an investment guide to the ecer
TRANSCRIPT
DUE EASTDUE EAST MALAYSIA
An Investment Guide to the ECER
A Fifth Anniversary Commemorative Edition
DUE EAST An Investm
ent Guide to the EC
ERMALAYSIA
www.ecerdc.com.my
4 Foreword by the Prime Minister and Chairman of ECERDC
6 The Competitive Edge
13 The East Coast Economic Region Development Council
17 ECER: A Region Set For Rapid Transformation
20 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)
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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 2012.
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 2020. 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 2020.
DATO’ SRI MOHD NAJIB BIN TUN HAJI ABDUL RAZAK
Foreword by the Prime Minister and Chairman of ECERDCAs 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 2020. 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.
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 2020.
KuantanSingapore
Indonesia
United Kingdom
EuropeRussia
China
Pakistan
UAEMyanmar
India
Vietnam
ThailandCambodia
Philippines
Taiwan
Japan
AustraliaNew Zealand
South Africa
South America
North America
To Penang
Bukit Kayu Hitam
Alor Star
Butterworth
George Town
Ipoh
KUALALUMPUR
KLIAKlang Port
Seremban
Johor BahruTanjungPelepas
Tanjung Gemuk
Kg. SediliBesar
Kuala Rompin
Muadzam Shah
Maran
KuantanPort City
Tanjung Api
Temerloh-MentakabSimpang
Pelangai
Raub
LanchangBentong
Karak
Tanjung Agas
Pekan / Peramu
Jerantut
Kertih
Dungun
Kuala Berang
MerangKualaKrai
Machang
RantauPanjang
To ThailandBachok
Kota Bharu
Kuantan
Marang
Tok Bali
THAILAND
Kuala Lipis
Jeli
Lojing
Gua Musang
Mersing
SINGAPORE
Segamat
Kuala Terengganu
Chukai
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The East Coast Economic RegionTHE COMPETITIVE EDGEThe 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.
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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.
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.
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.
Key Economic Drivers
• Tourism
• Oil, Gas & Petrochemicals • Manufacturing
• Agriculture • Human Capital Development
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VISION
KEYDRIVERS
ENABLERS
OIL
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Supporting Manufacturing Avtivities, Logistic, ICT, Financial Services and Related Services
Adequate Physical InfrastructureBasicFoundation(Hard & SoftInfrastructure)
Support System
THE MAIN PILLARS
Strong Basic Education and Training
Conducive Working and Living Environment
Stable Political & Social Environment
Supporting Institutions (Education, R&D, Government, Private and Social Institutions,Trade Associations, Communication and Coordination System)
Attractiveincentives have been designed
specifically for ECER, which includes a
Special Economic Zone (SEZ), to spur investments in what will become a cost-
competitive and vibrant business hub.
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
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.
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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,PahangandDistrictofMersinginJohor - Size : 66,736 sq km (51% of the land area of Peninsular Malaysia)
PEOPLE
• Population : 3.9million(2005),representing14%ofthenationalpopulation : Estimatedtogrowto4.9millionin2020• Workforce :1.36million(2005)and1.92million(2020)
ECONOMY
• GDPGrowth :5.7%(2005)and7.2%(2020)• GDPPerCapita :RM5,860(2005)andRM13,510(2020)• AverageMonthlyHouseholdIncome:RM2,267(2005)andRM5,227(2020)
Source: ECER Master Plan
Gross Domestic Product is
projected to grow by an
average annual rate of
7.2 per centin the
East Coast Economic
Region (ECER).
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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.
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The East Coast Economic Development Council (ECERDC) is a statutory body consisting of the highest level of the federal and state administration, entrustedtoimplementtheECERMasterPlan.
THE EAST COAST ECONOMIC REGION DEVELOPMENT COUNCIL
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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.
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.
The ECERDC also establishes policies, direction, strategies and initiatives in relation to sustainable development, including environmental protection, management and conservation in the ECER.
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The Council plays a leading
role in setting the direction, policies
and strategies in relation to the Region’s
development.
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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.
ECER: A REGION SET FOR RAPID TRANSFORMATION
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PAHANG
KELANTAN
Jeli
Kertih
Kuantan
Pekan
Raub
Bentong
MERSING Mersing
Endau-Rompin
Kuala Terengganu
DungunKualaBerang
TERENGGANUBesut
Nod 2:PembangunanMerentasi Sempadan
Nod 3:Segi TigaKTCC - Kenyir - Dungun
Nod 4:KDA Mersing - Rompin
Nod 6:KDA Bentong -Raub
Nod 7:KDA DARA -JENGKA
Nod 5:KDA Gua Musang -Kuala Lipis
Nod 1:Zon EkonomiKhas (ECER SEZ)
Jengka
TumpatKota Bharu
BachokTok Bali
Rantau
Bukit Bunga
Gua Musang
Kuala Lipis
Gambang
Pulau Tioman
Panjang
ECER Key Development Areas (KDA)
MERSING
SPECIAL ECONOMICZONE (SEZ)
1 10103
4
6
6
6
6
6
2
13
8 1410
145
14 12115
1423
6
51
1
2
3
4
5 12
11
10
9
8
6
7 14
13
57
7
1314 9
1
45
12
7
AquacultureGNI: RM1.030 milJobs: 4,516Priv. Invest: 94%
Dairy CattleGNI: RM667 milJobs: 1,026Priv. Invest: 86%
Goat & SheepGNI: RM816 milJobs: 3,727Priv. Invest: 83%
CassavaGNI: RM427 milJobs : 4,200Priv. Invest: 76%
Coastal TourismGNI: RM1,974 milJobs: 32,358Priv. Invest: 94%
EcotourismGNI: 349 milJobs: 2,056Priv. Invest: 91%
Island TourismGNI: RM156 milJobs: 989Priv. Invest: 95%
Automotive AssemblyGNI: RM1,340 milJobs: 28,338Priv. Invest: 94%
Downstream Palm OilGNI: RM2,279 milJobs: 8,259Priv. Invest: 88%
Halal HubGNI: RM1,100 milJobs: 12,881Priv. Invest: 89%
PolymerGNI: RM1,600 milJobs: 3,229Priv. Invest: 97%
Supply Base ServicesGNI: RM2,700 milJobs: 14,010Priv. Invest: 95%
Kuantan Port ExpansionGNI: RM3,796 milJobs: 8,638Priv. Invest: 75%
Road & RailTotal Inv.: RM4,107 milPriv. Invest: 3.4%Agriculture Tourism Manufacturing
Oil, Gas & Petrochemicals Enabler - Infrastructure
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 2020. 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.
