KOTA KINABALU – Sabah needs more “mega” foreign investments to boost underperforming exports by local manufacturers, said state Industrial Development and Entrepreneurship Minister Phoong Jin Zhe.
The DAP politician, who has been in office for 100 days, said having foreign investors who set up businesses and manufacturing centres in Sabah and subsequently export their goods from the state appeared to be the best way for Sabah to increase its export volume and, in turn, make its ports attractive for shipping.
“We need such enablers for export activities in Sabah. When port and trade activities go up, the ports will become busier. It is important for us to export. The mega investors are not enough at this point of time,” he told The Vibes.
Phoong cited China-based SBH Kibing Solar New Materials (M) Sdn Bhd, which is investing RM2 billion to set up silica mining, jetty, and plant facilities in Sabah, and South Korea’s SK Nexilis, which is investing RM2.3 billion to start a copper foil industry in the state.
These firms are expected to export their products out of Sabah once they begin operations by the year’s end. SK Nexilis would also be importing copper from other countries as part of its operations in the state.
However, Phoong said the productions of both companies are still not enough to make Sabah’s export volume attractive enough for shipping companies.
Shipping liners dislike calling at Sepanggar Port, Phoong said, as it was not profitable for them to do so due to the lack of load.
The Luyang assemblyman admitted that local manufacturers face a slew of challenges to grow local exports. One problem has been the cabotage policy implemented by the federal government since 1980.
Phoong said most local manufacturers focus mainly on the domestic market.
According to him, only 2% of local small-and-medium industries are exporting to the peninsula and abroad, while the rest focus on the local market.
“Ten years ago the manufacturing sector’s contribution to Sabah’s gross domestic product was 8.6%, but over the last two years it was only 7.5%. So the manufacturing sector is indeed shrinking.”
He said Sabah’s lagging performance in manufacturing resulted in the state’s heavy reliance on imports, which is a factor for the higher cost of living here. – The Vibes, April 13, 2024
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