DUE EAST. An Investment Guide to the ECER. A Fifth Anniversary Commemorative Edition MALAYSIA

Transcription

1 DUE EAST MALAYSIA A Fifth Anniversary Commemorative Edition An Investment Guide to the ECER

2 4 Foreword by the Prime Minister and Chairman of ECERDC The Competitive Edge The East Coast Economic Region Development Council ECER: A Region Set For Rapid Transformation The ECER SEZ The Catalyst Of Transformation 28 Key Economic Drivers Tourism Oil, Gas & Petrochemical Manufacturing Agriculture Human Capital Development 70 Doing Business In Malaysia 72 The ECER Incentives Package 80 ECERDC: The One-Stop Centre For Investor 82 Contact Us East Coast Economic Region Developement Council (ECERDC) 2013 All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any means (electronic, mechanical, photocopying, recording or otherwise) without the permission of the copyright owner (ECERDC)

3 Foreword by the Prime Minister and Chairman of ECERDC As the Prime Minister of Malaysia and Chairman of the East Coast Economic Region Development Council (ECERDC), I am pleased to welcome both local and foreign investors to consider the investment opportunities in the East Coast Economic Region. The Government of Malaysia has long seen the need to spur the development of the east coast states of Kelantan, Terengganu, Pahang and the district of Mersing in Johor, a Region with vast investment potential in clusters such as tourism; oil, gas and petrochemicals; manufacturing; agriculture; and human capital development. ECERDC has specifically been created to provide direction, as well as to develop policies and strategies to bring socio-economic development through investments to the Region. I am pleased to note that since its establishment in 2008, ECERDC has turned in remarkable achievements in an effort to make the Region realise its vision of becoming a high-income developed Region by 2020 in tandem with the rest of the country. Tremendous opportunities exist for investors in the five clusters earmarked for the Region. The target for ECER as a whole is to attract investments worth RM112 billion by We are almost at the halfway mark, with RM50 billion achieved in just five years after the establishment of ECERDC. In order to boost the competitive advantage of the Region, ECER Special Economic Zone (ECER SEZ), a 25km by 140km strip stretching from Kertih in Terengganu through Kuantan, and to Pekan in Pahang, has been established as a strategic initiative for a more structured and geographically focused approach to attracting investments into the Region. Malaysia has in place several pro-business policies to offer local and foreign investors a dynamic and vibrant business environment to do business. Added to this is the stable political environment, which makes ECER an attractive investment destination of choice. Major international companies such as BASF PETRONAS, Daimler Chrysler, Volkswagen, Kaneka, CJ CheilJedang, Arkema, Gevo Inc and Huntsman International LLC, have made ECER home for their investments. The newest addition to ECER s industrial parks is the Malaysia-China Kuantan Industrial Park (MCKIP) that has made ECER SEZ its home. Developed entirely by the private sector, it is modeled along the lines of its sister park, the China-Malaysia Qinzhou Industrial Park that was launched in April ECERDC has well-formulated, focused strategies to help investors capitalise on the rich resources and the favourable business climate of the Region. ECERDC is committed to making ECER a high-income developed Region by And the Government will do its utmost to make that happen by supporting a dynamic business environment. I hereby extend my invitation to all investors to come and be part of the Government s vision of transforming ECER into a high-income developed Region by DATO SRI MOHD NAJIB BIN TUN HAJI ABDUL RAZAK 4 Today the ECER SEZ is well positioned to play the role of a catalyst for ECER as a whole to develop as a major local and international tourism destination, an exporter of resource-based and manufactured products, a vibrant trading centre and logistics hub by

4 THE COMPETITIVE EDGE The East Coast Economic Region (ECER), covering the states of Kelantan, Terengganu, Pahang and the district of Mersing in Johor, is rapidly transforming into one of Malaysia s most dynamic regions offering diverse business opportunities to investors. The East Coast Economic Region United Kingdom Russia Europe Japan China North America Pakistan UAE Myanmar India Taiwan Vietnam Philippines Thailand Cambodia Kuantan Singapore Indonesia South America Australia New Zealand South Africa Bukit Kayu Hitam THAILAND Alor Star Kota Bharu To Thailand Bachok Rantau Panjang To Penang Jeli George Town Tok Bali Machang Merang Kuala Krai Butterworth Kuala Terengganu Marang Kuala Berang Gua Musang Lojing Dungun Ipoh Kertih Chukai Kuala Lipis Kuantan Port City Jerantut Kuantan Raub Lanchang Bentong Karak Simpang Pelangai KUALA LUMPUR Maran TemerlohMentakab Tanjung Agas Pekan / Peramu Muadzam Shah KLIA Kuala Rompin Tanjung Gemuk Seremban Segamat 6 7 Mersing Kg. Sedili Besar Tanjung Pelepas Johor Bahru SINGAPORE Klang Port Tanjung Api

5 Attractive incentives have been designed specifically for ECER, which includes a Special Economic Zone (SEZ), to spur investments in what will become a costcompetitive and vibrant business hub. VISION KEY DRIVERS ENABLERS THE MAIN PILLARS Support System Basic Foundation (Hard & Soft Infrastructure) TOURISM OIL, GAS & PETROCHEMICALS MANUFACTURING AGRICULTURE HUMAN CAPITAL DEVELOPMENT Supporting Manufacturing Avtivities, Logistic, ICT, Financial Services and Related Services Supporting Institutions (Education, R&D, Government, Private and Social Institutions, Trade Associations, Communication and Coordination System) Adequate Physical Infrastructure Strong Basic Education and Training Conducive Working and Living Environment Stable Political & Social Environment ECER is well positioned to leverage on its strategic location and rich biodiversity to realize its goal of making the Region an important biotechnology region. Investors from Europe, the United States and Asia are already capitalizing on the four existing biotechnology centres in the east coast states, namely: Kertih Biopolymer Park, Kuantan Integrated Park, Gambang Halal Park, Pasir Mas Halal Park and Malaysia-China Kuantan Industrial Park (MCKIP). Come 2020, ECER would have contributed substantially towards Malaysia s bioeconomy target of attracting RM 10 billion in investments. To date, France s Arkema, South Korea s CheilJedang and Gevo Inc. from the US have contributed close to RM 4 billion towards the national target. ECER places strong emphasis on developing human capital, both for existing and emerging industries like biotechnology, with the ultimate goal of making the Region a developed corridor. Collaboration and strategic partnerships with centres of learning are already in place to help realize this goal. In the meanwhile, ECER s human capital development programmes such as the National Talent Enhancement Programme, Entrepreneurship Development Programme and empower ECER that target young talents at school, youths and women continue to produce creditable results. VISION The Master Plan is guided by a well-defined vision and mission that serve as a basis for the formulation of strategies, programmes and projects that will spur the Region to achieve developed status by the year 2020, in line with Malaysia s national aspirations. The ECER vision is defined by three characteristics distinctive, dynamic and competitive. STRATEGIC LOCATION Located strategically in the east coast of Peninsular Malaysia, the ECER is well placed to become a major trade and industrial gateway, offering investors access to the vast, burgeoning markets of the Far East. Asia Pacific and beyond, with a total population of 4 billion and a combined GDP of US$17 trillion. Attractive incentives designed specifically for this Region, which includes a Special Economic Zone (SEZ), have been formulated to spur investment in what will become a cost-competitive and vibrant business hub. Key Economic Drivers Tourism Oil, Gas & Petrochemicals Manufacturing Agriculture Human Capital Development The Region s distinctive natural resources, culture and heritage will form the basis for transforming its economy into one that is dynamic and competitive in light of greater regional and global competition and economic liberalisation. To make this a success, the Government is counting on a mutual partnership with the private sector to encourage investment and new economic activities in the Region. The Government, on its part, is committed to putting in place physical, transportation and infrastructure projects to support the development initiatives. Attractive incentives designed specifically for this Region, which includes a Special Economic Zone (SEZ), have been formulated to spur investment in what will become a cost-competitive and vibrant business hub. 8 KEY ECONOMIC DRIVERS Major investments in the Region are currently focused in the oil, gas and petrochemical sector, but given the abundant non-hydrocarbon resources available in the Region, the ECER is also experiencing economic developments in the fast-growing sectors of tourism, manufacturing, agriculture and human capital development. These development initiatives are detailed in the ECER Master Plan, developed by PETRONAS, and will be the basis for guiding the development of this Region until the year 2020 it will be transformed into a major local and international tourism destination, an exporter of agro and resource based products and manufactured goods, a vibrant trading centre and an infrastructure and logistics hub. Cutting across the five economic drivers are ECER s bioeconomy transformation initiatives undertaken to support Malaysia s Bioeconomy Transformation Programme (BTP). ECER s initiatives involve the production of bio-based resources and their conversion to food and non-food products through the use of innovative bio-technologies. ENABLERS TO SUPPORT GROWTH The Government is investing in the development of key transportation projects, such as a new expressway linking the Region to the central, southern and northern regions of the peninsula, improvements on existing Federal roads, upgrading of the Region s domestic airports to regional and international status and upgrading of the major ports to cater to the investors needs in the future. Improvements to ports, airports, roads and highways as outlined in the ECER Master Plan will result in the Region being better connected from within and outside the country. Kuala Terengganu has become an international airport while Kota Bharu Airport and Kuantan Airport will be upgraded to regional status to enable wide body aircraft to land, opening the opportunity for increased arrivals and freight handling, and greater ease and comfort for travellers. Accessibility to the ECER will be further enhanced with the completion of the East Coast Expressway, which will link the Kuala Lumpur conurbation to Kota Bharu and further north to neighbouring Thailand via Pengkalan Kubor. To the south, the next phase of this expressway will link Kuantan to Singapore via Johor Bahru. 9

6 The Central Spine Road that stretches from Kuala Krai in Kelantan to Simpang Pelangai in Pahang will be upgraded into a dual two-lane carriageway. It not only connects to the North-South Expressway to Seremban but also acts as a strategic connection to interior towns thus creating a comprehensive network of quality roads from rural to urban areas in the region. This will improve connectivity from within and outside the ECER. The Region is also linked to other parts of the peninsula via an efficient railway network operated by Keretapi Tanah Melayu. The main line stretches from Tumpat in Kelantan to Gemas in Negeri Sembilan, before branching out to Padang Besar and Johor Bahru. The railway network also links the ECER to Thailand via Rantau Panjang in Kelantan. The proposed expansion of the Region s ports - Kuantan Port and Kemaman Port - will further enhance the efficiency of the trans-shipment of goods by sea from and into the ECER. The capacity of major utilities, such as water, electricity and Information and Communication Technology (ICT), as well as the sewerage and solid waste management systems are also being improved. Several flood mitigation projects will be undertaken to improve drainage conditions in the ECER. Coastal management and protection will be handled systematically to allow development projects to take place with minimal disruption. Special emphasis will be placed in conserving the environment to ensure sustainability for years to come. A mechanism will be put in place to monitor environmentally sensitive areas especially the highland regions, which are important water-catchment areas. The conservation of the Region s rich flora and fauna has always been given due emphasis to ensure that development is undertaken without taking a serious toll on the ECER s natural environment. This is to ensure that the natural wonders of the Region remain intact for generations to come, while investments are carried out in a sustainable manner. Gross Domestic Product is projected to grow by an average annual rate of 7.2 per cent in the East Coast Economic Region (ECER). KEY REGIONAL FACTS By 2020, Gross Domestic Product is projected to grow by an average annual rate of 7.2 per cent in the ECER with per capita GDP expected to more than double to RM13,510 in 2020, indicating the move toward a more knowledge- and technology-driven economy. GEOGRAPHY Area - States : Kelantan, Terengganu, Pahang and District of Mersing in Johor - Size : 66,736 sq km (51% of the land area of Peninsular Malaysia) PEOPLE Population : 3.9 million (2005), representing 14% of the national population : Estimated to grow to 4.9 million in 2020 Workforce : 1.36 million (2005) and 1.92 million (2020) 10 ECONOMY GDP Growth : 5.7% (2005) and 7.2% (2020) GDP Per Capita : RM5,860 (2005) and RM13,510 (2020) Average Monthly Household Income : RM2,267 (2005) and RM5,227 (2020) Source: ECER Master Plan 11

7 THE EAST COAST ECONOMIC REGION DEVELOPMENT COUNCIL The East Coast Economic Development Council (ECERDC) is a statutory body consisting of the highest level of the federal and state administration, entrusted to implement the ECER Master Plan.