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.
ECER Entry Point Projects (EPP)
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In pursuing the goal of making ECER into a developed Region a special economic zonecalledECERSEZwasestablished.The ECER Special Economic Zone (ECERSEZ))waslaunchedin2009byPrime Minister Y.A.B. Dato' Sri MohdNajib 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 massofPeninsularMalaysia.Measuring25kmby140km, fromKertih inTerengganu to thenorth to Pekan in Pahang to the south, ECER SEZ is strung together by an agglomeration of well-established industrial parks throughtheconceptofconcentrateddecentralisation.
These industrial parks are the catalysts to spur integrated development and promote sustainable economic growth in an increasinglycompetitivebusinessenvironment.ECERSEZalsohas a larger focus on local urban development and economic growth in the Greater Kuantan conurbation upon which its geographicalboundariesaredefined.
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 2020.
THE ECER SEZTHE CATALYST OF TRANSFORMATION
Kuala Rompin
Mentakab
Dungun
Kuala Terengganu
Bukit Bunga
Kota Bharu
Kuala Besut
Rantau Panjang
Pengkalan Kubor
PAHANG
TERENGGANU
KELANTAN
Kuala Lipis
Bentong
Gua Musang
Mersing, Johor
Temerloh
Kuantan
Tanjung AgasPekan
Gambang
Cukai
Kertih
The ECERSpecial Economic ZoneIn
vest
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The objective of the ECER SEZ is
to become the catalyst for focused
growth in the ECER guided by a vision
that is supported by a high level of
economic growth through accelerated
development in the six key economic
drivers which include high-value
manufacturing; agro-based industry; oil,
gas and petrochemical; tourism and real
estate with special focus on knowledge
and education and Information
Communication Technology (ICT); and
logistics.
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ECER SEZ is targeted to create 45% of new jobs and 80% ofeconomic output in the Region, even though it covers only 6% of the entire land mass. A primary function is to fast-track socio-economic development of the Region through robust investment inflows, job creation and higher incomes that will have a multiplier impact on ECER. ECERSEZ has an investment target of RM97billionby2020,whenitisexpectedtogenerate250,000newjobs,45% of the 560,000 new jobs for the Region. As a specialeconomic zone driven by private investments, ECER SEZ offers customisedincentivesdevelopedbyECERDC.
ToachieveECERSEZ'sgoals,sevenofitsstrengthswereidentifiedas building blocks: port; industrial clusters; transport, infrastructure andutilities;freezone;newtown;commercial;andtourism.Its11industrial 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 thegoalsandtargetsofECERSEZ.
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 andmanufacturingzoneservingtheAsiaPacificandbeyond.KPC,whichcoversanareaofabout13,000hectares,envisionsitselfasa modern and efficient city, complete with commercial and industrial activities, educational institutions and residential areas, alltoserveport-relatedindustriesandtrade.
The Federal Government has already embarked on upgrading and expansion of critical infrastructure and public utilities to accelerate thedevelopmentofKuantanPortCity.Severalprojectsthathavebeenidentifiedarenowinvariousstagesofimplementation.Theyinclude the KPC Port Link Road, the main arterial road in Kuantan Port City, and the upgrading of the existing Federal Road 3 along thecoast.
ECER SEZKey Project Initiatives
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The Federal Government is also spearheading the expansion of Kuantan Port with the expansionofanewdeepwaterterminal.AswithmostprojectsinECER,aPublic-PrivatePartnershipmodelhasbeenadopted.Theportconcessionaire,KuantanPortConsortium,will invest RM3 billion for the construction of berths and terminal, operational buildings, equipmentandmachineriesaswellasinfrastructure.Withcontinuedmodernizationoftheall-weathermulti-purposeKuantanPort,whichbeganoperations in1975toservetimber 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 200,000deadweighttonnes.
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 nearbyMalaysia-ChinaKuantanIndustrialParkorMCKIP.KuantanPortisstrategicallylocated facing the South China Sea, right in the middle of one of the busiest shipping lanesintheworld.
ECER SEZ is set to experience unprecedented growth and generate a ripple of developmentthroughouttheECERthroughitssignificantmultipliereffects.Itisnowoneof the largerSEZs inAsiawith390,000hectarescomprising25,000hectaresofSEZFocusNodes.
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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 populationof3billionpeople).
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–anareawithacombinedpopulationofmorethan500millionpeople.Taken together, the factors above provide ready access for the SEZ into a larger “domestic market”,thusgivingabiggerscaleofproductionandbiggerbasetosourceforrawmaterials.
REGIONAL POSITIONING
WithintheECERSEZ,therewillbefurtherinitiativestakentostrengthenlocaleconomiccorridorsin Oil, Gas & Petrochemical, Manufacturing, Agro-based Industries, Tourism and Education Clusters throughfocusedconcentrationofinvestmentsinselectednodesandclusters.
NATIONAL POSITIONING
Nationally, the ECER SEZ is strategically positioned as a major growth conurbation for the East Coaststates.Thisconurbation, identifiedasaNationalRegionalGrowthConurbation(Level2) inthe National Physical Plan, is expected to have a large population concentration of about 1 million by2020.
The ECER SEZ is also strategically located at the convergence of two main growth corridors in the peninsula i.e.theCentralCorridor linkingKLtoKuantanandEastCoastCorridorstretchingfromKotaBharuinthenorthtoJohorBahruinthesouth.Othersub-corridorsthatcouldhaveanimpactontheECERSEZwillincludetheKuantan–MelakaSub-Corridor.
International, National & RegionalPositioning 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 EastAsia.While the focus is to promote international/regional trade linkages andinvestment, the emphasis is also on protecting and conserving environmentally sensitiveareas.
