An iconic project under China proposed "Belt and Road" initiatives in Malaysia was Malaysia-China Kuantan Industrial Park (MCKIP). To forge a greater bilateral economic and trade cooperation, both governments take initiative and promotion in setting up the first national-level industrial park at Pahang, Malaysia in 2013. The 12 square kilometers industrial park was built within the core area of the Malaysia's East Coast Economic Region (ECEG). It situated 260 kilometers from Kuala Lumpur, located next to the Kuantan Port and Kuantan Airport.
MCKIP was penciled to have functions of manufacturing and processing, technology research and development, trade and logistic, and living facilities oriented industry park. With a view to serve ECEG, coastal regions of China, ASEAN and spanning Asian Pacific area, it aims to built a flagship demonstration project for economic cooperation between China and ASEAN.
The main developer of the industrial park is MCKIP Co. Ltd with Malaysia holding 51% of share and China 49%. Joint ventured by the China's stakeholders of Guangxi Beibu Gulf International Port Group Co. Ltd and Qinzhou Development and Investment Co. Ltd; while IJM Group, Sime Darby Group and Pahang State Development Corporation (PKNP) were from Malaysia, jointly owned and funded the project.
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It has been five years since the construction started, what is the development progress of MCKIP? The status in attracting investments and companies settling in? Has it gained the support of the local government and community? Business Times visited the industrial park and interviewed the project representatives to response to these questions in depths.
Industrial Park Begins to Take Shape with the Reappearance of "China Speed"
"The total park's land is split into three area and construct according to stages. The first and second phase will focus on heavy industry, and the third phase will focus to engage with light industry and its supporting services. Currently, more than 50% of the first phase construction has been accomplished, the second phase will start before year's end. Third construction stage is under planning," LianSheng Ji, the MCKIP operations director told Business Times.
LianSheng Ji said that the park construction progress is considered fast in Malaysia. "Although the project was announced in early 2013, however, the application and approval process with the former government has taken quite some time. The first company settled in was The Alliance Steel Co. Ltd, started its large-scale steel plant construction from 2016 year end. From a marshy land, they took only 18 months to build the Malaysia first full-processed with almost zero emissions steel plant,"he said.
The first company settled in MCKIP was The Alliance Steel Co. Ltd
According to JiuLin Hu, the deputy project commander of Alliance Steel, the plant is still under trial production stage. It is expected that full production stage will begin by end of this year with an annual production capacity of 3.5 million tons; producing unique high quality steels such as H-beams and mild steel to supply the Malaysia and others ASEAN region markets.
Apart from Alliance Steel, Ji indicate that three firms are in preparation stage to start-up plants at MCKIP. Another seven companies from mainland China, Hongkong and Singapore have signed the investment-related agreements with the park. Besides that, seven companies have shown their interest in investing. The total investment value from the above said companies is expected to exceed MYR40 billion (about USD 10 billion).
Companies from different countries are optimistic about MCKIP mainly due to the special allowances policies and incentives scheme offered by the Malaysian government. According to Ji, all the operating companies in the park who engaged in high value production, transmitting high technology or involving in research and development, are eligible for 100% corporate income tax exemption up to 15 years; import duty exemption on raw materials, parts and mechanical equipment; land or factory transferred stamp duty will be exempted as well. Investors could also enjoy the incentives offered by ECEG.
In addition, Jiulin Hu responded that the main reason for Alliance Steel to invest in MCKIP is because of its strategic location. A large-scale industry development can be ensured only if logistic matter being solved.
The Port - Industrial Chain - Park Model Supports the Growth of Company
Ying Gong, MCKIP public relations executive said, "MCKIP and Kuantan Port are dedicated to develop the P-I-P (Port - Industrial chain - Park) model, expecting the companies settled in the park will drive up the throughput capacity and increase the revenue of the port. Meanwhile, the dominant position of the port providing conveniences and logistic advantages could be used to attract firms to invest in the park; they are actually complementing each other to bring mutual advantages."
The third phase of industrial park will mainly focus on logistics, light industry and its supporting services. Thus, the entire park and Kuantan Port can form a complete business ecosystem. In the park's long-term plan, shopping center and residential area were included at third phase construction, bringing convenience life to the employees, and at the same time, hoping to become a commercial sub-center in Kuantan.
MCKIP and Kuantan Port are dedicated to develop the P-I-P (Port - Industrial chain - Park) model in bringing mutual benefits
While recalling the development of Alliance Steel over the past few years, Jiulin Hu expressed that, "the new (Kuantan deep water port) terminal is very capable and can meet the needs of the company." He added, "it is a wise choice to invest in MCKIP, the future is promising."
Review Problems, Keeps Develop and Growing under Reflection
Although MCKIP achievement over the past years was apparent, but the relevant representatives from both the park and Alliance Steel admitted that their communication with the local community and media ought to be enhanced, in order to avoid unnecessary misunderstandings.
Malaysian Prime Minister Tun Mahathir was reported (August 2018）as saying, "an industrial park is not a foreign country." The lack of communication transparency has attracted criticism that MCKIP built a high walls (Great Wall of China in Kuantan) and dubbed as a secret enclave, as they do not allow local officials to enter. Subsequently, resulting the entire project pushed to the cusp of public opinion among the nation.
The controversial issue of the perimeter wall is actually fencing up the area of Alliance Steel factory and not the industrial park. Ying Gong, MCKIP public relations executive explained that the purpose to build the perimeter wall was, "mainly to protect the plant's property security and to prevent accidental injuries of non-employees that mistakenly entering the production area."
Referring to the misconception of local community towards MCKIP, the former United Nation Under-Secretary General, Dr. Noeleen Heyzer told Business Times's writer that, "once isolation occurs, someone will start making up the story and spread it out. We know fake news, we know the use of social media, therefore, the interaction between people is extremely important. It (interaction) can build trust and understanding, and able to comprehend other person's thinking mode." In addition, she emphasizes that cultural exchange is the core of building trust, only trust could achieve a sustainable partnership.
(Translated by, Wendy Sun & Dorcas Lim)
(Original article was written in Mandarin, click here to read)
