Director of Rugao Business Bureau, among others.
Through Hong’s arrangement, the delegation also had a cordial and insightful exchange with Phoong Jin Zhe, Sabah Minister of Industrial Development & Entrepreneurship (MID), as well as senior officials of various key state government departments and agencies, such as the Kota Kinabalu Industrial Park (KKIP), Palm Oil Industrial Cluster (POIC), Sabah Oil and Gas Terminal (SOGT), and leaders of Sabah businesses and industries, during the meeting cum dialogue held at the MID conference room.
Hong said if given the necessary support by the state government, some major players in the Rugao manufacturing sector might seriously consider expanding their operations to Sabah.
He also hoped the state government, the MID especially, could fully capitalise on Sabah’s vast natural resources and its strategic location in the region, to better attract FDI to Sabah, to help transform the state into a robust manufacturing and distribution hub for the region.
“Sabah with its vast natural resources, palm oil especially, coupled with its strategic location, would be an ideal destination for those manufacturing industries in Rugao which could use our natural resources.
“If properly planned and executed, Sabah can be turned into an ideal manufacturing and distribution hub, for a wide-range of oleochemicals products, for ASEAN countries. This would also allow us to capture the Indonesian market, which is enormous.
“This would certainly benefit Sabah in many ways, including transfer of technology and job creations which would stimulate the state economy and developments,” he explained.
Hong went on to note that during the exchange session, Wang said he was impressed with Sabah’s vast natural resources, especially its huge oil palm production, and that Sabah has vast potential for collaboration with Rugao in the oleochemicals manufacturing sector.
Wang especially highlighted that Rugao Port is equipped with bonded storage tanks facilities for storing of palm cooking oil at Rugao Port, and those who use the facilities are not required to pay tax or duty, until or unless the palm cooking oil is sold.
“He (Wang) also acknowledged the fact that Sabah has a sizable local Chinese population who speak the same language and share the same culture, besides its diverse culture and beautiful nature like scenic islands and beaches, are plus points for Rugao investors to consider investing in Sabah, in future,” said Hong.
Meanwhile, Phoong expressed his aspiration to see bilateral trade and investment collaborations between Sabah businesses and their counterparts from Rugao City, both in Sabah as well as in Rugao, in future.
He also thanked Hong for his dedicated effort in facilitating the visit by the Rugao delegation, which he described as significant, for the downstream industrial development of Sabah.
Source: Borneo Post