8 The Council plays a leading role in setting the direction, policies and strategies in relation to the Region s development. Established by an Act of Parliament, the ECERDC aims to stimulate, promote and accelerate the growth of the ECER in an equitable and sustainable manner, turning it into a world-class economic region and a choice destination for investment, work and living. The Council is presided over by the Prime Minister with members consisting of the Deputy Prime Minister, the Menteris Besar of the states of Kelantan, Terengganu, Pahang and Johor, two Federal Ministers, a representative from the civil service and two members appointed from the private sector. The ECERDC also has a management team of professionals, led by a Chief Executive Officer, which carries out the strategic planning, execution and implementation of all aspects of the ECER Master Plan. It also acts as a one-stop centre for facilitating investments in the Region. The Council plays a leading role in setting the direction, policies and strategies in relation to the Region s development. 15 The ECERDC also establishes policies, direction, strategies and initiatives in relation to sustainable development, including environmental protection, management and conservation in the ECER. 14 It also plays the coordinating role between Government entities in the promotion of trade, investment, tourism and development activities in the ECER. Among others, the Council acts on behalf of the Government agencies within the ECER to receive, process and expedite approvals for trade, investment and development in the ECER. The Council also promotes and stimulates economic and social development in the Region, as well as private sector investment.

9 ECER: A REGION SET FOR RAPID TRANSFORMATION ECER was launched as an economic corridor in 2007 to address a regional imbalance through accelerated growth to be implemented in a viable, equitable and sustainable manner.

10 KEY DEVELOPMENT AREAS Seven Key Development Areas (KDA) or Nodes have been identified to ensure equitable development and wealth creation in the Region (see map). Node 1 covers ECER Special Economic Zone that is to act as a catalyst for concentrated decentralization of economic activities in order to propel ECER towards the pathway of a developed Region by Node 2 involves cross border development covering the coastal belt from Besut in Terengganu to Tumpat at the Kelantan-Thai border. Node 3 covers the Kuala Terengganu City Centre-Kenyir-Dungun Triangle. It includes the Kuala Terengganu City Centre project and the tourism centres at Dungun and Kenyir Lake. Node 4 is the Mersing and Rompin Key Development Area in the south covering agriculture, ecotourism at Endau-Rompin National Park and island tourism off the coast of Mersing. Node 5 and Node 6 cover the hinterland where development initiatives will act as catalysts to economic growth. Node 5 covers the Gua Musang-Kuala Lipis KDA while Node 6 covers the Bentong-Raub KDA. Node 7 focuses on strategic development projects, socio-economic programmes and maintenance activities in the Dara-LKWJ KDA. ECER ENTRY POINT PROJECTS Following Malaysia s vision of creating a high income developed nation by 2020, a regional Corridors and Cities Transformation Programme was formulated to complement the national Economic Transformation Programme and the Government Transformation Programme. In a lab conducted by the Corridors and Cities Transformation Programme in 2011, 18 Entry Point Projects adopting a granular approach were identified for ECER that were industry- and category-specific based on the ECER Master Plan (see map). Currently, these 18 projects are at different stages of implementation. ECER Key Development Areas (KDA) ECER Entry Point Projects (EPP) Nod 5: KDA Gua Musang - Kuala Lipis Tumpat Kota Bharu Rantau Bachok Panjang Tok Bali Bukit Bunga Jeli Besut Nod 6: KDA Bentong - Raub Nod 7: KDA DARA - JENGKA KELANTAN Gua Musang Kuala Lipis PAHANG Raub Bentong TERENGGANU Kuala Berang Jengka Gambang Nod 2: Pembangunan Merentasi Sempadan MERSING Kuala Terengganu Dungun Kertih Kuantan Pekan Pulau Tioman Endau-Rompin Aquaculture GNI: RM1.030 mil Jobs: 4,516 Priv. Invest: 94% 1 Mersing Nod 3: Segi Tiga KTCC - Kenyir - Dungun Nod 1: Zon Ekonomi Khas (ECER SEZ) Automotive Assembly GNI: RM1,340 mil Jobs: 28,338 Priv. Invest: 94% Nod 4: KDA Mersing - Rompin 8 18 The scale of development envisioned by ECER s Master Plan makes the Region a hive of activities for many years to come. ECER is fast emerging as a distinctive, dynamic and competitive destination for investments, attracting both domestic and international investors. Transformation of the Region is based on the relative strengths of the east coast states, drawing upon existing resources and capabilities to meet the immediate and long term goals. At the same time, initiatives to improve the quality of life of the local population, with improved transportation and infrastructure and human capital development remain at the heart of transformation programmes. Individual investors and companies can capitalize on ECER s strategic location (the Region faces one of the busiest shipping lanes of the world) and access to local, regional and international markets. Investors can also exploit the Region s vast resources and rich biodiversity to pioneer innovative businesses SPECIAL ECONOMIC ZONE (SEZ) MERSING Agriculture Tourism Manufacturing Oil, Gas & Petrochemicals Enabler - Infrastructure Dairy Cattle GNI: RM667 mil Jobs: 1,026 Priv. Invest: 86% Goat & Sheep GNI: RM816 mil Jobs: 3,727 Priv. Invest: 83% Cassava GNI: RM427 mil Jobs : 4,200 Priv. Invest: 76% Coastal Tourism GNI: RM1,974 mil Jobs: 32,358 Priv. Invest: 94% Ecotourism GNI: 349 mil Jobs: 2,056 Priv. Invest: 91% Island Tourism GNI: RM156 mil Jobs: 989 Priv. Invest: 95% Supply Base Services 12 GNI: RM2,700 mil Jobs: 14,010 Priv. Invest: 95% 6 Downstream Palm Oil GNI: RM2,279 mil Jobs: 8,259 Priv. Invest: 88% Halal Hub GNI: RM1,100 mil Jobs: 12,881 Priv. Invest: 89% Polymer GNI: RM1,600 mil Jobs: 3,229 Priv. Invest: 97% Kuantan Port Expansion GNI: RM3,796 mil Jobs: 8,638 Priv. Invest: 75% 7 Road & Rail 14 Total Inv.: RM4,107 mil Priv. Invest: 3.4%

11 THE ECER SEZ THE CATALYST OF TRANSFORMATION Pengkalan Kubor Kota Bharu Measuring 25 km by 140 km, from Kertih in Terengganu to the north to Pekan in Pahang to the south, ECER SEZ is strung together by an agglomeration of well-established industrial parks through the concept of concentrated decentralisation. 20 These industrial parks are the catalysts to spur integrated development and promote sustainable economic growth in an increasingly competitive business environment. ECER SEZ also has a larger focus on local urban development and economic growth in the Greater Kuantan conurbation upon which its geographical boundaries are defined. ECER SEZ is positioned as the catalyst for the Region to develop as a major local and international tourism destination; an exporter of resource-based and manufactured high value products; a vibrant trading centre; and infrastructure and logistics hub by Bukit Bunga to become the catalyst for focused Kuala Besut growth in the ECER guided by a vision that is supported by a high level of Kuala Terengganu KELANTAN economic growth through accelerated development in the six key economic TERENGGANU Gua Musang drivers which include high-value manufacturing; agro-based industry; oil, Dungun gas and petrochemical; tourism and real estate with special focus on knowledge Kertih and education and Information Kuala Lipis Cukai Communication Technology (ICT); and logistics. PAHANG Bentong Temerloh Mentakab Kuantan Gambang Pekan Tanjung Agas Kuala Rompin Mersing, Johor 21 The ECER Special Economic Zone (ECER SEZ) ) was launched in 2009 by Prime Minister Y.A.B. Dato' Sri Mohd Najib bin Tun Haji Abdul Razak as a strategic initiative for a more structured and geographically focused approach to attracting investments into the Region, which accounts for 51% of the land mass of Peninsular Malaysia. The objective of the ECER SEZ is The ECER Special Economic Zone In pursuing the goal of making ECER into a developed Region a special economic zone called ECER SEZ was established. Rantau Panjang

12 ECER SEZ Key Project Initiatives ECER SEZ is targeted to create 45% of new jobs and 80% of economic output in the Region, even though it covers only 6% of the entire land mass. A primary function is to fast-track socioeconomic development of the Region through robust investment inflows, job creation and higher incomes that will have a multiplier impact on ECER. ECER SEZ has an investment target of RM97 billion by 2020, when it is expected to generate 250,000 new jobs, 45% of the 560,000 new jobs for the Region. As a special economic zone driven by private investments, ECER SEZ offers customised incentives developed by ECERDC. 22 To achieve ECER SEZ's goals, seven of its strengths were identified as building blocks: port; industrial clusters; transport, infrastructure and utilities; free zone; new town; commercial; and tourism. Its 11 industrial parks, four ports, two airports, four free zones and four tourism zones are to be reinforced as sturdy, sustainable, interlocking platforms to spur focused decentralisation and deliver the goals and targets of ECER SEZ. Kuantan Port City (KPC), one of the focus nodes within ECER SEZ, is being developed to make the special economic zone into an integrated industrial and logistics hub for a number of industries and manufacturing zone serving the Asia Pacific and beyond. KPC, which covers an area of about 13,000 hectares, envisions itself as a modern and efficient city, complete with commercial and industrial activities, educational institutions and residential areas, all to serve port-related industries and trade. The Federal Government has already embarked on upgrading and expansion of critical infrastructure and public utilities to accelerate the development of Kuantan Port City. Several projects that have been identified are now in various stages of implementation. They include the KPC Port Link Road, the main arterial road in Kuantan Port City, and the upgrading of the existing Federal Road 3 along the coast. The Federal Government is also spearheading the expansion of Kuantan Port with the expansion of a new deepwater terminal. As with most projects in ECER, a Public-Private Partnership model has been adopted. The port concessionaire, Kuantan Port Consortium, will invest RM3 billion for the construction of berths and terminal, operational buildings, equipment and machineries as well as infrastructure. With continued modernization of the all-weather multi-purpose Kuantan Port, which began operations in 1975 to serve timber and oil palm industries from the East Coast, will in the future be able to receive Cape-size bulk carriers and new generation Post Panamax container vessels of up to 200,000 deadweight tonnes. Kuantan Port, which offers the shortest, quickest and most direct route between Malaysia and the ports of Far East, will also be a catalyst in the development of the nearby Malaysia-China Kuantan Industrial Park or MCKIP. Kuantan Port is strategically located facing the South China Sea, right in the middle of one of the busiest shipping lanes in the world. ECER SEZ is set to experience unprecedented growth and generate a ripple of development throughout the ECER through its significant multiplier effects. It is now one of the larger SEZs in Asia with 390,000 hectares comprising 25,000 hectares of SEZ Focus Nodes. 23