INTERNATIONAL, REGIONAL AND NATIONAL POSITIONING OF ECER SEZ
NATI
ONAL
ECER
SEZ
NCER
IskandarMalaysia
KLMetropolitan
INDIA/MIDDLE EAST
BORNEO/INDONESIA
INDOCHINA CHINA/EAST ASIA
SINGAPORE/AUSTRALIA
• 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
KUANTAN
KERTIHCHUKAIKUANTAN PORT CITY
KUANTANGAMBANGPEKANTG. AGAS
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THE FOUNDATION OF THE ECER SEZ
The ECER SEZ contains four major ports and two airports which will support its manufacturing andindustrialactivities.Themaintransportationandlogisticsinitiativesinclude:
• TheECERSEZCentralLink,whichwillunlockthedevelopmentpotentialofinteriorland parcels in the SEZ and serve as the main traffic connector for the SEZ
•Thedevelopmentofanexpresswaysystem -EastCoastExpressway2(LPT2):Kuantan-KualaTerengganu - EastCoastExpressway4(LPT4):Kuantan-JohorBahru
• TheregionalraillinkconnectingtheindustrialisedwestcoastandtheECERSEZ
• TheproposedKuantanSentralMultimodalTransitHub
The ECER SEZ will incorporate an integrated development approach, which comprises commercial, residential, educational, industrial,serviceandknowledgecomponents.
It will have an orientation towards building up capacity for knowledgeinnovationthatcanbelinkedacrosseachcomponent.The knowledge innovation-baesd economy acting as an enabler, will fokus on collaboration, cooperation, research and development, knowledge-sharing and commercialisation of ideasbetweentheprivatesector,Governmentandacademia.
Knowledge &Education
Commercial
Tourism
Port FreeZone
Transport,Infra &Utilities
NewTown
IndustrialClusters
SPECIAL ECONOMIC ZONE MODEL
KERTIH• Kertih Integrated Petrochemical Complex• Kertih Polymer Park• Polymer Technology Centre
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
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
BANDAR AL MUKTAFI BILLAH SHAH• Furniture Industry Park
SG. LEMBING• Ecotourism & Heritage Mines• Safari Park
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
PAKAKERTIH
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CUKAI
KUANTAN
PEKAN
TELUK KALONG /KEMAMAN PORT
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Cattle Integration inOil Palm Plantations
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Agro Valley
Agropolitan Project
Major Urban NodesIndustry NodesTourism Nodes
TEMERLOH-MENTAKAB / KT RAIL
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ECER SEZ KEY INITIATIVES
Suspendissepotenti.Suspendisseatpede.Nullasedaugue.Phasellusnonarcu.Vestibulum ante ipsum primis in faucibus orci luctus et ultrices posuere cubilia Curae; Curabitur blandit leo id lacus condimentum sodales.Maecenasvitaemetus.
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.
Prospective investors are encouraged to take advantage of the investment opportunities brought about by the implementation of the ECER Master Plan and explore possible venture options, as well as synergies with existing and planned initiatives. While the plan plots out the form and direction of economic growth in the Region, investors will be able to create their own niche opportunities and capitalise on these, contributing to the Region’s robust growth in the future.
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KEY ECONOMIC DRIVERS
Five key economic drivers or clusters have been identified to steer the ECER’s socio-economic development until the year 2020.
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.
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Cherating
Tanjung Agas
ECER Tourism Project Sites
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.
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.
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 2020. A developed tourism sector is expected to provide more than 35,000 jobs by 2020.
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.
Tourism
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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.
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.
Kelantan • Pantai Seri Tujuh, Tumpat
Terengganu • Kuala Besut - Tembila • Kg.Penarik/Pulau Besar - Merang • TelukBidara,Dungun
Pahang • Kuantan •Cherating • PantaiAirLeleh,
Johor •Mersing
Promoted Locations for Integrated Resort Development
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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 2020.
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.
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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.
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.
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.
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.
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Cross-Border Tourism
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 •PengkalanKubor •RantauPanjang •BukitBunga
Cross-Border Tourism Centres
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Cultural Heritage Tourism
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.
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.
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.
Kelantan •KotaBharu
Terengganu •Kuala Terengganu
Pahang •Pekan
Major Cultural Heritage TourismCentres
Kelantan •KotaBharu •Tumpat
Terengganu •Kuala Terengganu •Setiu •Merang •Dungun
Pahang •Jerantut •PantaiSepat •KualaPahang •Pekan •Rompin
Homestay Programme Locations
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The ECER's major ecotourism attractions
• EcotourismcentresinLojing,Machang and Gua Musang• NenggiriandStongHillsStatePark
• EcotourismcentresandElephantSanctuary in Tasik Kenyir • TerengganuHillsandSetiuWetlandsState Park Terengganu • GlobalMarineTurtleObservatory Rantau Abang
• EcotourismcentresinTamanNegara• KualaGandahElephantSanctuaryand Tasik Chini State Park
• EcotourismcentreinEndauRompin
Kelantan
Terengganu
Pahang
Mersing
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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.
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.
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.
A number of ecotourism areas present great potential for investors to tap into the vast adventure and nature tourism market.
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Tourism Updates
•Morethan40Homestay/KampungStayProgrammesareoperating, among others in Kampung Pasir Belanda, Kelantan; Kampung Teluk Ketapang, Terengganu; Kampung Kuala Medang, Pahang; and Kampung Air PapanLautinMersing,Johor
•InitiationofprogrammestotrainHomestay/KampungStay operators
•CommissioningofstudiestotransformMersing’scoastalarea into an integrated tourism destination and gateway to the Mersing group of islands
•BeachrevitalisationalongtheECERcoastline
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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.
Hallmark Events in the ECER
•MonsoonCup•Sultan'sCupTerengganu Endurance Challenge•NenggiriWhiteWater Rafting Challenge•RoyalPahangBillfish International Challenge
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Oil, Gas & PetrochemicalsThe 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)
In2009,ECERDCstartedthedevelopmentofKertihPolymerParkasMalaysia’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 clusterinlinewiththeNationalTransformationProgramme.
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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 relocatingtothePark.
TheindustrialParkwasrebrandedin2012asKertihBiopolymerPark(KBP)toreflectitsdiversificationto includebiochemicalsandhighlightMalaysia’sbiotechnologypotential to theworld.Companiescan 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 biochemicalproducts.
