Twin parks boost joint development

Khairy Akmal Ismail, a 20-something chemical engineer, has seen how the rise of the Malaysia-China Kuantan Industrial Park has created opportunities for locals and brought development to his hometown.

Khairy, a senior executive at Alliance Steel, one of the biggest steel makers in Malaysia and among the first companies to set up a plant in the park, said his friends and neighbors have managed to buy homes and cars thanks to jobs created by Chinese companies that had invested in the industrial park.

New roads were also built near the park, allowing residents to travel to the nearby state of Terengganu.

Before the park was set up, Kuantan offered few opportunities for its residents, Khairy said, but everything changed when companies such as Alliance Steel started recruiting workers.

The company offers jobs even to those who have diplomas but no university degrees, he said. "They can try to apply, and we will give them training to help them grow."

The park, which opened in 2013 and is located in the East Coast Economic Region, covers more than 14 square kilometers and caters to heavy and medium industries, light industries, residential and commercial components. The park is part of the Two Countries, Twin Parks collaboration model between China and Malaysia.

Its sister park, the China-Malaysia Qinzhou Industrial Park, opened in Qinzhou, Guangxi Zhuang autonomous region, in 2012.

Lee Chun Fai, the Malaysian shareholder representative for the Malaysia-China Kuantan Industrial Park, said the China-Malaysia collaboration produced a "very resounding success" for the industrial park.

"The growth of foreign direct investment in (Kuantan) has been very encouraging," Lee said. The park has extended many benefits to its investors including tax incentives, infrastructure development and grants for skilled workers, he said.

Lee welcomed the Two Countries, Twin Parks collaboration model because it means that both sides are simultaneously promoting the two parks. Both countries are "making use of each other's capability" and working for mutual benefit, he said.

"For example, when Chinese investors come in, we in Malaysia will be able to help them to navigate the local requirements."

Development and construction of the Malaysia-China Kuantan Industrial Park is in full swing. It hosts 13 projects with a total investment of about 46 billion yuan ($6.3 billion) and has generated a cumulative industrial output value of more than 60 billion yuan. The park is said to have created about 5,000 long-term jobs and has brought an annual increase in throughput of nearly 10 million metric tons to Kuantan Port.

Zhuang Yan, deputy secretary of the Joint Cooperation Council Secretariat, Qinzhou Port Area of China (Guangxi) Pilot Free Trade Zone, said the China-Malaysia Qinzhou Industrial Park is the third international park jointly built by the Chinese government and a foreign government.

Key node

The aim is to make the park a key node of the New International Land-Sea Trade Corridor to promote connectivity and development of both countries as well as the broader region. Since the park was set up, it has rapidly expanded its development scope and brought in many industrial projects, Zhuang said.

By last year, a total of 249 projects had been set up, with cumulative investment in park development and construction reaching about 8 billion yuan. The value of imports and exports combined was 35.2 billion yuan and the cumulative actual use of foreign capital reached $820 million.

The park has developed a cross-border industrial and supply chain for processing and trading projects with "ASEAN characteristics", including bird's nest, durian, palm oil and recycled aluminum, Zhuang said.

Allen Phua Lan Tat, general manager of the internal audit department of Minko International, a palm oil producer and exporter in Malaysia that has invested in the park, said it has unique advantages in location, platform and policy.

Minko has also expanded its business "by leveraging the unique geographical advantage of Qinzhou, which is facing ASEAN and backed by the market of Southwest China".

"Qinzhou Port is the closest port to ASEAN, so by taking advantage of its transport connectivity that links sea and rail as well as the new western land-sea corridor, we have effectively reduced cost and increased efficiency," Phua said.

Chin Yew Sin, president of the Malaysia Strategy Research Center, underlined the importance of the Kuantan Port in the development of the two parks.

"The short distance between Kuantan Port and Qinzhou Port has cut down the cost of transportation between them," Chin said. "This will bring benefits to both Malaysia and China business people so that their imported goods or products from either Malaysia or China will be more competitive in each other's country."