13 International, National & Regional Positioning Of The ECER SEZ The ECER SEZ lies in a belt of development within the ECER that banks on the international, national and regional growth conurbations to fuel its growth as the hinterland to East Asia. While the focus is to promote international/regional trade linkages and investment, the emphasis is also on protecting and conserving environmentally sensitive areas. INTERNATIONAL, REGIONAL AND NATIONAL POSITIONING OF ECER SEZ INDOCHINA CHINA/EAST ASIA INTERNATIONAL POSITIONING The ECER SEZ lies at the geographical centre of Southeast Asia, serving as a gateway to Indochina and the two most populated countries in the world: China and India (combined population of 3 billion people). In addition, through its location in Malaysia which is a member of the Association of South East Asian Nations (ASEAN), the ECER SEZ is entitled to privileges under the ASEAN Free Trade Area (AFTA) Agreement an area with a combined population of more than 500 million people. Taken together, the factors above provide ready access for the SEZ into a larger domestic market, thus giving a bigger scale of production and bigger base to source for raw materials. REGIONAL POSITIONING Within the ECER SEZ, there will be further initiatives taken to strengthen local economic corridors in Oil, Gas & Petrochemical, Manufacturing, Agro-based Industries, Tourism and Education Clusters through focused concentration of investments in selected nodes and clusters. NATIONAL POSITIONING Nationally, the ECER SEZ is strategically positioned as a major growth conurbation for the East Coast states. This conurbation, identified as a National Regional Growth Conurbation (Level 2) in the National Physical Plan, is expected to have a large population concentration of about 1 million by KL Metropolitan NCER NATIONAL ECER SEZ KERTIH CHUKAI KUANTAN PORT CITY KUANTAN GAMBANG PEKAN TG. AGAS Hinterland to East Asia Inter-regional hub for Asia Pacific Integrated industry clusters Low coast of doing business Busy nautical routes Free Zones Eastern gateway of the country Promoting international/regional trade linkages and investment The ECER SEZ is also strategically located at the convergence of two main growth corridors in the peninsula i.e. the Central Corridor linking KL to Kuantan and East Coast Corridor stretching from Kota Bharu in the north to Johor Bahru in the south. Other sub-corridors that could have an impact on the ECER SEZ will include the Kuantan Melaka Sub-Corridor. 24 Iskandar Malaysia INDIA/ MIDDLE EAST BORNEO/ INDONESIA SINGAPORE/ AUSTRALIA 25

14 THE FOUNDATION OF THE ECER SEZ The ECER SEZ contains four major ports and two airports which will support its manufacturing and industrial activities. The main transportation and logistics initiatives include: SPECIAL ECONOMIC ZONE MODEL The ECER SEZ Central Link, which will unlock the development potential of interior land parcels in the SEZ and serve as the main traffic connector for the SEZ The development of an expressway system - East Coast Expressway 2 (LPT2): Kuantan - Kuala Terengganu - East Coast Expressway 4 (LPT4): Kuantan - Johor Bahru Commercial New Town Transport, Infra & Utilities The regional rail link connecting the industrialised west coast and the ECER SEZ The proposed Kuantan Sentral Multimodal Transit Hub ECER SEZ KEY INITIATIVES To Dungun/K.Terengganu KERTIH Kertih Integrated Petrochemical Complex Kertih Polymer Park Polymer Technology Centre Tourism Knowledge & Education Industrial Clusters To Kuala Lumpur Major Urban Nodes Industry Nodes Tourism Nodes GAMBANG Cattle Integration in Oil Palm Plantations (Kemaman) EAST COAST EXPRESSWAY (LPT 1 & 2) Kuantan-Maran Agro Valley SEZ CENTRAL LINK TEMERLOH-MENTAKAB / KT RAIL EAST COAST EXPRESSWAY (LPT 4) UMP PAKA KERTIH KIJAL TELUK KALONG / KEMAMAN PORT CUKAI CHERATING KUANTAN PORT CITY KUANTAN KUALA PAHANG KIJAL Mainland Coastal Tourism CUKAI Kemaman Boat Building & Repair Park Kemaman Heavy Industrial Park Kemaman Port Expansion Kemaman Port - Free Zone SME Development Programme for Processed Fisheries Products Fish Collection, Packaging & Processing Centre & Fish Landing Port CHERATING Mainland Coastal Tourism KUANTAN PORT CITY Knowledge Innovation Zone Kuantan Deep Water Port Kuantan Port City - Free Zone Logistics Centre Palm Oil Industrial Cluster Automotive Regional Distribution Centre Grain-based Animal Feed Industry Gebeng Integrated Petrochemical Complex Biofuel Cluster Industrial Cluster Small Medium Scale Enterprises Panching Water Treatment Facility Port Free Zone The ECER SEZ will incorporate an integrated development approach, which comprises commercial, residential, educational, industrial, service and knowledge components. It will have an orientation towards building up capacity for knowledge innovation that can be linked across each component. The knowledge innovation-baesd economy acting as an enabler, will fokus on collaboration, cooperation, research and development, knowledge-sharing and commercialisation of ideas between the private sector, Government and academia. 26 Agropolitan Project BANDAR AL MUKTAFI BILLAH SHAH Furniture Industry Park SG. LEMBING Ecotourism & Heritage Mines Safari Park To Johor/Singapore PERAMU PEKAN GAMBANG Gambang Halal Park Poultry Processing Park SME Incubation Centre for Food Processing Biotech Industrial Park Electric and Electronic Supply Centre PEKAN-PERAMU Cultural Heritage Tourism Automotive Industrial Park Handicraft Village Tg. Agas Maritime Industrial Hub Tg. Agas - Free Zone KUANTAN Urban Tourism Kuantan Airport Upgrading Fish Processing Park & Fish Landing Port Kuantan-Maran Agro Valley SME Development Programme for Processed Fisheries Products Handicraft Industry Programme Kuantan Cyber Centre International Islamic University Kuantan Sentral Multimodal Transit Hub Kuantan Airport - Free Zone KUALA PAHANG Mainland Coastal Tourism University Malaysia Pahang Centres of Excellence (Biofuel, Biodegradable Products & Automobile) Kuala Pahang Marine Fish & Shrimp Hatchery & Marketing Centre 27

15 29 Human Capital Development Oil, Gas & Petrochemicals Petrochemical Tourism 28 The five key drivers - tourism; oil, gas and petrochemicals; manufacturing; agriculture; and human capital development - present vast business and investment opportunities to individuals and corporations keen to make a mark in a region poised for rapid transformation. Prospective investors are encouraged to take advantage of the investment Suspendisse potenti. opportunities brought about by the implementation of thesuspendisse ECER MasteratPlan and Nulla sed augue. nonplanned arcu. explore possible venture options,pede. as well as synergies withphasellus existing and Vestibulum ante ipsum primis in faucibus initiatives. While the plan plots out the form and direction of economic growth in the orci luctus et ultrices posuere cubilia Curae; Region, investors will be able to create their own niche opportunities and capitalise Curabitur blandit leo id lacus condimentum on these, contributing to the Region s robustmaecenas growth in the future. sodales. vitae metus. Agriculture Five key economic drivers or clusters have been identified to steer the ECER s socio-economic development until the year Manufacturing KEY ECONOMIC DRIVERS In addition to the various incentives put in place by the Government, the ECER Master Plan has also identified a number of promoted activities in the Region to be developed within the framework of the cluster-based development, all aided by the corresponding support infrastructure to spearhead growth.

16 Tourism ECER Tourism Project Sites Cherating ECER has diverse tourism attractions ranging from enchanting islands and pristine beaches through eco adventure to international regattas. The Region is also rich in cultural heritage, with the Malays showcasing their heritage steeped in tradition. The arts and crafts of the people of ECER are like no other. ECER houses some of the best artisans in batik, silk weaving and wood carving. Tanjung Agas The pristine natural beauty of ECER is showcased by the 67 enchanting islands off the coast of Terengganu and Mersing, Johor. Blessed with 700 kilometres of pristine beaches and diverse eco-tourism spots covering 4,343 square kilometres, ECER is home to 350 tropical bird species, 300 types of fish and 300 mammal species. With the view to tapping ECER s immense tourism potential, seven distinct segments have been earmarked for further development based on their unique selling proposition. They are: urban tourism, mainland coastal tourism, island tourism, cultural heritage tourism, cross-border tourism, ecotourism and hall mark events. 31 Investors in the region can explore vast opportunities in the hospitality industry, tour package development, retail and marketing, as well as the manufacture of handicrafts and ethnic inspired gifts as some of the possible ventures in the ECER. 30 ECERDC has identified more than 30 tourism projects and packages for implementation to generate a gross national income of RM2.5 billion and RM9.4 billion worth of private investments by A developed tourism sector is expected to provide more than 35,000 jobs by 2020.