Withrawmaterialsandsupportingservicesavailableatcloseproximity,investorswillbeabletooffertheir products at much more competitive prices by lowering the cost of doing business and gaining muchbywayoftechnologytransfer.OneoftheotheradvantagesofKBPisitsproximitytoKuantanPort,thegatewaytotheexportmarketsofAsiaPacific.
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 rangeofrawmaterials.Todateanumberof investorshavestartedtheirbusiness inKBPincludingglobalaplayerssuchasCheilJedangCorpofSouthKoreaandArkemaSAofFrance.
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-polymersproduced 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 polyolfromKBPinthemanufacturingofcarcomponentsandaccessories.
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-basedmanufacturerswithoperationsinthePark.
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 andwholesalingactivities,aswellasretailing.
Integrated oil and gas supply base
OilandgasactivityintheECERisexpectedtoincreaseoverthenext10yearsasadirectresultoftheEPPs. Increased activity provides an opportunity for supporting industries to be developed in theECERduetoitscloseproximitytobothupstreamanddownstreamfacilitiesinpeninsularMalaysia.
Kuala Kemaman has been identified as a centre for the industry, thanks to its proximity to port facilities andtheupstreamanddownstreamdevelopmentsintheOilandGasIndustrynearbyKertih.
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 itsproximity 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. Inaddition 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 aswellasboatandshiprepairstocomplementisprimaryoperations.
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Tanjung Agas
Pekan - Peramu
Kuantan Airport
Kuala TerengganuAirport
Kemaman Port
Kuantan Port City
Tanjung Agas
ECER Manufacturing Project Sites
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.
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.
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.
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
Manufacturing
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Manufacturing Initiatives in the ECER
Initiative Project Location
Food and Non Food-based
•Gambang Halal Park Gambang, Pahang
•Pasir Mas Halal Food Park Pasir Mas, Kelantan
•Integrated Fisheries ParkTok Bali & Bachok, KelantanKemaman, TerengganuTanjung Api & Kemunting, Pahang
Palm Oil-based • KuantanIntehratedbio-park Kuantan, Pahang
Automotive • Pekan Automotive Park Peramu-Pekan, Pahang
Heavy Industries •Heavy Industrial Park Kemaman, Terengganu
Port City •Kuantan Port City Pahang
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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 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 environment-friendly practices designed to reduce carbon dioxide emissions.
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.
HALAL PARKS
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.
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 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
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.
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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.
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Tanjung Agas
ECER Agriculture Project SitesAgricultureAgriculture 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 farmstolarge-scalecommercialagriculturalenterprisesthatwillhaveasignificantimpact on improving business viability while contributing to the sustainability of ECERDC’sagricultureprojectsinlinewiththeGovernment’sRuralTransformationProgramme.
The emergence of biotechnology applications in agriculture has influencedsignificantlythe industrialisationofagri-basedproducts intheRegion.Thisshiftwill propel ECER’s economyby generatingmore income for rural communitiesengaged in agriculture, creating more job opportunities, attracting private investmentandincreasingentrepreneurialopportunities.
Kelantan,Terengganu,PahangandMersing,Johorwiththeirvasttractsofland,aremajorcontributorstotheagriculturalandfoodsectoroftheeconomy.
Transformation initiatives for this sector are based on developing a fully integrated value chain model that is private sector-driven and market- centric. Projectswill 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.
Asignificantmilestone is the incorporationofbiotechnology-based initiatives inlinewiththeBioeconomyTransformationProgramme.Todate,10projectshavebeenidentified,withaprivateinvestmenttargetofRM2.89billionby2020.
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 2020asoutlinedintheNationalBiotechnologyPolicy.
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 exportingtoglobalnichemarketwithhighqualityvalueaddedproducts.
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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 manufacturersandretailerslocallyandabroad.Byimprovingthevaluechainandsupplychainmanagement, the produce from the farms within the ECER will be able to penetrate the global market.Thismovewilleliminatetheintermediariespresentintheexistingsupplychain,reducepostharvestlossesthroughbetterhandlingofproduceandensureahighlevelofqualitycontrol.
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 ensuresustainabilityandviabilityoftheseprojects.
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Crop-based Livestock-based Fish-based
•Fruits•Pineapple•Herbal&Biotechnology
•DairyCattle•Goat&Sheep•BreederAnimals•AnimalFeed Production
•MarineCaptureFisheries•Fish-basedProcessing•HatcheryandNursery
The ECER: Agriculture Sub-Clusters
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CROPS
CropinitiativesinECERwillleverageontheRegion’svastnaturalresources,availabilityoflargetractsoffertilelandanduniquebiodiversitytopositionECERasMalaysia’shubforfoodproductionandnon-foodbasedindustries.Toachievethis,thefocusisonincreasingproduction, strengthening product quality and stepping up marketing e orts to penetrate globalexportmarketsforECER’scropandfoodproducts.
Basedoneconomicprojectionuptoyear2020,thesector'scontributionisexpectedtoincrease as agriculture sector will undergo intensive investment to serve as one of the majorenginesofnationalgrowth.PromotedagriculturecropintheECERcanbedividedinto three initiatives.Theyare thedevelopmentofaherbalcluster; thedevelopmentofintegratedpineappleplantations;andthedevelopmentofacassavacluster.
Herbal Cluster
TheECERDC’s herbal cluster is recognised as an Entry Point Project (EPP) under theEconomic Transformation Programme (ETP) for agriculture. This project taps into thecountry’svastanduniquebiodiversitytoestablishMalaysiaasahubforhigh-valueherbalproducts.Itaimstostrengthentheproductionoflargescale,highqualityrawmaterials,enhance product quality and marketing e orts to penetrate global export markets for nutraceuticalproductsandbotanicaldrugs.
To spearhead the herbal industry in the Region, the Herbal Development Council (HDC) was establishedtooverseethedevelopmentoftheherbalindustryinMalaysia.ItidentifiedfiveR&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, cropproduction & agronomy, toxicology & pre-clinical, product development and processing technology.
To support upstream initiatives, two plots of agricultural land are being developed for theherbalcluster–406hectaresinPasirRajainDungun,Terengganuand327hectaresin Chegar Perah in Lipis, Pahang. These herbal clusters will focus on upstream andmidstreamactivities toproducesufficienthighquality rawmaterials forpharmaceuticalandnutraceuticalindustriesbasedinECER’shalalparks.
