Supercharging special economic zone
KUALA LUMPUR: Malaysia has partnered with six local and global financial institutions to drive investments and financing support for its special economic zone in Johor.
The banks are Malayan Banking Bhd (Maybank), CIMB Group Holdings Bhd, Bank of America, HSBC, Sumitomo Mitsui Banking Corp and CGS International Securities.
They inked Letters of Intent (LoIs) with the Economy Ministry on Monday, outlining interests in joint efforts to supercharge the Johor-Singapore Special Economic Zone (JS-SEZ).
Malaysia and Singapore established JS-SEZ in January, looking to boost investment and ease the movement of goods and people between the neighbours.
Malaysia aims to get 50 high-value projects off the ground and create 20,000 high skilled jobs at the zone within the next five years.
Economy Minister Datuk Seri Rafizi Ramli said talks are being held with a European-based bank as the country looks to rope in more partners to promote the cross-border initiative.
Rafizi said these partnerships, sealed during the JS-SEZ Partners Dialogue here, underscore the growing investor confidence in the SEZ's potential to drive economic transformation in southern Johor and beyond.
Maybank became the first bank to come up with potential investments from its clients.
The bank supports up to RM2.35 billion in potential investments through LoIs submitted by four Singapore-based firms.
The four are Alpine Renewables, Edible Oils Pte Ltd, Centurion Corporation Ltd and Thomson Medical Group Ltd (TMG).
"These LOIs signal confidence in the JS-SEZ's strategic value," Maybank president and group chief executive officer Datuk Khairussaleh Ramli said in a statement.
"Maybank takes a long-term view of the zone's success and actively promotes broad-based participation from MSMEs to mid- to large-cap and multinational corporations in diverse sectors.
"We believe that inclusivity is fundamental to building a vibrant, integrated and resilient ecosystem within the JS-SEZ."
Alpine Renewables, through its Malaysian unit Alpine Assets Management Sdn Bhd, plans to invest about RM350 million over the next three years in a renewable energy feedstock pretreatment and biodiesel refinery facility at Tanjong Langsat Industrial Port.
The facility is expected to process up to 600,000 tonnes of renewable feedstock oil annually, strengthening the port's role as a regional hub for marine biofuels.
Alpine currently supplies biofuel feedstocks to markets in Europe, China, South Korea and the United States.
Centurion Corporation, an SGX-listed provider of worker and student accommodation, intends to invest between RM300 million and RM500 million over the next five years to expand its bed capacity in the JS-SEZ.
The company's focus is on developing Centralised Living Quarters certified by the Jabatan Tenaga Kerja Semenanjung Malaysia (and compliant with the Employees' Minimum Standards of Housing, Accommodations and Amenities Act 1990.
TMG, also listed on the SGX, plans to invest up to RM1.5 billion over the next decade to build Thomson Hospital Iskandariah on a 1.5-hectare site in Stulang, Iskandar Malaysia.
The hospital is set to become a healthcare anchor within the JS-SEZ, operating under a public-private partnership model.
The project is expected to generate around 1,500 jobs in clinical services, research, specialist care, and healthcare technology.
Meanwhile, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the JS-SEZ will be the catalyst for Malaysia's growth as it enhances bilateral trade and investment relation with Singapore and across the globe.
"Already we have seen the construction of data centre which has contributed significantly to construction sector.
"The sector has been growing at double digit for multiple quarters in a row especially data centre construction in Johor. The availability of land resources, energy, water and telecommunications to name a few would facilitate the growth node in the state," he told Business Times.
Afzanizam said key factors that need to be addressed are the bureaucracy among the relevant government agencies at state and federal level in order to yield positive experience among the business and investing community. He also said the prevailing tariff shocks suggests a dire needs for intra-Asean trade and investment linkages.
"JS-SEZ can be such catalysts. It can be cross-border template to integrate other SEZs in the Asean region and become the major hubs for various industries such as advanced manufacturing and electronics, logistics and warehousing, green energy, agri-food and halal industry as well as healthcare and education," he added.
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