17 Mainland Coastal Tourism One of the main initiatives investors can look into is the effort to develop more tourism facilities on the mainland, taking developmental pressures away from the offshore islands. For the discerning investor, the region s relatively pristine coastline presents an opportunity for the establishment of large scale integrated resorts or even intimate boutique resorts presenting the best of both world class features and a distinctive local flavour. Demand for accommodation in the ECER will increase more than threefold to 24.5 million hotel guests in The focus on mainland coastal tourism will also ensure that the delicate balance of the island s ecosystem, marine life and coral is not adversely impacted by human activity, preserving the natural beauty of these islands for generations to come. For this to happen, the ECER has outlined a number of locations where investors can participate in the development of new integrated tourism resort development as well as modest-scaled incremental resort developments for smaller enterprises. These locations have been selected for their natural beauty and long-term future potential for accommodating a greater number of visitors. Investing in the mainland coastal tourism segment will allow investors to establish their immediate presence in prime beach front areas with great potential for future growth. Sustainable Island Tourism The ECER is home to some of the most beautiful islands in Malaysia. While the island destinations have attracted a steady stream of tourists over the years, the future direction of development in this area will ensure that the islands will be preserved while major tourist installations will be located on the mainland. By improving the efficiency of transportation to the islands, tourists will have greater access to many attractive island destinations previously unexplored by visitors, while returning to the comfort of their resorts after a fulfilling day trip. In addition to the more well known islands of Pulau Perhentian, Pulau Redang and Pulau Tioman, the initiative is expected to fully realise the development potential of destinations such as Pulau Sibu, Pulau Aur and Pulau Pemanggil in Mersing to tourists. Promoted Locations for Integrated Resort Development Kelantan Terengganu Pahang Johor Pantai Seri Tujuh, Tumpat Kuala Besut - Tembila Kg. Penarik/Pulau Besar - Merang Teluk Bidara, Dungun Kuantan Cherating Pantai Air Leleh, Mersing 32 In exploring the development of the islands as a tourist playground, investors can consider participating in businesses related to the establishment of tour packages and logistics which include day trips to the islands. 33

18 Urban Tourism The ECER initiative hopes to turn the vibrant urban centres of the East Coast into tourism magnets equipped with modern comforts, while maintaining its age-old charm and cultural identity. In Terengganu, the development of the Kuala Terengganu City Centre (KTCC) as the Tourism Gateway to the ECER is expected to turn the area around the Terengganu river mouth into a world class holiday, shopping and Meetings, Incentives, Conferences and Exhibition (MICE) destination. Its position by the sea is expected to turn it into an attractive vacation resort city, with a stunning new marina, shopping mall, a cruise terminal, a handicrafts market and hotels all in one location. As the Heritage Waterfront City, Kuala Terengganu has already seen incremental development in the form of tourist infrastructure such as food and beverage outlets and a scenic waterfront facing the sea, as well as new attractions such as the Taman Tamadun Islam (Islamic Civilisation Park) in Pulau Wan Man, and the conservation of its existing places of interest, such as the traditional boat building centre in Pulau Duyong. In Kelantan, the development of the Kota Bharu City Centre (KBCC) is expected to transform a waterfront district across the river from the existing urban fabric into a complementary development, with new retail and leisure attractions, complete with new hotels, malls, a main square and a Grand Bazaar. The dynamic waterfront area of the KBCC development will feature the state s distinctive culture and way of life while turning the Kelantan River into a veritable recreation destination. This urban renewal initiative will leverage on Kota Bharu s already strong reputation as an attractive leisure and shopping destination for local tourists. Tanjung Lumpur was identified as a Key Development Area, with enhancement works to be undertaken at six locations, namely, along the Waterfront Promenade, Boardwalk/ Mangrove Swamp Forest, Peramu Jetty, Kuantan Waterfront Urban Park, Tanjung Api SME Marketing & Exhibition Centre and Taman Gelora Community Recreation & Sports Centre. Investors interested in this segment can explore opportunities in high-end as well as budget accommodations, commercial and retail businesses, food and beverage outlets with a local or foreign theme, as well as better organised retail outlets for marketing of local handicrafts and delicacies. In Pahang, the 7.7-km long Kuantan Waterfront has the potential to become one of the prime tourist attractions in the city. In 2011, it was identified by the Corridors & Cities Lab as one of the key components in the transformation of Greater Kuantan into a vibrant conurbation. The revitalisation of the waterfront has two goals to turn the area into one of the city s major attractions and also to serve as a recreational area for the local population. 34 The development is based on integrated tourism, with commercial and promotional components that will help generate economic growth, employment and entrepreneurship opportunities for the locals. 35

19 Cultural Heritage Tourism Cross-Border Tourism Cross-Border Tourism Centres Major Cultural Heritage Tourism Centres Kelantan Terengganu Pahang Kota Bharu Kuala Terengganu Pekan The Region s cultural heritage remains one of its strongest unique selling propositions. As the cradle of Malay culture, the region acts as a living museum where ancient customs and crafts are perpetuated and practised side-by-side with modern ways and methods, to create a distinctive way of life. The region s traditional architecture of timber buildings with sloping rooflines and carved lintels has inspired contemporary structures embracing the same spirit. The Region is also home to a number of interesting and picturesque historical attractions such as the ornately carved Istana Jahar in Kota Bharu, or the charming, Mughal inspired architecture of Masjid Sultan Zainal Abidin in Kuala Terengganu, as well as the magnificent Istana Pekan in Pekan. Newly-created attractions such as the Taman Tamadun Islam, a park showcasing detailed scale models of Islamic monuments from around the world, will also attract a steady stream of visitors in the future. The depth of culture distinguishes this region as a place where tourists can enjoy the hospitality of the East Coast, its food, and handicrafts such as batik, songket, tenun weaving, wood carvings, silver and brassware. Entrepreneurs can consider offering tour packages that allow visitors to experience the historic sights and traditional way of life in the region. They can also explore the establishment of boutique resorts with a distinctive East Coast style and identity expressed in the architecture, food and services. The East Coast s proximity with neighbouring Thailand has made it a strategic gateway for cross-border tourism and commerce for decades. Cross-border tourism is expected to play an important role towards improving the economic activities that have already existed at several towns on the Malaysia-Thailand border in Kelantan. Towns such as Pengkalan Kubor have long attracted a steady stream of domestic tourists in search of affordable imported goods from Thailand and the Indo-China countries. Improving the prospects of cross-border tourism can be done by maximising the border town s potential as the tourist and excursionist gateway. From its current image as the destination for cheap, bargain goods, towns such as Pengkalan Kubor as well as Rantau Panjang and Bukit Bunga are expected to be transformed into integrated, modern destinations for shopping, dining and recreation. Investors can capitalise on the lucrative cross-border trade by developing mass-market retail outlets focusing on duty-free goods. Pengkalan Kubor in particular has been singled out as a major retail, cross border and barter trade hub with an upgraded port and warehousing facilities that will help businesses tap into the lucrative domestic, Thai and Indo-China markets. Kelantan Pengkalan Kubor Rantau Panjang Bukit Bunga Homestay Programme Locations Kelantan Terengganu Pahang Kota Bharu Tumpat Kuala Terengganu Setiu Merang Dungun Jerantut Pantai Sepat Kuala Pahang Pekan Rompin While the Government has so far played an important role in perpetuating the artistic traditions of the East Coast, especially in batik making, private investors can participate in the development of modern-day adaptation of traditional handicrafts, geared for the tourist and export market. Investors can leverage from the presence of skilled artisans who have kept alive these art forms for generations, adapting it to present day sensibilities and needs. The Government has established a number of handicraft centres in Kota Bharu, Kuala Terengganu and Pekan to preserve living crafts such as batik making, songket weaving and tenun weaving, as well as create a steady supply of quality handicraft products for the retail market. Pekan is a fascinating heritage town primarily known for its status as the seat of the royal house of Pahang. The influence of the royal family can be seen and felt through the magnificent palaces and various mausoleums throughout the town. 36 For smaller scale investors and individuals, a possible entry into the sector is through their participation in the integrated homestay or Kampung-stay accommodation programme to allow tourists the opportunities to savour local culture in authentic village settings in locations such as Tumpat, Dungun and Mersing. These programmes will complement other facilities offered by large resorts and hotels. 37

20 The ECER's major ecotourism attractions Kelantan Ecotourism centres in Lojing, Machang and Gua Musang Nenggiri and Stong Hills State Park Terengganu Ecotourism centres and Elephant Sanctuary in Tasik Kenyir Terengganu Hills and Setiu Wetlands State Park Terengganu Global Marine Turtle Observatory Rantau Abang Pahang Ecotourism centres in Taman Negara Kuala Gandah Elephant Sanctuary and Tasik Chini State Park Mersing Ecotourism centre in Endau Rompin Ecotourism The East Coast has a wealth of relatively untapped natural attractions unrivalled in the whole of Malaysia. The region is home to Taman Negara, the nation s primary national park. Straddling the borders of three East Coast States of Kelantan, Terengganu and Pahang, the park is home to numerous protected animal and plant species. The region is also home to Tasik Kenyir, the country's largest man-made lake; Tasik Chini, the nation s UNESCO (United Nations Educational, Scientific and Cultural Organisation) Biosphere Reserve; and Tasik Bera, the Ramsar Convention (Convention on Wetlands of International Importance especially as Waterfowl Habitat) site. A number of ecotourism areas present great potential for investors to tap into the vast adventure and nature tourism market. 39 There is great potential for development in this field for individuals and companies interested to develop tour packages and adventure based attractions such as rock climbing, white water rafting, as well as boat rides deep into the heart of the rainforests. Interested investors are able to rely on the knowledge and experience of the local indigenous population, who are able to provide a wide range of assistance and services for visitors venturing into the area. There is also great potential in developing the indigenous crafts of the Orang Asli such as basket weaving and wood carving into viable sources of ethnic decorative items for sale. 38 In addition to the existing wildlife sanctuaries, a number of new state parks will be established under the ECER, allowing for larger areas to be preserved for posterity.

21 Hallmark Events in the ECER Monsoon Cup Sultan's Cup Terengganu Endurance Challenge Nenggiri White Water Rafting Challenge Royal Pahang Billfish International Challenge Hallmark Events Hallmark events play an important role in tourism as they involve the hosting and specific focusing of successful events to attract an international audience to the ECER. The revenues brought about by these hallmark events create a strong multiplier effect, by generating employment opportunities and improving the business climate in local communities. The Region has, and will play host to some of the most exciting hallmark events which include the Monsoon Cup, the Sultan s Cup Endurance Challenge, Nenggiri White Water Rafting Challenge; Rock Climbing/Abseiling at Stong; Cultural Festival at Kota Bharu and Pekan and the Royal Pahang Billfish International Challenge. Companies can explore possible synergies by organising or sponsoring these events, or hosting side-events to complement the existing annual high points in the calendar. Their involvement will allow them to capitalize on a great number of branding and promotional opportunities. At the moment, the success of the Monsoon Cup, an international level sailing competition, has brought tremendous development to the tourism scene in Kuala Terengganu, while raising its profile to an international audience. Tourism Updates More than 40 Homestay/Kampung Stay Programmes are operating, among others in Kampung Pasir Belanda, Kelantan; Kampung Teluk Ketapang, Terengganu; Kampung Kuala Medang, Pahang; and Kampung Air Papan Laut in Mersing, Johor Initiation of programmes to train Homestay/Kampung Stay operators Commissioning of studies to transform Mersing s coastal area into an integrated tourism destination and gateway to the Mersing group of islands Beach revitalisation along the ECER coastline 40 41