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ECERDChasidentifiedandpromoted10highvalueherbalcropswithsignificantcommercialvalue.Farmingandprocessingoftheseherbswillbeacceleratedtomeetincreasingdomesticand 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(morindacitrifolia),dukunganak(phyllanthusniruri),misaikucing(orthosiphonaristatus),halia(zingiberofficinal),lemonmyrtle(backhousiacitriodora)andgaharu/agarwood(aquillariamalaccensis).
Integrated Cassava Cluster
The emergent biotechnology initiatives in agriculture sector has seen cassava (tapioca) being promotedtomeettheincreasingdemandforstarchfromfoodandnon-foodindustries.Threeintegratedcassavaplantationshasbeen indentified,oneeach inTerengganu,KelantanandonestraddlingacrossMersing in Johor andRompin inPahang.When fullyoperational, thethree integratedcassavaclustersoccupying7,783hectareswillproducemorethan100,000tonnesofcassavastarchperyearfordomesticconsumption.Investorshavetheopportunitytobe 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 modifiedstarchforindustrialused.
Integrated Pineapple Plantation
Rompin Integrated Pineapple Plantation is an ECERDC initiative to promote and commercialise the planting of fruit cropswith great demand in exportmarkets. The plantation has a fullyintegrated value chain that includes pineapple nurseries, collection centres, and a processing and packaging centre that will produce fresh and processed pineapple for local consumption andexportmarkets.Wasteandby-productsareusedasanimalfodderinECERDC’slivestockinitiativesandotherdownstreamindustries.
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 farmingthroughhightechnologyinitiativesthroughoutitsvaluechain.
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 systemforthedairycattleandsheepindustry.Thiswouldresultinincreasedproductionoflocallyimproved animal breeds for distribution to contract farmers and reduce dependency on imported breeds.Farmerswillconsequentlybenefitfromhigherproductivityfromtheirlivestockandlowerproductioncoststhatwilltranslateintohigherincomeforthem.
Goat and Sheep Cluster
ECER’sDorper sheep initiativeshave two thrusts:one, tomeet risingdemand formutton inMalaysia, and two, to be promoted as a primary economic activity and source of income for agropolitanparticipants.TheDorpersheep initiativeshave resulted inastrategic relationshipbetween nucleus farms commercially operated by the anchor company and Dorper projects in the Pekan Agropolitan andBesut-Setiu Agropolitan. Dorper sheep farming is the primaryeconomicactivityinbothagropolitans.
Currently,Malaysia’sgoatandsheepproductionstandsat2,744tonnesperannum,about10%ofnationaldemand.ECERDC’sDorpersheep initiative isdesignedtoproduceup to30%ofnationaldemand.Thetargetisfor19,500tonnesby2020.
Bythen,itisenvisionedthattherewillbesignificantlylargerfarmswiththecommercialisationofgoat and sheep farming as well as more ECER farmers participating in downstream activities that wouldcontributetosubstantialadditionalincome.
To initiate the goat and sheep industry in the Region, ECERDC has developed the Kuala Berang SheepBreeding&InnovationCentreinTerengganu.Thecentrewillproducehigh-valueDorperbreedthatiswell-suitedforlocalconditions,andreducedependencyonimportedbreeds.
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Dairy Cluster
DairycattlefarmingprojectswillbedevelopedacrossthefourstatesinECER.InPahang,itisbased in Muadzam Shah; in Terengganu it is based in Kuala Berang; in Kelantan it is based in
TanahMerah;andinthedistrictofMersinginJohor,itisbasedinJemaluang.Theseprojectstargettoproduce50millionlitresofmilkannuallyby2020.Demandfordairy products in Malaysia, particularly value-added products, is increasing and as a result, they are able to fetchhigherex-farmfreshmilkprices.Thiswillprovidemoreincomeforfarmersengagingindairyfarming.
To facilitate the growth of this industry, ECERDC has developed the Muadzam Shah Cattle Research & InnovationCentre (MSCRIC) inPahang.The facilitiesconsist of a training & technology transfer complex, central performance test complex, animal reproductive test complex, 210-hectare commercial scale fodderandpasturearea,milkingparlourandmilkingcomplex.They will facilitate high-impact continuous research and bridge gaps in breeding technology and farm managementintheMalaysiandairycattleindustry.
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FISHERIES AND AQUACULTURE
Thedevelopmentofthefisheries,marinecaptureandaquacultureindustry in ECER will transform the fish-based industry throughcommercialisation of critical segments along the integrated value chain.Theycallfortheinvolvementofacompetentanchorcompanyand small-medium entrepreneurs specialising in hatcheries and broodstock,grow-outfarmsanddownstreamprocessing.
Toensurethemaximumutilisationoftheavailablefishresource,itisvital to implement more value-added activities such as processing and identifying alternative sources of production such as aquaculture inmarinefishandfreshwaterfish.
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 MarketingCentre,currentlybeingbuilt inMerchong,Pahang.Theanchor company for this project will be required to invest in a high technologyrecirculationaquaculturesystemtoproduce10millionhigh-qualitytigergrouperandseabassfingerlingsinadditiontotheproductionof600millionpost-larvaemarineshrimps forgrowoutaquaculturefarmsinECERby2020.
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 othermarineandbrackishfishspeciessuchasgrouper,seabassandshrimps.
Kuantan Fish Processing Park
TheKuantanFishProcessingParklocatedatthemajorfishlandingjetty in Kuantan, is designed and built to comply with international foodsafetystandardssuchasHACCP,GMPandHALAL.Thisparkwill prioritise downstream businesses to generate more economic value-addedproductsinfish-basedindustries.Ithasasortinganddistributioncentretofacilitatefreshfishhandlingandgradingfrommarine fish capture and production from aquaculture grow-outponds.Ittargetstoproduce13,650tonnesoffish-basedproductsannually.
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DownstreamowneractivitiesinKuantanFishProcessingParkoffer318boatownersregisteredattheKuantanfishlandingjettytheoptionofsellingtheirfish-capturetothepark,givinglocalfishermenthebenefitofhigherincomegeneratedbydirectsales.Operationally,KuantanFishProcessingParkrequires60tonnesofrawfishtobeprocesseddailyandithas300tonnesofcoldroomstoragecapacityavailabletostockthefishproduce.
