OBG talks to Isaac Lugun, CEO, Samalaju Industries

Interview: Isaac Lugun

How has the demand for a township at the Samalaju Industrial Park evolved in line with the heightened activity of SCORE’s early investors?

ISAAC LUGUN: Understanding the history of Samalaju and the development of energy-intensive industries at the Samalaju Industrial Park is critical to charting the development process for all of the Samalaju Township. The rapid rise of heavy industrial activity at Samalaju has been a fortuitous one, as the allocation of power generated from Sarawak’s Bakun Dam to this industrial growth area has created a consistent block of power within Borneo that is immediately ready for use. This in turn created the early investor demand that subsequently became identified as the Samalaju Growth Node within SCORE.

Tokuyama was the first investor to be present at Samalaju and with them came the need to build a workers’ camp. The joint venture company of Samalaju Properties, a partnership between Cahya Mata Sarawak, Naim Cendera and the Bintulu Development Authority, was put together to respond to this demand. The construction of this temporary workers’ camp was completed very quickly, taking only about six months from start to finish. There is always the need for a loss leader in order for these kinds of projects to take off, but the development displayed how these fast-track projects were possible.

With further investment has come the need for a fully-fledged township at Samalaju. Estimates suggest that 45,000-50,000 people will live and work in Samalaju by 2020, taking into account the support industries that will locate there as well, and 2126 acres adjoining the Samalaju Industrial Park have been acquired for this purpose. The normal development cycle for a township can be up to 20 or 30 years, but this is a unique case where everything has to be fast-tracked, as demand is imminent.

When comparing the development of Samalaju with that of Bintulu decades before it, the major difference is that Bintulu existed as a small town prior to the time when the liquefied natural gas industry took off there. This comprised a skeleton city to build off, whereas Samalaju is being developed almost entirely from scratch.

In what ways is the challenge of infrastructure being tackled, and how are you planning for the long-term sustainability of the township?

LUGUN: In order for the township to be developed, five key pieces of infrastructure need to be present, namely roads, drainage, sewage, electricity and water. To this end, a public-private partnership is needed wherein the public sector takes charge of infrastructural development while the private players focus on the residential and commercial development aspects. The standard of the township must be very high due to the large volume of foreign workers present, who carry varying requirements and levels of expectation. Addressing the existing perception of the township as dirty and industrial is also crucial, a factor that prompted our decision to go the extra mile to achieve green certification, as this is a marker that Samalaju will be a highly liveable place.

Furthermore, there is a need to give small business owners a foothold in the market, for which an initial 200 acres have been allocated as the Samalaju Light Industrial Estate, intended to house the local support and services industries that will inevitably grow from SCORE. During the development of Bintulu, there was a lack of real engagement with the local inhabitants already living on the fringes of town. However, at Samalaju, in keeping with the theme of sparking local economic activity, agriculture-based initiatives are being undertaken. Lastly, a four-star, 177-room hotel was completed on a oneyear fast-track schedule and opened for business in December 2014. It will complement the township by catering for short-term and last-minute visitors. All of these measures will combine to ensure both the accessibility and the longevity of the township.