22 Oil, Gas & Petrochemicals The oil, gas and petrochemicals industry is one of the leading industries in Malaysia, with significant hydrocarbon reserves located offshore Terengganu, contributing significantly to the nation s gross domestic product (GDP). The leading player in this cluster is PETRONAS which has forged joint venture partnerships and strategic alliances with leading international companies. In the ECER, the existing oil, gas and petrochemical cluster covers both upstream and downstream activities. Although the major facilities are already in operation, there still exist opportunities to strengthen linkages with other sectors. The future direction of the sector seeks to expand the activities of the industry in the downstream and manufacturing related sectors to add more value to existing output. Downstream industries in this sector is set to witness an evolution, with the broadening of the base to include biomass-based chemical alongside conventional chemicals in line with Malaysia's Bioeconomy Transformation Programme. At present, there exist two major downstream installations in the ECER located in Kertih, Terengganu and Gebeng, Pahang. The entire area is well served by modern infrastructure and logistics facilities that include three ports, a crude oil terminal and an offshore slug catcher in Kertih. Ethylene-Based Products The Kertih Integrated Petrochemical Complex (KIPC) has attracted some of the world s leading industry players such as BP Chemicals, Sasol Limited, Idemitsu Group and Mitsubishi Corporation. Investors can take advantage of the KIPC s existing support and logistics facility and its connectivity to the Region s major export hubs. Propylene-Based Products Focusing on propylene-based products, the Gebeng Integrated Petrochemical Complex (GIPC) in Pahang is an integrated petrochemical complex, located within a key industrial area, which has already attracted a number of major investments from local and overseas companies. New investors can play a complementary role to the existing players by completing the supply chain services for the Gebeng industrial area, which is essentially a continuation of the ECER s other major oil, gas and petrochemical development located in Kertih. Kertih Biopolymer Park (KBP) 42 In 2009, ECERDC started the development of Kertih Polymer Park as Malaysia s first fully integrated polymer and plastics Industrial park, designed to capture the high value-added downstream and manufacturing-related segment of the Oil, Gas and Petrochemicals cluster in line with the National Transformation Programme. 43

23 KBP offers investors attractive development model whereby the infrastructure, support facilities and common services are put in place, allowing investors to immediately start their operation upon relocating to the Park. The industrial Park was rebranded in 2012 as Kertih Biopolymer Park (KBP) to reflect its diversification to include bio chemicals and highlight Malaysia s biotechnology potential to the world. Companies can leverage on easily available feedstock from KIPC and GIPC and elsewhere in ECER and raw materials such as wood chips from forest plantations and cassava to produce biopolymer and biochemical products. With raw materials and supporting services available at close proximity, investors will be able to offer their products at much more competitive prices by lowering the cost of doing business and gaining much by way of technology transfer. One of the other advantages of KBP is its proximity to Kuantan Port, the gateway to the export markets of Asia Pacific. The opening of the park presents a sterling opportunity for local small and medium industries to locate their manufacturing facilities in a location with adequate support facilities and easy access to a wide range of raw materials. To date a number of investors have started their business in KBP including global a players such as CheilJedang Corp of South Korea and Arkema SA of France. Although most products from Kertih Biopolymer Park are export oriented, there is also domestic demand elsewhere in ECER. Products such as polypropylene, polyethylene and co-polymers produced here can be used for the manufacturing of food packaging materials in halal parks and palm oil-based industries in the Region while the Pekan Automotive Park can use polyvinyl chloride and polyol from KBP in the manufacturing of car components and accessories. Indirect opportunities also abound resulting from the KBP development, through participation in the logistics, warehousing, retail industries and other ancillary services to support the efforts of the plastics-based manufacturers with operations in the Park. The overall strengthening of the sector in the ECER will allow investors to participate in a host of support services, such as the supply of materials, technical and lab services, warehousing, distribution and wholesaling activities, as well as retailing. Integrated oil and gas supply base Oil and gas activity in the ECER is expected to increase over the next 10 years as a direct result of the EPPs. Increased activity provides an opportunity for supporting industries to be developed in the ECER due to its close proximity to both upstream and downstream facilities in peninsular Malaysia. Kuala Kemaman has been identified as a centre for the industry, thanks to its proximity to port facilities and the upstream and downstream developments in the Oil and Gas Industry nearby Kertih. 44 The integrated supply base will be supported by the availability of resources like iron ore and steel, manufactured by various companies in ECER like Perwaja and Eastern Steel. Leveraging on its proximity to iron ore resources, the integrated supply base will focus primarily on providing auxiliary fabrication services such as structural fabrication & piping, welding & fitting, valve repair & maintenance, offshore ventilation services as well as auxiliary offshore & platform fabrication. In addition to its auxiliary fabrication services, the supply base will also provide general services such as structural & piping warehousing services, platform stopover renting facilities and bunkering facilities as well as boat and ship repairs to complement is primary operations. 45

24 Manufacturing ECER Manufacturing Project Sites Kuala Terengganu Airport Kemaman Port Manufacturing is one of the key drivers of the ECER economy. It leverages on the Region s rich resources and raw materials such as palm oil and oil & gas to spearhead manufacturing industries that extend the current value chain. ECER s manufacturing focus is to strengthen existing linkages and forge new ones in the value chain that covers upstream, midstream and downstream production of goods, many destined for export markets. Kuantan Port City Kuantan Airport Pekan - Peramu Tanjung Agas Tanjung Agas In 2012, the heightened role of ECER in the National Bioeconomy Transformation Programme culminated in the rebranding of the Palm Oil Industrial Cluster as Kuantan Integrated Biopark. Also rebranded was Kertih Polymer Park as Kertih Biopolymer Park. Both industrial parks will utilise feedstock from oil palm biomass and other wood-based biomass in manufacturing industries. The other two bioeconomy-based industrial parks in ECER are Gambang Halal Park and Pasir Mas Halal Park that will use agricultural products and by-products for food, health and wellness industries. Individuals and companies interested in investing in the ECER have the opportunity to set up their businesses in strategic locations close to the source of their raw materials, granting rich sources of supply as well as low transportation cost. 47 Of these industrial parks, six have been identified as Entry Point Projects of national importance, each with an industry-specific focus. They are: Pekan Automotive Park, Kertih Biopolymer Park, Kuantan Integrated Biopark, Gambang Halal Park, Pasir Mas Halal Park and the Integrated Supply Base in Kemaman 46 Malaysia s manufacturing sector is driven by private sector investment, and as an incentive ECERDC develops industrial parks with ready infrastructure to attract investors to ECER. To date, the Region has 14 industrial parks, with 11 located in the high impact ECER Special Economic Zone, the industrial belt of ECER that accounts for 45% of job opportunities and 80% of economic output in the Region.

25 Pekan Automotive Park (PAP) was designated as an automotive production centre under the National Automotive Policy. Identified as an Entry Point Project, the site of PAP is being expanded to cater to existing and new automotive manufacturers and vendors. The halal parks were identified by the Federal Government as Entry Point Projects, supporting the National Key Economic Areas of agriculture, palm oil, healthcare, wholesale and retail business and financial services. The industrial park has an investment target of RM5.2 billion and is expected to create 28,338 jobs. It is also forecast to create 270 new entrepreneurs by 2020, and generate a GNI of RM1.34 billion. PAP is the ASEAN regional base of Volkswagen, Suzuki and Mercedes Benz. Phases 1 and 2 of the automotive park has been completed. It will focus on high value-added manufacturing, with special focus on producing premium and alternative technology vehicles. By 2020, PAP is envisaged to be an ASEAN automotive hub with emphasis on sustainability, both economically and ecologically. It will adopt environmentfriendly practices designed to reduce carbon dioxide emissions. The halal parks house resource-based manufacturing development projects with linkages to the Region s other initiatives such as agriculture and palm oil manufacturing. They are developed on an integrated basis, with shared facilities, infrastructure and utilities that comply with the halal and quality assurance requirements. Both halal parks, which are completed and ready to receive investors, are accredited with the HALMAS certification of the Halal Industry Development Corporation. MALAYSIA-CHINA KUANTAN INDUSTRIAL PARK PAP will draw upon the Region s strategic location as the ideal motor vehicle supply and distribution base for Southeast Asia with the expansion of Kuantan Port. KUANTAN INTEGRATED BIOPARK Previously known as the Palm Oil Industrial Cluster, Kuantan Integrated Biopark s name change reflects ECERDC s objective to promote biotechnology-related activities based on oil palm biomass in the park. It will leverage on existing palm oil resources in the Region, and nurture industries that are in line with the National Key Economic Area relating to palm oil, shifting from basic oleo chemicals to higher value oleo derivatives in agrochemicals, surfactants, bio-lubricants, biopolyols and glycerol derivatives. This will expedite the growth of downstream industries relating to food and healthcare in ECER. This industrial park will have supporting facilities such as research & development, logistics, marketing and business centres. It will be developed in two phases Phase 1 will cover 144 hectares and Phase 2, 103 hectares. Recognising the importance of SMEs in supporting the industry, 15 hectares have been designated as SME lots. The newest addition to ECER industrial parks is Malaysia-China Kuantan Industrial Park (MCKIP). MCKIP is the first industrial park in the country to be accorded national status and is being developed as the sister park of the China-Malaysia Qinzhou Industrial Park in Guangxi. Manufacturing Initiatives in the ECER Initiative Project Location Food and Non Food-based Gambang Halal Park Pasir Mas Halal Food Park Tok Integrated Fisheries Park Gambang, Pahang Pasir Mas, Kelantan Bali & Bachok, Kelantan Kemaman, Terengganu Tanjung Api & Kemunting, Pahang Palm Oil-based Kuantan Intehrated bio-park Kuantan, Pahang HALAL PARKS Automotive Pekan Automotive Park Peramu-Pekan, Pahang 48 ECER is in an advantageous position to grow its halal industry given the abundance of agricultural resources. The industry is anchored in two halal parks: Gambang Halal Park in Pahang and Pasir Mas Halal Park in Kelantan. Both aim to increase their share of the growing global halal market, currently valued at USD2.3 trillion, triggered by rising awareness and demand for food security, safety and hygiene. Heavy Industries Heavy Industrial Park Kemaman, Terengganu Port City Kuantan Port City Pahang 49

26 At the official launch of MCKIP in February 2013, the industrial park had already attracted investment commitments worth RM10.5 billion, which will create some 8,500 jobs for the locals. The single biggest investor was the Guangxi Beibu Gulf International Port Group, which committed RM7.5 billion worth of investments Covering an area of approximately 1,500 acres, MCKIP will leverage on its proximity to Kuantan Port as well as harness synergies existing with other industrial parks in ECER to promote high end and high technology industries such as plastic and metal equipment, automotive components, fibre cement board, stainless steel products, carbon fibre, electric and electronics, information communication technology, renewable energy and others. They represent emerging industries that can tap into the existing supply chain in the ECER SEZ, effectively Greater Kuantan.

