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Manufacturing accounts for 27.4% of Sarawak’s economy and employs about 11.2% of the workforce. The sector is expected to grow 5% per annum until 2030. Endowed with forests and vast plantation resources that are at risk of being depleted in the long term, the state is aiming to transition its production base away from basic resources and commodities extraction into value-added manufacturing as part of Malaysia’s Vision 2020 mandate to attain high income status by the turn of the decade. With an abundant and cost-competitive energy mix, proximity to key Asian markets, and a proactive local government that offers attractive incentive packages to investors, Sarawak possesses the key ingredients to become a significant industrial player.

This chapter contains interviews with Paul Koon, Group CEO, Press Metal; Aaron Toh Chee Ching, Group Managing Director and CEO, Sarawak Cable Toh, Sarawak Cable Berhard; and Sarudu Hoklai, General Manager, Sarawak Timber Industry Development Corporation. 

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Blessed with an abundance of hydro, coal and gas resources that one would be hard pressed to find elsewhere, Sarawak has a comparative advantage that is being leveraged to produce bulk power at competitive prices in order to attract capital-intensive investments in heavy industry. Already a net exporter of liquefied natural gas (LNG), new hydroelectric projects position the state with the potential to become a central provider of power in the proposed ASEAN Power Grid, and supply agreements have already been signed with  neighbouring Indonesia, while discussions with Peninsular Malaysia, Sabah and Brunei Darussalam are ongoing. Malaysia’s vision for 2020 calls for Sarawak to attain the status of a high-income state by the turn of the decade via transitioning its production base away from basic commodities into more value-added manufacturing. Further unlocking sustainable and competitively priced energy is critical to achieving this goal.

This chapter contains interviews with Torstein Dale Sjotveit, CEO, Sarawak Energy; and Zulkifle Osman, Managing Director, Sarawak Hidro.

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One of the five regional economic corridors being developed throughout the country, the Sarawak Corridor of Renewable Energy (SCORE) is part of the federal government’s national agenda to propel the country into achieving high-income status by 2020. SCORE’s game plan for transitioning Sarawak into a high-income state is premised on transforming its economic base towards advanced industry by more effectively using and adding value to its vast natural resources. At the same time, clean and affordable power provides a competitive advantage for attracting energy-intensive investment. The impetus now is on the state to ramp up its educational efforts and streamline immigration procedures to ensure that the stock of human capital keeps pace. Port projects are being monitored closely, as not only does capacity need to be expanded, but the construction of purpose-built storage facilities is also required to cater to new materials being produced by companies in SCORE such as aluminium products, pulp and paper, bio-diesel, downstream timber products and agro-produce.

This chapter contains interviews with Wilson Baya Dandot, CEO, Regional Corridor Development Agency (RECODA); Takeo Suzuki, President, Tokuyama Malaysia; and Isaac Lugun, CEO, Samalaju Industries. 

From large, multinational funds to local Malaysian banks, national and international players have historically been drawn to the state in large part by the opportunities available in financing its substantial oil, gas, timber and palm oil industries. Today, they are being drawn by the state’s major development plan, the Sarawak Corridor of Renewable Energy, and other mega-projects currently being implemented. A huge amount of capital investment will be required for the state to meet its development goals, and it is looking to source this in part by issuing conventional and Islamic bonds. Finance-related activity in Sarawak is likely to grow in importance and intensity over the coming years. While a great deal of work remains to be done in order for Sarawak to make good on its promise of development for everyone in the state, its increased visibility and popularity among investors and financiers, domestic and international, is a sure sign that it is headed in the right direction.

This chapter contains interviews with Wong Soon Koh, Minister of Finance II and Minister of Local Government and Community Development; and Rauf Rashid, Country Managing Partner, EY Malaysia.

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An abundant supply of affordable energy and financial incentives are making Sarawak an increasingly popular destination for foreign investment, which is changing the shape of the state’s economy. Powered by ample, inexpensive electricity generated by a string of new hydroelectric power plants and acres of greenfield sites, the epicenter of new investment is the Sarawak Corridor of Renewable Energy. Lured in by a wave of generous financial incentives, investors from across Asia have been signing on to produce a wide array of products ranging from aluminium ingots to processed foods. The already robust trade ties within the region are expected to continue to grow as investments bear fruit in terms of increased manufacturing output, creating a ready supply of goods to trade just as the further reduction to trade barriers within ASEAN opens up the market, with a special emphasis on the East ASEAN Growth Area, in which Malaysia is included.

This chapter contains a viewpoint from Xi Jinping, President of China; and interviews with Lim Jock Seng, Minister of Foreign Affairs and Trade II of Brunei Darussalam; and Le Luong Minh, Secretary-General, ASEAN.

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While oil and gas production, timber harvesting, and agriculture continue to dominate Sarawak’s economic DNA, significant improvements in transportation and utility infrastructure are now giving rise to an era of economic diversification led by new heavy industries. The state’s relatively small population, large geographical area and diversified economy are providing job opportunities for the state’s inhabitants. The state compares quite favourably to its peers in terms of per capita GDP at $12,507, up from $12,288 in 2012 and $9,150 in 2009. While early investments are primarily being made in energy-intense sectors such as basic metal refining and production, the application of more value-added services focused on the state’s renewable resources has already yielded two large food processing plants and is expected to lead to further development in related fields such as timber and other wood-based manufacturing, advanced ceramics, biotechnology and aquaculture, as well as further downstream applications for the palm oil industry and the wider agriculture sector.

This chapter contains an interview with Awang Tengah bin Ali Hasan, Minister of Resource Planning and Environment, Minister of Public Utilities and Minister of Industrial Development.