35
YEARS HENCE: SARAWAK'S INDUSTRIES
After 35 years of Sarawak's 'Independence' within Malaysia, the various industrial
sectors of the state's economy have generated a substantial amount of wealth
for the country.
There has been a shift in emphasis
from a largely agricultural economy of the 60s and 70s to one of high-tech industrial
ventures of today. Nevertheless, Sarawak's industries have always been based
on her vast amount of natural resources. The state's economy has depended and
continue to depend chiefly on petroleum and gas and forestry. Other industrial
sectors include agriculture (pepper, palm oil, sago, rubber, coconut and cocoa)
and a developing manufacturing sector.
The state government strategies for
industrial development have made Sarawak's industries the envy of the region.
These strategies are:
- to develop more industrial estates
in major towns and in less developed areas with economic potential. The development
especially of a mini industrial corridor will facilitate and enhance inter
and intra industry linkages in the state.
- to develop more areas to benefit
from special incentives and exemptions under Free Industrial Zones/Free Trade
Zones.
- to provide appropriate incentives,
industrial training facilities and development of strategic industrial sites
to encourage more private sector participation and productive investments.
- to promote foreign investment
in higher value-added and high-tech industries.
Growth in Manufacturing Sector Performance
The manufacturing industry in Sarawak
began as a small sector contributing only marginally to the growth of its economy.
Its activities in the 9160's were largely confined to primary processing of
local raw materials especially timber and production of simple import substitution
products.
However, in the 1980s Sarawak embarked
on the restructuring of its economy to reduce its reliance on the primary sector
as its source of growth. In the economic restructuring programme, the manufacturing
sector has been accorded a high priority sector to provide growth impetus to
the economy. The Ministry of Industrial Development (MID) was formed
in 1987 to be the lead agency in Sarawak to spearhead the development of the
manufacturing sector.
Prospects for future industrial
growth
The economy of Sarawak is targeted
to grow at 10% per annum in the Seventh Malaysia Plan (7MP 1996 - 2000).
It is vital, everything else being equal, that the State economy grows at
this rate to enable it to achieve the Vision to become a developed State in
the year 2020.
During this period several sectors
have been identified as the focus of growth namely, manufacturing, commercial
agriculture, construction and services including tourism. The two traditionally
dominant sectors of forestry and mining will still provide some
substantial revenue for the State economy during the plan period.
Manufacturing
The manufacturing sector is targeted
to grow at 20% p.a. and will account for 29% of the State's GDP by the year
2000. In line with the State's effort to increase productivity and intensify
industrial linkages, this will mean that considerable higher value-added downstream
processing activities in the timber and agro-based industries will need
to be realised during the Plan period. In promoting growth of timber industry,
Tanjung Manis, Kemena and Kuala Baram will be the main timber processing zones.
Sarawak is one of the world's largest exporters of tropical hardwood timber.
Today, secondary processing timber industry is well developed with the established
of plywood, veneer, sawmilling projects and integrated timber projects in various
timber processing zones. Future development of the timber-based industry will
concentrate on producing higher value finished and semi-finished timber products.
Capital-intensive hi-tech industries
- Electronics
Presently, the government of the
electronics industry with the establishment of a free industrial zone. Prospects
are bright for the electronics industry as a Multi National Corporations (MNCs)
from USA and Japan are already establishing their manufacturing facilities in
Sarawak to take advantage of Sarawak's strategic location in the expanding Asian
market. The infant electronics industry which got a strong push during the early
period of 6MP with its concentration in the Sama Jaya Free Trade Zone (formerly
known as Muara Tabuan FTZ) is expected to generate new growth impetus for the
sector. In turn, this will facilitate in promoting and enhancing high technology
and knowledge-based industries. In support of this push to promote industrialisation
in the State, it is expected that the Natural Resources Park will provide
the necessary R & D needs. In addition, the state government is actively
wooing small and medium industries (SMIs) which will pay a crucial role in supporting
these macro industries.
Oil & Gas
Sarawak is blessed with vast petroleum
and natural gas resources, producing almost a third of the total oil production
in Malaysia. Sarawak is also the leading producer of natural gas, having established
several major industrial state-of-the-art plants. These include the Liquefied
Natural Gas (LNG) plants - capital investment of RM3.3 billion - in Bintulu,
the Asean Bintulu Fertilizer (ABF) plant - RM786 million and the middle Distillate
Synthesis (MDS) plant - RM1.8 billion. The petrochemical industry will
further witness the full operation of MLNG II and possibly the construction
of MLNG III plant. Sarawak definitely has the competitive advantage in the processing
of these resources. With the increase in petroleum and gas production, various
other petrochemicals projects have sprung up including plastics industry. The
search and discovery of new gas fields are continuing.
Agriculture (Commercial)
Sarawak has large tracts of land
suitable for commercial agricultural developement. 32.4% or 4,002,263 hectares
of Sarawak's total land area have been identified as suitable agricultural land.
However, only 8.7% of this is planted with productive permanent crops, while
the balance is still under shifting cultivation for hill padi (estimated at
more than 1.6 million ha).
Intensive research is being undertaken
by the Department of Agriculture, Sarawak and other agencies on peat land to
study its potential. The state government actively encourages development of
commercial agriculture projects by the sector. The large tracts of land and
suitable agroculture climate in Sarawak could be tapped for large-scale plantation
of oil palm rubber, pepper, coconut, sago, pineapple and fruits as well as livestock
and aquaculture development. Efforts are currently being directed towards the
development of integrated agriculture projects which incorporate not only the
cultivation but also the processing of agricultural commodities, thereby increasing
value-added properties to this sector.
Under the 7MP, the agriculture sector
is targeted to grow at 14% per annum. This growth will be spearheaded by increased
production from matured oil palm areas which cover an estimated cumulative area
of 176,000 hectares for the Plan period. A commercial approach (as opposed to
the traditional subsistence/subsidiary-based approach) will be adopted for the
development of the smallholder subsector. With this approach, small, fragmented
farm holdings especially those on Native Customary Lands will be consolidated
into viable nucleus/mini estates. In addition to oil palm, the other agricultural
commodities that will be developed on a large scale basis will include sago,
rubber, rehabilitation of cocoa/coconut intercrop and pineapple.
The private sector will be playing the major role in the development of these
commodities. In particular, the private sector will generate their own sources
of fund to finance these activities.
Potential Industry - Biotechnology
Sarawak's vast reserves of natural
resources, largely untapped, are also a source of promising opportunities in
the field of biotechnology. Its forest resources, which yet prove to be a major
source of exciting discoveries in Sarawak government is encouraging efforts
to advance research and development (R & D) in biotechnology.
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