27 Agriculture ECER Agriculture Project Sites Agriculture has been the mainstay of the ECER economy for generations, and is one of the key sectors of Malaysia s Economic Transformation Programme. Thefocus now is on transforming traditionally small-scale, production-based farms to large-scale commercial agricultural enterprises that will have a significant impact on improving business viability while contributing to the sustainability of ECERDC s agriculture projects in line with the Government s Rural Transformation Programme. The emergence of biotechnology applications in agriculture has influenced significantly the industrialisation of agri-based products in the Region. This shift will propel ECER s economy by generating more income for rural communities engaged in agriculture, creating more job opportunities, attracting private investment and increasing entrepreneurial opportunities. Kelantan, Terengganu, Pahang and Mersing, Johor with their vast tracts of land, are major contributors to the agricultural and food sector of the economy. Transformation initiatives for this sector are based on developing a fully integrated value chain model that is private sector-driven and market- centric. Projects will involve the application of new technologies and mechanisation, large scale commercial production, adoption of biotechnology processes, with comprehensive linkages across the value chain, which harness products from the biotechnology industry. Tanjung Agas A significant milestone is the incorporation of biotechnology-based initiatives in line with the Bioeconomy Transformation Programme. To date, 10 projects have been identified, with a private investment target of RM2.89 billion by For this purpose, investors are encouraged to explore possibilities in venturing into large scale commercial farming, with wider application of biotechnology and improving supply chain management system, especially those geared towards exporting to global niche market with high quality value added products. 52 A strategic collaboration has also been initiated with the Malaysian Biotechnology Corporation Sdn Bhd (BiotechCorp) for the commercialisation of agricultural projects as part of the Bioeconomy Transformation Programme. ECERDC, BiotechCorp and leading industry players will work in tandem to achieve the national goal for the application of biotechnology in the strategic agriculture value chain activities and promote Malaysia as a global high income bioeconomy by 2020 as outlined in the National Biotechnology Policy.

28 The ECER: Agriculture Sub-Clusters Crop-based Livestock-based Fish-based Fruits Pineapple Herbal & Biotechnology Dairy Cattle Goat & Sheep Breeder Animals Animal Feed Production Marine Capture Fisheries Fish-based Processing Hatchery and Nursery To spearhead developments in the agricultural sectors, investors in the form of Anchor Companies are invited to set up commercial contract farming arrangements with local farmers, as well as establish one-stop Collection, Processing and Packaging Centres (CPPC) in the ECER, to collectively increase the supply-based of high quality raw materials and processed products to manufacturers and retailers locally and abroad. By improving the value chain and supply chain management, the produce from the farms within the ECER will be able to penetrate the global market. This move will eliminate the intermediaries present in the existing supply chain, reduce post harvest losses through better handling of produce and ensure a high level of quality control. These strategic initiatives require the investor to collaborate through smart partnership and strategic alliances arrangement with the other private investors along the value chain in order to ensure sustainability and viability of these projects. CROPS Crop initiatives in ECER will leverage on the Region s vast natural resources, availability of large tracts of fertile land and unique biodiversity to position ECER as Malaysia s hub for food production and non-food based industries. To achieve this, the focus is on increasing production, strengthening product quality and stepping up marketing e orts to penetrate global export markets for ECER s crop and food products. Based on economic projection up to year 2020, the sector's contribution is expected to increase as agriculture sector will undergo intensive investment to serve as one of the major engines of national growth. Promoted agriculture crop in the ECER can be divided into three initiatives. They are the development of a herbal cluster; the development of integrated pineapple plantations; and the development of a cassava cluster. Herbal Cluster The ECERDC s herbal cluster is recognised as an Entry Point Project (EPP) under the Economic Transformation Programme (ETP) for agriculture. This project taps into the country s vast and unique biodiversity to establish Malaysia as a hub for high-value herbal products. It aims to strengthen the production of large scale, high quality raw materials, enhance product quality and marketing e orts to penetrate global export markets for nutraceutical products and botanical drugs. To spearhead the herbal industry in the Region, the Herbal Development Council (HDC) was established to oversee the development of the herbal industry in Malaysia. It identified five R&D clusters of excellence and adopted a coordinated approach for R&D to be undertaken by research institutions and universities in the following five areas: discovery, crop production & agronomy, toxicology & pre-clinical, product development and processing technology. To support upstream initiatives, two plots of agricultural land are being developed for the herbal cluster 406 hectares in Pasir Raja in Dungun, Terengganu and 327 hectares in Chegar Perah in Lipis, Pahang. These herbal clusters will focus on upstream and midstream activities to produce sufficient high quality raw materials for pharmaceutical and nutraceutical industries based in ECER s halal parks

29 ECERDC has identified and promoted 10 high value herbal crops with significant commercial value. Farming and processing of these herbs will be accelerated to meet increasing domestic and global demand for natural health products. The 10 herbs identified are: tongkat ali (eurycoma longifolia), hempudu bumi (andrographis paniculatta), kacip Fatimah (labisia pumila), mengkudu/noni (morinda citrifolia), dukung anak (phyllanthus niruri), misai kucing (orthosiphon aristatus), halia (zingiber officinal ), lemon myrtle (backhousia citriodora) and gaharu/agarwood (aquillaria malaccensis). Integrated Cassava Cluster The emergent biotechnology initiatives in agriculture sector has seen cassava (tapioca) being promoted to meet the increasing demand for starch from food and non-food industries. Three integrated cassava plantations has been indentified, one each in Terengganu, Kelantan and one straddling across Mersing in Johor and Rompin in Pahang. When fully operational, the three integrated cassava clusters occupying 7,783 hectares will produce more than 100,000 tonnes of cassava starch per year for domestic consumption. Investors have the opportunity to be involved the whole value chain of the cassava industries from the upstream development of cassava plantations, midstream processing of cassava starch and downstream processing of modified starch for industrial used. Integrated Pineapple Plantation LIVESTOCK To spearhead and accelerate the growth of the livestock industry, a strategic approach was adopted focusing on developing a comprehensive breeding programme based on a 3-tier system for the dairy cattle and sheep industry. This would result in increased production of locally improved animal breeds for distribution to contract farmers and reduce dependency on imported breeds. Farmers will consequently benefit from higher productivity from their livestock and lower production costs that will translate into higher income for them. Goat and Sheep Cluster ECER s Dorper sheep initiatives have two thrusts: one, to meet rising demand for mutton in Malaysia, and two, to be promoted as a primary economic activity and source of income for agropolitan participants. The Dorper sheep initiatives have resulted in a strategic relationship between nucleus farms commercially operated by the anchor company and Dorper projects in the Pekan Agropolitan and Besut-Setiu Agropolitan. Dorper sheep farming is the primary economic activity in both agropolitans. Currently, Malaysia s goat and sheep production stands at 2,744 tonnes per annum, about 10% of national demand. ECERDC s Dorper sheep initiative is designed to produce up to 30% of national demand. The target is for 19,500 tonnes by Rompin Integrated Pineapple Plantation is an ECERDC initiative to promote and commercialise the planting of fruit crops with great demand in export markets. The plantation has a fully integrated value chain that includes pineapple nurseries, collection centres, and a processing and packaging centre that will produce fresh and processed pineapple for local consumption and export markets. Waste and by-products are used as animal fodder in ECERDC s livestock initiatives and other downstream industries. One ECERDC strategy here is for farmers and smallholders to increase their income through contract farming arrangements with the anchor company, engaged in large scale commercial farming through high technology initiatives throughout its value chain. By then, it is envisioned that there will be significantly larger farms with the commercialisation of goat and sheep farming as well as more ECER farmers participating in downstream activities that would contribute to substantial additional income. To initiate the goat and sheep industry in the Region, ECERDC has developed the Kuala Berang Sheep Breeding & Innovation Centre in Terengganu. The centre will produce high-value Dorper breed that is well-suited for local conditions, and reduce dependency on imported breeds. 57

30 Tanah Merah; and in the district of Mersing in Johor, it is based in Jemaluang. These projects target to produce 50 million litres of milk annually by Demand for dairy products in Malaysia, particularly value-added products, is increasing and as a result, they are able to fetch higher ex-farm fresh milk prices. This will provide more income for farmers engaging in dairy farming. To facilitate the growth of this industry, ECERDC has developed the Muadzam Shah Cattle Research & Innovation Centre (MSCRIC) in Pahang. The facilities consist of a training & technology transfer complex, central performance test complex, animal reproductive test complex, 210-hectare commercial scale fodder and pasture area, milking parlour and milking complex. They will facilitate high-impact continuous research and bridge gaps in breeding technology and farm management in the Malaysian dairy cattle industry. 58 Dairy Cluster Dairy cattle farming projects will be developed across the four states in ECER. In Pahang, it is based in Muadzam Shah; in Terengganu it is based in Kuala Berang; in Kelantan it is based in 59

31 FISHERIES AND AQUACULTURE The development of the fisheries, marine capture and aquaculture industry in ECER will transform the fish-based industry through commercialisation of critical segments along the integrated value chain. They call for the involvement of a competent anchor company and small-medium entrepreneurs specialising in hatcheries and brood stock, grow-out farms and downstream processing. To ensure the maximum utilisation of the available fish resource, it is vital to implement more value-added activities such as processing and identifying alternative sources of production such as aquaculture in marine fish and freshwater fish. Merchong Marine Fish Hatchery and Fish Seed Marketing Centre The focal point of hatchery and brood stock development in ECER is the state-of-the-art Marine Fish Hatchery and Fish Seed Marketing Centre, currently being built in Merchong, Pahang. The anchor company for this project will be required to invest in a high technology recirculation aquaculture system to produce 10 million high-quality tiger grouper and sea bass fingerlings in addition to the production of 600 million post-larvae marine shrimps for growout aquaculture farms in ECER by Aquaculture Grow-out Ponds For aquaculture, investors can look into the possibility of participating in vertically-integrated farming operations, such as the large scale Tilapia Production at Kenyir as well as in the dedicated Aquaculture Industry Zone (AIZ) located in the strategic location within ECER for other marine and brackish fish species such as grouper, seabass and shrimps. 61 The Kuantan Fish Processing Park located at the major fish landing jetty in Kuantan, is designed and built to comply with international food safety standards such as HACCP, GMP and HALAL. This park will prioritise downstream businesses to generate more economic value-added products in fish-based industries. It has a sorting and distribution centre to facilitate fresh fish handling and grading from marine fish capture and production from aquaculture grow-out ponds. It targets to produce 13,650 tonnes of fish-based products annually. 60 Kuantan Fish Processing Park

32 Downstream owner activities in Kuantan Fish Processing Park offer 318 boat owners registered at the Kuantan fish landing jetty the option of selling their fish-capture to the park, giving local fishermen the benefit of higher income generated by direct sales. Operationally, Kuantan Fish Processing Park requires 60 tonnes of raw fish to be processed daily and it has 300 tonnes of cold room storage capacity available to stock the fish produce. Tok Bali Integrated Fisheries Park The Tok Bali Integrated Fisheries Park in Pasir Puteh, Kelantan is a strategic initiative targeted to generate economic activities for thefish-based industry, integrating it with marine ecotourism and as a supply base port for heavy industrial activities in the area. These initiatives are in line with the Economic Transformation Programme to boost the export potential of processed foods by integrated processing parks, designated as Entry Point Projects (EPP)