Tok Bali Integrated Fisheries Park
The Tok Bali Integrated Fisheries Park in Pasir Puteh, Kelantan is a strategic initiative targeted to generate economicactivitiesforthefish-basedindustry,integratingitwithmarineecotourismandasasupplybaseportforheavyindustrialactivitiesinthearea.
These initiatives are in line with the Economic Transformation Programme to boost the export potential of processedfoodsbyintegratedprocessingparks,designatedasEntryPointProjects(EPP).
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- UiTM (Dungun)
- UNITEN (Muadzam Shah)
- UMK (Bachok), UDM (Besut),- Knowledge Park (Taman Ilmu)
- USM (Kota Bharu), KU Twintech (Kota Bharu), UiTM (Machang)
- 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)
- UMT (Kuala Terengganu)
- UDM (Kota & Kusza),
- Centre for Industry-Academia Collaboration (CIAC)- Institute of Biodiversity Oceanography and Centre for Social Development
- UMK (Jeli)
- Business Entrepreneurship and Management Training Programme
- Centre for Industry-Academia Collaboration (CIAC)- Skills Training and Accreditation & Certification Centre for Wood-based Products (UiTM Jengka)
- UiTM (Jengka)
- Centre for Industry-Academia Collaboration (CIAC)- Hospitality & Tourism Management and Tourist Guide Training Centre (UiTM Dungun)
- UMP (Pekan)
- UIAM ( Kuantan),
- Centre for Industry-Academia Collaboration (CIAC)- Post-Graduate Studies on Facilities Management and Biodegradable Products and Biofuel Research Centre (UMP)
Dungun
Kertih
Bachok
Jeli Jertih-Kg. Raja-Besut
Ulu Tembeling
Kuala Lipis Chukai
Pekan/Peramu
Tanjung Agas
Jengka
MuadzamShah
Kuala Rompin
Mersing
KualaTerengganu
Kuantan
Johor Bahru
SINGAPORE
THAILAND
KUALALUMPUR
Ipoh
George Town
KotaBharu
N
50 50 1000
K I L O M E T R E
LEGEND
Towns
Primary Routes(Existing & Proposed)
Key Initiatives Sites
Expressways(Existing & Proposed)
Railway(Existing & Proposed)
Airport
Key Initiatives-New University/Branch Campus
Existing University/Branch Campus
Centres of Excellence
> 3 Universities, Colleges + Skills Training Centres
2-3 Universities + Skills Training Centres
Port
1 University + Polytechnic + Skills Training Centres
Human Capital Development
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 2020. 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.
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.
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.
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Institution Courses offered
Universiti Malaysia Kelantan (UMK)BachokCampus •Entrepreneurship&businessJeliCampus •Agroindustry&naturalresources •Creativetechnology&heritage •SMEDevelopment •Thirdlanguagestudies
Universiti Sultan Zainal AbidinBesutCampus •IslamicstudiesKualaTerengganuCampus •Accounting&business •Agriculture&biotechnology •Foodtechnology&processing •Animalscience •Informationmultimediatechnology •Arabic&education
Universiti Malaysia Terengganu (UMT)KualaTerengganuCampus •Science&technology •Economics&management •Agro-technology&foodscience •Marinescience •Oceanography, tropical aquaculture & marine biotechnology
Universiti Malaysia Pahang (UMP) •EngineeringPekanCampus,Gambang,KuantanCampus •Technology-basedsciences
Centre Institution
Centre for Industry-Academia Collaboration (CIAC) UMK, UMT, UDM, UMP, UiTM Machang, UiTMDungun&UiTMJengka
Regional Centre for Halal Products UDM
Centre for Innovativeness & Product Creativity UiTM Machang & UMK
Centre for Heritage & Culture UMK
Hospitality & Tourism Management and Tourist Guide UiTM DungunTraining Centre
Institute of Biodiversity & Oceanography UMT
Centre for Bio-Technology and Herbal Research UDM
SkillsTrainingandAccreditation&CertificationCentre UiTMJengkaforWood-basedProducts
Entrepreneurship and Management Training Programme UMK
Post-Graduate Studies on Facilities Management UMT
Biodegradable Products and Biofuel Research Centre UMP
Centre for Social Development UMT
New Centres of Excellence initiated under the ECER
New University Campuses in the ECER
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.
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 2020. 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.
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:• Itbringstrainingfacilitiestoselectedparticipantsinruralcommunities.• 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.• Itusessurveystodeterminetheneedsandinterestsofthecommunityandparticipantspriorto drawing up training modules.• Itadoptsflexibleteachingmethodsandtime-tables,withtrainingsessionsoftenconductedon weekends for the convenience of participants.• Itmodifiesthesyllabustosuitthelevelofcomprehensionofparticipants.
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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.
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.
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.
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.
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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 www.mida.gov.my that will enable investors to make preliminary assessment on the costs involved in doing business in Malaysia.
Useful Information for Investors
•RentalRatesforPrimeOfficeSpace
•CostsofIndustrialLand&FactoryBuilding
•CompanyTax
•PersonalIncomeTax
• InternetServiceProviders
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.
• InternationalSchoolsInMalaysia
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).
•AverageHaulageRates
(Source: CH Williams, Talha & Wong)
(Source: *State Economic Development Corporations (SEDC); **MIDF Property Bhd & SEDCs)
(Source: Inland Revenue Board)
(Source: Inland Revenue Board)
(Source: MIDA)
(Source: Inland Revenue Board)
DOING BUSINESS IN MALAYSIA
Location RM US$
Kuantan, Pahang 13.00-27.00 1.06-8.44
Kuala Terengganu, Terengganu 21.50-27.00 6.72-8.44
Kota Bharu, Kelantan 10.70-27.00 3.34-8.44
Cost of Industrial land* Cost of Ready-built factory**
Location Selling Price per ft² Quit rent per annum
Annual assessment rate (% of property value)
Selling price per ft² of floor area
Rental per ft² per month
Johor RM8.00 - 38.00
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.
