MCKIP secures RM19b in investments, targets another RM10b this year

SINCE its launch in 2013, the Malaysia-China Kuantan Industrial Park (MCKIP) has secured RM19 billion worth of investments. Its master developer, Malaysia-China Kuantan Industrial Park Sdn Bhd (MCKIPSB) remains optimistic as it targets to attract another RM10 billion this year.

“It would be good if we could get RM8 billion to RM10 billion worth of investments this year,” MCKIPSB chairman Datuk Soam Heng Choon said at the opening of the company’s sales office in Kuala Lumpur on Jan 9.Also present was Second Minister of International Trade and Industry Datuk Seri Ong Ka Chuan, who officiated at the event.

The industrial park is located on a 3,000-acre (1,214ha) tract and has a gross development value of roughly RM2.6 billion. Due to be completed in 7 to 10 years, the leasehold industrial park is poised to create more than 24,000 jobs on the east coast.

MCKIPSB is a 51:49 joint venture between a Malaysian and a Chinese consortium. IJM Land Bhd, a wholly-owned subsidiary of IJM Corp Bhd, holds 40% equity interest in the Malaysian consortium, called Kuantan Pahang Holding Sdn Bhd, while Sime Darby Property Bhd and the Pahang government each hold a 30% stake.

Some 95% of the Chinese consortium’s 49% stake is held by state-owned conglomerate Guangxi Beibu Gulf International Port Group while Qinzhou Investment Co holds the remaining 5%.

Soam, IJM Corp’s CEO and managing director, tells City & Country that MCKIP continues to attract a high level of interest. “Although we have opened our doors to investors [from] all over [the world], we are mainly targeting the Chinese as they have more appetite for these types of developments and industries. Given the global economic slowdown, we are confident that investors, especially those from China, will venture into other countries like Malaysia to further their businesses. MCKIP is open to industries of all sizes, though the primary focus is heavy industry followed by medium-sized industries and logistics.

“It is also our goal to help the government to boost the economy on the east coast. We hope to create a lot of job opportunities and a more balanced distribution of talents on the west and east coasts [of the peninsula],” he says.

According to Soam, MCKIP has gained momentum in the past 12 months, despite the global economic downturn. Last year, it secured a total investment of RM5.6 billion, raising the total cumulative approved and committed investments to RM19 billion.

Wuxi Suntech Power Co Ltd, came on board last year with investments worth RM4 billion in crystalline silicon solar cells and modules. MCKIP’s first and currently the largest investor, Alliance Steel (M) Sdn Bhd, is investing RM5.6 billion to develop a 3.5-million-tonne capacity steel mill in the industrial park. The factory is currently 40% completed and the first phase of the project is expected to be operational by the end of the year.

Other investors include Guangxi Zhongli Enterprise Group Co Ltd (with an investment value of RM2 billion for clay porcelain manufacturing), Zkenergy (Yiyang) New Resources Science & Technology Co Ltd (RM215 million for the manufacture of renewable energy applications and an engineering base), Guangxi Investment Group Co Ltd (RM580 million for an aluminium processing plant) and LJ Hightech Material Sdn Bhd (RM1 billion for the production of concrete panels and activated rubber particles from scrap tyres).

“We are confident that the ongoing expansion of Kuantan Port and MCKIP, as well as key infrastructure upgrades to enhance connectivity, will further bolster MCKIP’s position as a key investment hub in Asia-Pacific,” says Soam.

Kuantan Port Consortium Sdn Bhd, in collaboration with the government, has embarked on a port expansion project — the New Deep Water Terminal — to cater for bulk carriers of up to 200,000 DWT or 18,000 20-foot equivalent unit (TEU) container ships. Work on the expansion project commences in 2015.

MCKIP was proposed by Prime Minister Datuk Seri Najib Razak to Chinese Premier Wen Jiaboa, during the original launch of the China-Malaysia Qinzhou Industrial Park in April 2012, to drive the development of industrial clusters in both countries. MCKIP has been accorded “National Industry Park” status. Together with its sister park, China-Malaysia Qinzhou Industrial Park, the two parks have been identified by both governments as “iconic projects for bilateral investment cooperation”.

This article first appeared in City & Country, a pullout of The Edge Malaysia Weekly, on Jan 16, 2017. Subscribe here for your personal copy.