33 - UMK (Bachok), UDM (Besut), - Knowledge Park (Taman Ilmu) Human Capital Development - USM (Kota Bharu), KU Twintech (Kota Bharu), UiTM (Machang) THAILAND - Centre for Industry-Academia Collaboration (CIAC) - Centre for Innovativeness & Product Creativity Centre for Heritage & Culture and Entrepreneurship and Management Training Programme (UMK Bachok) - Centre for Innovativeness and Product Creativity (UiTM Machang) - Regional Centre for Halal Products and Centre for Bio-Technology and Herbal Research (UDM Besut) Kota Bharu - UMK (Jeli) Bachok - Business Entrepreneurship and Management Training Programme Jertih-Kg. Raja-Besut Jeli Kuala Terengganu - UMT (Kuala Terengganu) George Town - UDM (Kota & Kusza), - Centre for Industry-Academia Collaboration (CIAC) - Institute of Biodiversity Oceanography and Centre for Social Development Dungun - UiTM (Dungun) Ipoh Kertih - Centre for Industry-Academia Collaboration (CIAC) - Hospitality & Tourism Management and Tourist Guide Training Centre (UiTM Dungun) Ulu Tembeling Kuala Lipis Chukai - UMP (Pekan) Kuantan - UIAM ( Kuantan), - Centre for Industry-Academia Collaboration (CIAC) - Post-Graduate Studies on Facilities Management and Biodegradable Products and Biofuel Research Centre (UMP) Human Capital Development is a key driver for ECER to realise the Vision and Mission to transform itself into a high income developed Region by The ECER Master Plan identified Human Capital Development as paramount to the creation of a critical mass of trained, skilled and knowledgeable workers for sustainable economic growth in the Region. Tanjung Agas Pekan/Peramu Jengka KUALA LUMPUR - UNITEN (Muadzam Shah) Muadzam Shah To achieve this, ECERDC has adopted a multi-pronged approach that sweeps across all segments of the local population. The goal is to nurture human capital that will result in a more dynamic workforce and an entrepreneurial business community, both vital to ensure the success of ECER projects as well as to attract and sustain foreign and domestic investments. - UiTM (Jengka) - Centre for Industry-Academia Collaboration (CIAC) - Skills Training and Accreditation & Certification Centre for Wood-based Products (UiTM Jengka) Malaysia s reputation as centre of educational excellence and ECERDC s goal to drive the Region s transformation through human capital development offer considerable opportunities to individual investors and companies. ECERDC s human capital development programmes, have two thrusts : one to create a skilled workforce, with the appropriate skill sets and talents to meet the demands of existing and emerging industries in the Region; two, to create a pool of entrepreneurs and small medium enterprises for the Region s four clusters Tourism, Oil, Gas & Petrochemicals, Manufacturing and Agriculture. The end game is to ensure that the local population is not left out of the rapid transformation and new prosperity. Kuala Rompin Mersing N Johor Bahru SINGAPORE KILOMETRE Key Initiatives-New University/Branch Campus Key Initiatives Sites Existing University/Branch Campus Primary Routes (Existing & Proposed) Centres of Excellence Expressways (Existing & Proposed) Airport Railway (Existing & Proposed) Port > 3 Universities, Colleges + Skills Training Centres 2-3 Universities + Skills Training Centres 1 University + Polytechnic + Skills Training Centres 65 Towns 64 LEGEND

34 Listed below are some of ECERDC's human capital development programmes that are being carried out in the Region. Investors especially smaller scale businesses can explore opportunities presented by these programmes. New Centres of Excellence initiated under the ECER Centre Institution National Talent Enhancement Programme The Economic Transformation Programme is a focused, inclusive and sustainable initiative by the Malaysian government to upgrade Malaysia into a high income economy by the year of To boost competitiveness, the government announced six Strategic Reform Initiatives, and one of them is human capital development. ECERDC collaborated with PEMANDU a unit in The Prime Minister s Department, to implement the National Talent Enhancement Programme (NTEP), one of the projects identified under this Strategic Reform Initiative. Launched in 2012, NTEP focuses on developing talents specific to its key economic drivers: Tourism, Oil, Gas & Petrochemicals, Manufacturing and Agriculture. Strategic partnerships are being forged with private organisations to train fresh engineering graduates for a period of between six and 12 months. The goal is 100% employability of selected candidates. Entrepreneurship Development Programme The ECER Entrepreneurship Development Programme (EEDP) targets entrepreneurs in the Region who wish to grow their business. The programme aims to increase the involvement of the Bumiputera Commercial and Industrial Community and Small and Medium Enterprise regardless of ethnicity in the development of ECER. Centre for Industry-Academia Collaboration (CIAC) Regional Centre for Halal Products Centre for Innovativeness & Product Creativity Centre for Heritage & Culture Hospitality & Tourism Management and Tourist Guide Training Centre Institute of Biodiversity & Oceanography Centre for Bio-Technology and Herbal Research Skills Training and Accreditation & Certification Centre for Wood-based Products Entrepreneurship and Management Training Programme Post-Graduate Studies on Facilities Management Biodegradable Products and Biofuel Research Centre Centre for Social Development UMK, UMT, UDM, UMP, UiTM Machang, UiTM Dungun & UiTM Jengka UDM UiTM Machang & UMK UMK UiTM Dungun UMT UDM UiTM Jengka UMK UMT UMP UMT 66 The EEDP has embarked on initiatives with three strategic partners, namely, SIRIM, Agrobank and GIATMARA who provide soft development assistance, financial assistance and training expertise respectively. empower ECER The empower ECER programme addresses rural communities in Kelantan, Terengganu and Pahang. It adopts the rural community and development approach to reach students and adults such as the unemployed, underemployed, single mothers and aspiring youths to make them a vital force in the Region. empower ECER has two components the one-year Academic Training Programme for examination year students and 15 to 18-month Skills and Entrepreneurship Training Programme for adults. empower ECER distinguishes itself with the following features: It brings training facilities to selected participants in rural communities. It provides guidance and motivation to bring about a positive change in the mindset of participants, typically those with little confidence and relatively low self esteem. It uses surveys to determine the needs and interests of the community and participants prior to drawing up training modules. It adopts flexible teaching methods and time-tables, with training sessions often conducted on weekends for the convenience of participants. It modifies the syllabus to suit the level of comprehension of participants. New University Campuses in the ECER Institution Universiti Malaysia Kelantan (UMK) Bachok Campus Jeli Campus Universiti Sultan Zainal Abidin Besut Campus Kuala Terengganu Campus Universiti Malaysia Terengganu (UMT) Kuala Terengganu Campus Universiti Malaysia Pahang (UMP) Pekan Campus, Gambang, Kuantan Campus Courses offered Entrepreneurship & business Agro industry & natural resources Creative technology & heritage SME Development Third language studies Islamic studies Accounting & business Agriculture & biotechnology Food technology & processing Animal science Information multimedia technology Arabic & education Science & technology Economics & management Agro-technology & food science Marine science Oceanography, tropical aquaculture & marine biotechnology Engineering Technology-based sciences 67

35 Information Communication Technology Initiatives The ECER Master Plan has instituted a number of initiatives to bridge the digital divide, as well as prepare the region's human capital to condently participate in a knowledge-based economy. The Information Communication Technology Development will cover infrastructure such as, learning facilities infotainment, data center, telecommunication hub and product development labs in Gambang Technology Park, Pahang allowing them to work from remote locations, with the use of broadband and xed-line access. The Gambang Technnology Park in Pahang is designed to spur high-tech related industries in the State and the rest of the economic corridor. The technology park showcase components such as ICT, biotech and agritech centre as well as halal food park. Small and Medium Enterprise investors, inventors, manufactures and other enterpreneurs will be able to benefit from the state-of-the art technology infrastructure available at the park. Kuala Terengganu is expected to be a major IT hub for the ECER. The focus there will be the establishment of a Global Animation Centre, which will allow investors to explore opportunities in setting up advanced computer animation and digital 3D graphics centres. Investors might also want to explore opportunities in outsourcing and contracting animation work for major global production houses and studios from around the world. Industry-Academia Collaboration As the march towards economic progress continues, there will be close collaboration between the Region's industries and academic centres. In each of the five universities in the ECER, Centres of Excellence (COE) have been established to accelerate the human capital development to suit the needs of the industry, particularly in tourism, oil and gas, manufacturing, agriculture, halal products, wood-based products and bio-technology. In return, the industry works closely with the R&D centres to help the universities update their course curriculum in tandem with new workplace requirements. These strategic collaborations are essential towards in enhancing the universities' international image and recognition, enabling them to form more collaboration with foreign universities. For this purpose, the universities in the seven locations (UDM Besut, UMK Bachok, UMP Pekan, UMT Kuala Terengganu and UiTM Dungun, Machang and Jengka) have set up Centres of Excellence (CoE) for industry-academia collaboration. The private sector is also invited to work with the universities to tailor the curriculum to meet the needs of the industry. The establishment of four new universities as well as the upgrading of various existing institutions, polytechnics and branch campuses will bring on-stream greater numbers of skilled and educated human capital, capable of supporting the Region s commerce and economic goals in the coming years. The establishment of the International Digital Business Exchange (IDBX) in ECER, as an Internet exchange regional hub at competitive prices is an important move in fast-tracking IT development in the region. 68 The principle objectives of the IDBX include establishing a wider coverage for local businesses and providing affordable broadband services. The IDB X will also optimise the return on IT investments, while facilitating technology transfer. The IDBX s establishment will result in better xed-line, xed-wireless, data/ip and ISP gateway services for the ECER as a whole. 69

36 DOING BUSINESS IN MALAYSIA The ECER operates in a pro-business and investor-friendly environment, enabling individual investors and companies the opportunity to grow their businesses. The Region is well-connected by road, air and sea. ECER is also well-served by quality ICT services, easily accessible amenities and reliable public utilities. Investors planning to invest in ECER are encouraged to contact ECERDC s One-Stop Centre or the nearest overseas office of the Malaysian Investment Development Authority (MIDA). Included in this investment guide is useful information made available by MIDA at its website gov.my that will enable investors to make preliminary assessment on the costs involved in doing business in Malaysia. Company Tax Resident and non-resident companies Resident companies with paid-up capital of RM2.5 million (US$781,250) and less at the beginning of the basis period for a year of assessment on the first Rm500,000 (US$156,250) chargeable income on subsequent chargeable income (Source: Inland Revenue Board) 25% 20% 25% Useful Information for Investors Rental Rates for Prime Office Space (Source: CH Williams, Talha & Wong) Location RM US$ Kuantan, Pahang Kuala Terengganu, Terengganu Kota Bharu, Kelantan Costs of Industrial Land & Factory Building Cost of Industrial land* Location Selling Price per ft² Quit rent per annum Johor RM Pahang RM US$ Light ind. RM1,600 per ha. US$500 per ha. Medium ind. RM2,100 per ha. US$656 per ha. Heavy ind. RM2,400 per ha. US$750 per ha. 2ha RM 15 per 100m² US$4.69 per 100m² > 2 ha RM10 100m² US$3.13 per 100m² Annual assessment rate (% of property value) Cost of Ready-built factory** Selling price per ft² of floor area RM US$ RM US$ Rental per ft² per month RM US$ RM US$ Personal Income Tax Resident individuals with chargeable income of RM16,667 (US$5,208) and above per annum (after deduction of personal reliefs) Non resident individuals (not entitled to any personal reliefs) 26% (Source: Inland Revenue Board) Internet Service Providers In Malaysia, there are several licensed Internet Service Providers (ISPs) and amongst them are TM Net Sdn. Bhd. (Telekom Malaysia Berhad), JARING (MIMOS Bhd.), DigiNet (DiGi Telecommunications Sdn. Bhd.), TimeNet (TT dotcom Sdn. Bhd.) and Maxis Broadband Sdn. Bhd. Average Haulage Rates Area 1% - 26% Haulage Rates Road Tolls FAF Total 20 & 40 (RM) (RM) 12.47% Period from 1st May & 40 Kelantan (Kota Bharu) 3, , , Pahang (Kuantan) 1, , (Source: Inland Revenue Board) Terengganu (Kerteh) 2, , RM US$ Terengganu RM US$ RM8 20 per 10m² US$ per 100m² 5 10 RM60 99 US$19-31 RM US$ (Source: MIDA) International Schools In Malaysia 70 Kelantan RM9.00 US$2.88 RM1,000 per ha² US$313 per ha (Source: *State Economic Development Corporations (SEDC); **MIDF Property Bhd & SEDCs) RM US$ There are more than 30 international schools registered with the Ministry of Education, Malaysia. These schools are located in the federal territories of Kuala Lumpur and Labuan, and the states of Johor (Johor Bharu), Kelantan (Kota Bharu), Melaka (Malacca), Negeri Sembilan (Mantin), Pahang (Kuantan), Penang (island), Perak (Ipoh), Sabah (Kota Kinabalu) and Sarawak (Kuching). 71