0.33 - 1.0RM140 - 200
US$44.80 - 64RM1.20 - 2.20US$0.38 - 0.70
PahangRM3.00 - 11.00US$0.64 - 3.44
≤ 2ha RM 15 per 100m²US$4.69 per 100m²> 2 ha RM10 100m²US$3.13 per 100m²
7 - 9RM50 - 127
US$15.63 - 40RM 0.40 – 0.60US$0.13 – 0.19
TerengganuRM2.00 – 60.00US$0.64 – 19.20
RM8 – 20 per 10m²US$ 2.50 – 6.25 per 100m² 5 – 10
RM60 – 99US$19 - 31
RM0.40 – 0.65US$0.13 – 0.20
KelantanRM9.00US$2.88
RM1,000 per ha²US$313 per ha. 5 - 12 -
RM0.35 – 0.45US$0.11 – 0.14
Resident and non-resident companies25%
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•onthefirstRm500,000(US$156,250)chargeableincome•onsubsequentchargeableincome
20%25%
Resident individuals with chargeable income of RM16,667 (US$5,208) and above per annum (after deduction of personal reliefs)
1% - 26%
Non – resident individuals (not entitled to any personal reliefs) 26%
Area
Haulage Rates Road Tolls FAF Total
20’ & 40’(RM)
(RM)12.47% Period from
1st May 200620’ & 40’
RM US$
Kelantan (Kota Bharu) 3,302.00 197.80 411.76 3,911.56 1,222.36
Pahang (Kuantan) 1,940.00 197.80 241.92 2,379.72 743.66
Terengganu (Kerteh) 2,318.00 197.80 289.05 2,804.85 876.52
The ECER is envisioned as a pro-business and investment friendly environment, with attractive incentives which will allow investors the opportunity to grow and reap returns from their projectsandinitiatives.Theincentivesintroducedfortheregionplaces it ingoodstandingtobecomeoneofMalaysia'smostattractiveinvestmentdestinations.
In addition to the current package of incentives, the Government has approved new fiscal incentives for specific activity andidentifiedlocationsundertheECERMasterPlan.Coupledwiththe new and improved transportation networks, the region is set to experienceaboostinitsdomesticandforeigndirectinvestment.
To be eligible for the special ECER package of incentives, projects havetobedulyapprovedbytheECERDevelopmentCouncil.
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THE ECERINCENTIVES PACKAGE
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The ECER is envisioned as a pro-business and investment friendly environment, with attractive incentives which will allow investors the opportunity to grow and reap returns from their projects and initiatives. The incentives introduced for the region places it in good standing to become one of Malaysia's most attractive investment destinations.
In addition to the current package of incentives, the Government has approved new fiscal incentives for specific activity under the ECER Master Plan. Coupled with the new and improved transportation networks, the region is set to experience a boost in its domestic and foreign direct investment.
To be eligible for the special ECER package of incentives, projects have to be duly approved by the ECER Development Council.
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OIL, GAS AND PETROCHEMICALS
Promoted Activities Selected oil, gas and petrochemical products or activities
Type of Incentives • Customisedincentivesbasedonmeritofeachcase,or
• Incometaxexemptionof100%for10yearscommencingfromtheyear company derives statutory income, or
• Incometaxexemptionequivalentto100%ofqualifyingcapital expenditure(Investmenttaxallowance)for5years
• Stampdutyexemptiononlandorbuildingacquiredfordevelopment;
ApplicationtobesubmittedtoECERDConorbefore31December2020.
• Importdutyandsalestaxexemptiononmachinery,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 • Selectedmanufacturedandagro-basedproducts• Manufacturingrelatedservices
Type of Incentives • Customisedincentivesbasedonmeritofeachcase,or
• Incometaxexemptionof100%for10yearscommencingfromtheyear company derives statutory income, or
• Incometaxexemptionequivalentto100%ofqualifyingcapital expenditure(Investmenttaxallowance)for5years
• Stampdutyexemptiononlandorbuildingacquiredfordevelopment;
ApplicationtobesubmittedtoECERDConorbefore31December2020.
• Importdutyandsalestaxexemptiononmachinery,equipment,and consumables that are not produced locally and used directly in the activity.
Application to be submitted to MIDA
ECER IncentivesECER IncentivesTOURISM
Promoted Activities • Hotelsandresortoperation• Integratedresorts,• Themeparks,• Amusementandfamilyentertainmentcentres,Culturalcentres,• Conferencecentres,• Exhibitioncentres,• Regionaloperationofhotelandleisureservices• Makingofbatik,songketorroyaltenun• Makingofbrasswareorsilverware• Makingoftraditionalkites• Woodcarving• Selectedartandcraftprojectsincludingprint-makingorsculpting
Type of Incentives
i. CultureandHeritageii. Islandtourismiii. Mainlandcoastaltourismiv. Crossbordertourismv. Eco-tourismvi. Healthtourismvii. HallmarkEvents
• Customisedincentivesbasedonmeritofeachcase,or
• Incometaxexemptionof100%for10yearscommencingfromtheyear company derives statutory income, or
• Incometaxexemptionequivalentto100%ofqualifyingcapital expenditure(Investmenttaxallowance)for5years
• Stampdutyexemptiononlandorbuildingacquiredfordevelopment
• Withholdingtaxexemptiononroyaltyandtechnicalfeesupto31 December 2020
ApplicationtobesubmittedtoECERDConorbefore31December2020
• Importdutyandsalestaxexemptiononmachinery,equipment,and consumables that are not produced locally and used directly in the activity.
Application to be submitted to MIDA
• SingledeductionuptoamaximumofRM1millionforayearof assessment for sponsors of such event approved by ECERDC
Claims to be submitted to Inland Revenue Board
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AGRICULTURE AND AGRICULTURE RELATED SERVICES
Promoted Activities Agriculture
• Cultivationofkenaf,vegetable,fruit,herbs,spicesorcocoa, • BiomassPlantationincludingcassava,acaciamangium,leucana leucocephala • PlantingofHeveabrasiliensis • Floricultureincludingornamentalflowers • Aquaculture • InlandandDeepseafishing • Rearingofcattle,buffalo,goat,sheep,ostrich,turkeyandquail
Agriculture – related services
• Collecting,processingandpackagingofagriculturalproduce • Collectionandmarketingofagriculturalproduce
Type of Incentives
i. Acompanyinvestinginarelated company that undertakes promoted agricultural/agro-basedprocessing projectandownsatleast70% shareholdinginthatrelatedcompany.
ii. Companyundertakingthepromoted projectoractivity.
