Business opportunities in East Coast Economic Region, 20 September 2007

Business opportunities in East Coast Economic Region
20 September, 2007

Business opportunities await local and foreign investors in the East Coast of Peninsular Malaysia with the scheduled launch of the East Coast Economic Region (ECER) Master Plan by the Prime Minister Datuk Seri Abdullah Ahmad Badawi, on October 30. The ECER is an area covering 66,736 sq km of land in the states of Kelantan, Terengganu, Pahang and the district of Mersing district in Johor, which together constituted about 51 % of Peninsular Malaysia.

The blueprint, which is being finalized by the Petroliam Nasional Berhad (Petronas), the National oil company, aims to spur the development in the region and further uplifting the economic wellbeing of the people there. The Plan envisaged the Gross Domestic Product (GDP) in the ECER to grow by 7.2% to RM65.9 billion by 2020 from the RM23.1 billion in 2005.

Petronas President and Chief executive Officer, Tan Sri Mohd Hassan Marican said some RM112 billion in investments were expected to be poured into the region for the planned period. Some 39% is expected to be invested in infrastructure development, including construction of new roads and upgrading of existing roads as well as expansion of the regional airports.

The ECER would focus on the services, manufacturing and agriculture sectors. In the services sector, one of the main thrusts is on tourism. The services sector is projected to contribute RM34.3 billion by 2020 from the RM11.7 billion in 2005

The manufacturing sector, which is targeted to grow to RM19.1 billion by 2020 from RM5.9 billion in 2005, would focus on the further development of the oil and gas and petrochemicals industries, given the inherent strength of large reserves of oil and gas and the existing cluster of these industries in the region. It is expected to create greater linkages with other downstream manufacturing clusters, such as automotive, electrical and electronics and packaging industry clusters.

In addition, the furniture industry would also be an area for development as rubber plantations have been identified for the supply of timber to be used in furniture-making.

With wide expanse of agricultural land, there would be renewed interest in large-scale commercial farming including for fruits such as citrus and pineapple, using the latest technology, and enhancing supply chain management. Such efforts would boost the development of downstream value-adding activities. The agriculture sector is expected to grow to RM8.6 billion by 2020 from RM3.7 billion in 2005.

The availability of a relatively big workforce, with a significant number of females as well as the more cost-competitive wage rates compared with the West Coast, are added draws to potential investors to the ECER, besides the existing good educational facilities there.

In identifying suitable growth areas for the different states, the Plan would take into consideration the competitive strengths of the respective states.

Kelantan, with its acknowledged entrepreneurship among its people, would be the centre for trading. In addition, the State would also focus on developing as a centre of educational excellence in line with the emphasis on human capital development. Kelantan is also expected to promote agro-based activities such as poultry rearing and herbal plants cultivation.

Terengganu, with its renown tourists sites, would be geared as a tourism gateway, beside harnessing its current strengths in the oil, gas and petrochemical industries to move into high value downstream processing activities. The State is also expected to be a centre of educational excellence. In agriculture, the State is expected to encourage goat-rearing and the cultivation of citrus fruits.

Pahang, the largest State in the East Coast would focus on manufacturing, which would extend to develop a palm oil industrial cluster. The State would also be positioned to develop an integrated logistics distribution hub, as part of its port city development. For the agriculture sector, cattle rearing and pineapple cultivation would be promoted.

With the planned development in the ECER, the third regional plan coming after the Iskandar Development Region in South Johor and the Northern Corridor Economic Region, the Malaysian Government is on track to achieve a viable, equitable and sustainable development in the country. Similar development master plans are also being drawn up for Sabah and Sarawak.

Adapted from "New Straits Times", 20 September, 2007