37 THE ECER INCENTIVES PACKAGE The ECER is envisioned as a pro-business and investment The ECER is envisioned as a pro-business friendly environment, with attractive incentives and whichinvestment will allow friendly environment, with attractive incentives which will allow investors the opportunity to grow and reap returns from their investors theinitiatives. opportunity grow andintroduced reap returns fromregion their projects and Thetoincentives for the projects initiatives. The to incentives for the region places it and in good standing become introduced one of Malaysia's most places it in good standing to become one of Malaysia's most attractive investment destinations. attractive investment destinations. In addition to the current package of incentives, the Government In addition to the current package of incentives, the Government has approved new new fiscal fiscal incentives incentivesfor forspecific specificactivity activityunder and has approved identified undercoupled the ECER Master Plan.and Coupled with the ECERlocations Master Plan. with the new improved the new and improved transportation networks, the region aisboost set to transportation networks, the region is set to experience experience a boost its domestic and foreign direct investment. in its domestic and in foreign direct investment To be eligible eligible for package of of incentives, incentives, projects To be for the the special special ECER ECER package projects have to to be be duly duly approved approved by by the the ECER ECER Development Development Council. Council. have

38 ECER Incentives ECER Incentives TOURISM Promoted Activities Type of Incentives i. Culture and Heritage ii. Island tourism iii. Mainland coastal tourism iv. Cross border tourism v. Eco-tourism vi. Health tourism vii. Hallmark Events Hotels and resort operation Integrated resorts, Themeparks, Amusement and family entertainment centres, Cultural centres, Conference centres, Exhibition centres, Regional operation of hotel and leisure services Making of batik, songket or royal tenun Making of brassware or silverware Making of traditional kites Woodcarving Selected art and craft projects including print-making or sculpting Customised incentives based on merit of each case, or Income tax exemption of 100% for 10 years commencing from the year company derives statutory income, or Income tax exemption equivalent to 100% of qualifying capital expenditure (Investment tax allowance) for 5 years Stamp duty exemption on land or building acquired for development Withholding tax exemption on royalty and technical fees up to 31 December 2020 Application to be submitted to ECERDC on or before 31 December 2020 Import duty and sales tax exemption on machinery, equipment, and consumables that are not produced locally and used directly in the activity. Application to be submitted to MIDA Single deduction up to a maximum of RM1 million for a year of assessment for sponsors of such event approved by ECERDC Claims to be submitted to Inland Revenue Board OIL, GAS AND PETROCHEMICALS Promoted Activities Type of Incentives Selected oil, gas and petrochemical products or activities Customised incentives based on merit of each case, or Income tax exemption of 100% for 10 years commencing from the year company derives statutory income, or Income tax exemption equivalent to 100% of qualifying capital expenditure (Investment tax allowance) for 5 years Stamp duty exemption on land or building acquired for development; Application to be submitted to ECERDC on or before 31 December Import duty and sales tax exemption on machinery, equipment, and consumables that are not produced locally and used directly in the activity. Application to be submitted to MIDA MANUFACTURING AND MANUFACTURING RELATED SERVICES Promoted Activities Type of Incentives Selected manufactured and agro-based products Manufacturing related services Customised incentives based on merit of each case, or Income tax exemption of 100% for 10 years commencing from the year company derives statutory income, or Income tax exemption equivalent to 100% of qualifying capital expenditure (Investment tax allowance) for 5 years Stamp duty exemption on land or building acquired for development; Application to be submitted to ECERDC on or before 31 December Import duty and sales tax exemption on machinery, equipment, and consumables that are not produced locally and used directly in the activity. Application to be submitted to MIDA 74 75

39 ECER Incentives AGRICULTURE AND AGRICULTURE RELATED SERVICES ECER Incentives KNOWLEDGE, EDUCATION AND ICT DEVELOPMENT Promoted Activities Type of Incentives i. A company investing in a related company that undertakes promoted agricultural/agro-based processing project and owns at least 70% shareholding in that related company. ii. Company undertaking the promoted project or activity. Agriculture Cultivation of kenaf, vegetable, fruit, herbs, spices or cocoa, Biomass Plantation including cassava, acacia mangium, leucana leucocephala Planting of Hevea brasiliensis Floriculture including ornamental flowers Aquaculture Inland and Deep sea fishing Rearing of cattle, buffalo, goat, sheep, ostrich, turkey and quail Agriculture related services Collecting, processing and packaging of agricultural produce Collection and marketing of agricultural produce Deduction to the amount of investment made in the promoted project or activity. Customised incentives based on merit of each case, or Income tax exemption of 100% for 10 years commencing from the year company derives statutory income, or Income tax exemption equivalent to 100% of qualifying capital expenditure (Investment tax allowance) for 5 years Stamp duty exemption on land or building acquired for development Application to be submitted to ECERDC on or before 31 December Import duty and sales tax exemption on machinery, equipment, and consumables that are not produced locally and used directly in the activity. Application to be submitted to MIDA Promoted Activities Type of Incentives Information, communication and technology development and services Establishment of universities and colleges, skills training institute, training and service centre and research and development institutions. Customised incentives based on merit of each case, or Income tax exemption of 100% for 10 years commencing from the year company derives statutory income, or Income tax exemption equivalent to 100% of qualifying capital expenditure (Investment tax allowance) for 5 years Stamp duty exemption on land or building acquired for development Withholding tax exemption on royalty and technical fees up to 31 December 2020 Application to be submitted to ECERDC on or before 31 December Import duty and sales tax exemption on machinery, equipment, and consumables that are not produced locally and used directly in the activity. Application to be submitted to MIDA INDUSTRIAL PARKS/FREE ZONES DEVELOPMENT Promoted Activities a) Developer Development of Industrial Park or Free Zone. b) Development Manager Appointed by Developer to provide management, supervisory or marketing services of Industrial Park or Free Zone. c) Park Manager Provide park management services including maintenance, marketing and rental of common facilities and utilities services in Industrial Park or Free Zone 76 Type of Incentives Income tax exemption of 100% for 10 years commencing from the year company derives statutory income, or Stamp duty exemption on land or building acquired for development Application to be submitted to ECERDC on or before 31 December

40 Other Incentives TERAS PROGRAMMES Other Incentives FACILITATION FUND PROGRAMMES Objective The programme is to identify Bumiputera companies with high growth potential and help them achieve business improvement by providing appropriate supports such as funding, talent development and participation in business opportunities based on merit.the program is to develop high-potential Bumiputera companies in the next five to ten years. Criteria Bumiputera equity preferably at 60% - 100% Submission Approval Authority CEO / Managing Director is Bumiputera Majority of Management is Bumiputera Bumiputera companies with good financial performance and status Not subsidiary of GLC/MNC (associate company is allowed) Preferably in the NKEA sector Good Credit Bureau Rating of (<=20% default) TERAJU@ECER Secretariat Recommended by TERAS@ECER Committee (Joint Committee between TERAJU& ECERDC) Endorsed by TERAJU Delivery Committee Objective Government grants as a tipping point to assist companies to secure commercial loans To promote the implementation of private sector projects of high value TERAJU@ECER Fund Allocation : RM 100 million UKAS (Public-Private Partnership Unit, Prime Minister's Department) Eligibility : 51% Bumiputera : 35% Bumiputera & CEO/MD must be Bumiputera (Listed Companies) Investment Size : RM5 million RM50 million Funding Limit Submission Approval Authority Fund Allocation Eligibility Investment Size Funding Limit : 15% of the total project cost or up to RM7.5 million (whichever is lower) : TERAJU@ECER Secretariat : Recommended by TERAJU@ECER Facilitation Fund Committee & endorsed by TERAJU Delivery Committee : RM 20 billion : All (FDI or DDI) : > RM 100 million : 10% of the total project cost or up to RM 200 million (whichever is lower) Projects that are NOT ELIGIBLE: Projects in financial / banking sector; Projects in the incubation or R&D stage; Projects which involve mergers & acquisition; Projects that have received Government allocation and / or funding; Government procurement projects; Investment in foreign countries; Projects that are highly dependent on government support; and Projects whereby Government needs to bear a significant portion of the risks Submission : UKAS, Prime Minister s Department Approval Authority : UKAS 78 79

41 ECERDC:THE ONE-STOP CENTRE FOR INVESTORS The ECERDC plays a leading role in promoting and stimulating economic and social development as well as private sector investment in the Region. The ECERDC acts as the one-stop centre to fast track investment applications and approvals as well as provide counseling, advisory services, processes fiscal and non-fiscal incentives and various solutions to help make the process of investment easy for investors. The ECER is set to become a cost-competitive and vibrant investment destination for investors Investors may look forward to an attractive package of fiscal and non-fiscal incentives exclusive to the Region. Customised incentives aimed at meeting the investors' needs and requirements are also given to investors on a case-to-case basis. For more information on the ECER Special Incentives, investors are most welcome to contact the ECERDC. The ECERDC s role as a one-stop centre is attracting more investors to the Region.

42 Contact Us If you are an investor planning to establish or expand your business opportunities in the East Coast Economic Region (ECER) we will provide you with professional assistance. We will be the first point-of-contact for all your investment inquiries. Companies planning to start or expand operations in the ECER can obtain information and assistance from the East Coast Economic Region Development Council. We will help you harness the ECER s competitive edge and capabilities to achieve your business objectives. East Coast Economic Region Development Council (ECERDC) secretariat@ecerdc.com.my Tel : Fax : Website :