Deduction to the amount of investment made in the promoted project or activity.
• Customisedincentivesbasedonmeritofeachcase,or
• Incometaxexemptionof100%for10yearscommencingfromtheyear company derives statutory income, or
• Incometaxexemptionequivalentto100%ofqualifyingcapital expenditure(Investmenttaxallowance)for5years
• Stampdutyexemptiononlandorbuildingacquiredfordevelopment
ApplicationtobesubmittedtoECERDConorbefore31December2020.
• Importdutyandsalestaxexemptiononmachinery,equipment,and consumables that are not produced locally and used directly in the activity.
Application to be submitted to MIDA
ECER IncentivesECER IncentivesKNOWLEDGE, EDUCATION AND ICT DEVELOPMENT
Promoted Activities Information, communication and technology development and servicesEstablishment of universities and colleges, skills training institute, training and servicecentreandresearchanddevelopmentinstitutions.
Type of Incentives • Customisedincentivesbasedonmeritofeachcase,or
• Incometaxexemptionof100%for10yearscommencingfromtheyear company derives statutory income, or
• Incometaxexemptionequivalentto100%ofqualifyingcapital expenditure(Investmenttaxallowance)for5years
• Stampdutyexemptiononlandorbuildingacquiredfordevelopment
• Withholdingtaxexemptiononroyaltyandtechnicalfeesupto31 December 2020
ApplicationtobesubmittedtoECERDConorbefore31December2020.
• Importdutyandsalestaxexemptiononmachinery,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 DevelopmentofIndustrialParkorFreeZone.b) Development Manager Appointed by Developer to provide management, supervisory or marketing servicesofIndustrialParkorFreeZone.c) Park Manager Provide park management services including maintenance, marketing and rental of common facilities and utilities services in Industrial Park or Free Zone
Type of Incentives • Incometaxexemptionof100%for10yearscommencingfromtheyear company derives statutory income, or
• Stampdutyexemptiononlandorbuildingacquiredfordevelopment
ApplicationtobesubmittedtoECERDConorbefore31December2020.
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TERAS PROGRAMMES
TERAJU@ECER 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 opportunitiesbasedonmerit.Theprogramistodevelophigh-potentialBumiputeracompaniesinthenextfivetotenyears.
Criteria •Bumiputeraequitypreferablyat60%-100%
•CEO/ManagingDirectorisBumiputera
•MajorityofManagementisBumiputera
•Bumiputeracompanieswithgoodfinancialperformanceandstatus
•NotsubsidiaryofGLC/MNC(associatecompanyisallowed)
•PreferablyintheNKEAsector
•GoodCreditBureauRatingof(<=20%default)
Submission TERAJU@ECERSecretariat
Approval Authority
•RecommendedbyTERAS@ECERCommittee (JointCommitteebetweenTERAJU&ECERDC)
•EndorsedbyTERAJUDeliveryCommittee
FACILITATION FUND PROGRAMMES
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 FundAllocation :RM100million
Eligibility : 51% Bumiputera : 35% Bumiputera &CEO/MDmust be Bumiputera (Listed Companies)
Investment Size : RM5 million – RM50million
Funding Limit : 15% of the total project cost or up toRM7.5million (whichever is lower)
Submission :TERAJU@ECER Secretariat
Approval Authority : Recommended byTERAJU@ECER Facilitation Fund Committee & endorsed by TERAJUDelivery Committee
Projects that are NOT ELIGIBLE:
•Projectsinfinancial/ banking sector;
•Projectsintheincubation or R&D stage;
•Projectswhichinvolve mergers & acquisition;
•Projectsthathavereceived Government allocation and /orfunding;
•Governmentprocurement projects;
• Investmentinforeign countries;
•Projectsthatarehighly dependent on government support; and
•Projectswhereby Government needs to bearasignificantportion of the risks
UKAS (Public-Private Partnership Unit, PrimeMinister'sDepartment)
FundAllocation :RM20billion
Eligibility : All (FDI or DDI)
InvestmentSize :>RM100million
FundingLimit :10%ofthetotal project cost or up toRM200million (whichever is lower)
Submission : UKAS, Prime Minister’sDepartment
Approval Authority : UKAS
Other Incentives Other Incentives
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The ECERDC’s role as a one-stop centre is attracting more investors to the Region.
The ECERDC plays a leading role in promoting and stimulating economic and social development aswellasprivatesectorinvestmentintheRegion.
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 varioussolutionstohelpmaketheprocessofinvestmenteasyforinvestors.
TheECERissettobecomeacost-competitiveandvibrantinvestmentdestinationforinvestors.
Investors may look forward to an attractive package of fiscal and non-fiscal incentives exclusive totheRegion.Customisedincentivesaimedatmeetingtheinvestors'needsandrequirementsarealso given to investors on a case-to-case basis. Formore information on the ECER SpecialIncentives,investorsaremostwelcometocontacttheECERDC.
ECERDC:THE ONE-STOP CENTRE FOR INVESTORS
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If you are an investor planning to establish or expand your business opportunities in the East Coast Economic Region(ECER)wewillprovideyouwithprofessionalassistance.Wewillbethefirstpoint-of-contactforallyourinvestmentinquiries.
Companies planning to start or expand operations in the ECER can obtain information and assistance from the EastCoastEconomicRegionDevelopmentCouncil.WewillhelpyouharnesstheECER’scompetitiveedgeandcapabilitiestoachieveyourbusinessobjectives.
Contact Us
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East Coast Economic Region Development Council (ECERDC)Tel :+60320350000Fax :+60320350020E-mail : [email protected] : www.ecerdc.com.my
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While every reasonable care has been taken in preparing this document, ECERDC cannot be held responsible for any inaccuracies. All information and specifications are current at the time of preparation
and are subject to change as may be required. Renderings and illustrations are artist’s impressions only and cannot be regarded as representations of fact.
DUE EAST An Investm
ent Guide to the EC
ER
MALAYSIA
www.ecerdc.com.my
DUE EASTDUE EAST MALAYSIA
An Investment Guide to the ECER
A Fifth Anniversary Commemorative Edition
DUE EAST An Investm
ent Guide to the EC
ER
MALAYSIA
www.ecerdc.com.my