Economic prospects bright
KOTA KINABALU: The growth prospect is bright for the palm-based oleochemical and biochemical industry in Sabah, said Minister of Special Tasks Datuk Seri Panglima Teo Chee Kang.
Despite challenging market conditions, he said the export value of palm-based oleochemicals had experienced a 12-fold increase in four years from RM43.3 million in 2012 to RM554.2 million in 2016.
“This industry has big potential because Sabah is the largest palm oil producer in Malaysia. We have the raw material.”
Hence, Teo said the state government would continue to encourage further downstream activities of palm oil into higher-value oleochemical and biochemical products.
“We should be actively attracting more investors to build oleochemical or biochemical plants here.
“Our export volume of crude palm oil (CPO) is very high.
“If we keep, say 30 per cent for downstream activities in Sabah, we can create more wealth and job opportunities for the locals,” he said in an interview here.
He said that among other things, oleochemical products could be used to make biodegradable plastic bags.
Teo, who oversees the State Economic Planning Unit, said the state’s economy had grown from strength to strength in the past five years.
“This shows that all the development efforts undertaken by the government have been effective and fruitful.”
Together in partnership with the private sector, he said the state’s economy had grown significantly by about 25 per cent from a Gross Domestic Product (GDP) of RM59.3 billion in 2011 to RM73.8 billion in 2016.
Teo said Sabah’s economy ranked the fifth largest among all the states in Malaysia.
Income per capita rose from RM19,648 in 2011 to RM21,081 in 2016, whereas mean monthly household income has also risen by RM1,341 in four years, from RM4,013 in 2012 to RM5,354 in 2016.
In comparison, the national average monthly household income for year 2016 was RM6,958.
The services sector contributes about 40 per cent to the state’s GDP and remains the largest contributor to the economy of Sabah, he said.
“The services sector, including tourism-related services and government services continue its vibrancy, reflecting 31.4 per cent growth in its contribution to GDP in the past five years,” he said.
Teo said Sabah was also attracting an increasing number of tourists.
In 2011, the state only recorded 2.8 million tourist arrivals but this number has increased to 3.4 million in 2016, which translated to an estimated RM 7.2 billion in tourism receipts.
“From January to September 2017, tourist arrivals grew by 9.6 per cent as compared with the same period last year.
“Compared to the past five years, tourists coming into the state are not only overwhelmed by the our beautiful and scenic nature, but are now also overwhelmed by the many choices of shopping malls, including Suria Sabah, Imago Shopping Mall, Oceanus Waterfront Mall, Grand Merdeka Mall and Megalong.”
Meanwhile, Teo said hotels are also experiencing full occupancy.
“The government will continue to aggressively attract more investments in five-star hotels and develop more new tourism products as our tourism sector has yet to be tapped fully, particularly at the district level.”
He said the new hotels currently under construction were Crown Plaza Hotel, Holiday Inn and JW Marriott.
At the same time, Teo said the Sabah International Convention Centre (SICC) was expected to be completed by August or September next year.
“The convention city, consisting of three, four and five-star hotels, together with other facilities will be built in the near future.”
On the other hand, Teo said government services contribution to the state’s GDP grew by 39.4 per cent from 2011 to 2016.
He said human resource empowerment remained one of the key agendas of the state government.
To train and empower the rural population, the government has established University College Sabah Foundation (UCSF), Sabah Animation Creative Content Centre, Sabah Handicraft Centre, Sabah Skills Centre, polytechnic, technical institutions and Sandakan Education Hub, while the establishment of private colleges were also encouraged and supported.
At the same time, Teo said the number of schools in Sabah had increased to 1,293 schools to ensure access to education reached every corner of the state.
He also thanked the federal government for the RM 1 billion allocation in Budget 2018 to repair dilapidated schools in Sabah.
Besides that, Teo said healthcare services in government hospitals had improved and upgraded substantially, both in terms of the provision of better facilities and access to specialists.
“The rakyat is also offered with more choices with the setting up of four high-quality private specialist centres.”
The number of clinics serving the rural population has increased from 77 in 2011 to 104 in 2016, whereas 1Malaysia clinics have increased from only six in 2011 to 38 to date throughout Sabah.
Teo assured that ongoing efforts would continue to ensure the rural population enjoyed better provision of treated water and electricity supply, as well as construction of rural roads.
He said rural supply of water coverage had risen from 57 per cent in 2011 to 76 per cent in 2015, while rural electricity coverage had grown from 87 per cent in 2011 to 95 per cent in 2015.
On poverty rate, Teo said the government’s effort to eradicate poverty had been effective even though more still needed to be carried out.
Nonetheless, the poverty rate in Sabah has reduced substantially from 19.2 per cent in 2009, to 8.1 per cent in 2012, four per cent in 2014 and 2.9 per cent in 2016.
The mean monthly household income of the rural population has also risen from RM 3,773 in 2014 to RM 4,068 in 2016.
As important enablers to the economic growth, Teo said the transportation and logistics sector would continue to be upgraded and expanded.
“Having good land, sea and air connectivity is crucial to spur the economy.
“Trade will grow and investment will flow into the state, while an additional 1,153 kilometres of roads have been constructed from 2011 to 2016.
“The development of the Pan Borneo Highway will surely catalyse economic growth along its path and beyond.”
With the strong financial support from the federal government to spearhead the expansion of Sepanggar Bay Container Port, he said this port was poised to transform into a transshipment and trading hub.
At the same time, Teo said the upcoming development of an international cruise terminal would further enhance the state’s growing cruise tourism industry.
He said more international direct flights from Kota Kinabalu to popular destinations in China were also seen this year and next year, the latest being the Kota Kinabalu-Beijing direct flight via Xiamen Air.
Teo said the GDP contribution of the mining and quarrying sector had risen to RM 21.8 billion in 2016 from RM 12 billion in 2011.
“Coupled with gradual recovery in oil prices, this will auger well for the state government’s revenue.”
In the first nine months of this year, he said the export value of crude petroleum had risen by 37.3 per cent to reach RM 15.1 billion as compared with 2016.
Meanwhile, Teo said the agricult ure sector contributed about 20 per cent to the state’s GDP in 2016 and had performed reasonably well this year.
“Production of CPO grew by 3.8 per cent in the first nine months of this year, and export value rose by 8.4 per cent, amounting to RM 10.3 billion, supported by higher prices of CPO.”
The export value of rubber has also doubled to RM 226.8 million with 26 per cent rise in export volume and 36.5 per cent increase in prices from January to September this year.
The manufacturing sector recorded eight per cent growth from 2011 to 2016, with RM 5.54 billion contribution to GDP recorded last year.
Teo said the Sabah Oil and Gas Terminal in Kimanis and Sabah Ammonia Urea (Samur) project were two major game changers in the oil and gas industry in the past five years.
He said shared services and outsourcing centres had been established at Kota Kinabalu Industrial Park (KKIP) to assist small and medium enterprises (SMEs) to market their projects both domestically and internationally, while a digital free trade zone would also be developed at the industrial park to attract more trade and investments into the state.