Chinese and Malaysian companies agreed to invest 10.5 billion ringgit ($3.4 billion) on an industrial park in the Southeast Asian nation which will include steel and aluminum plants as well as a palm oil refinery.
China’s Guangxi Beibu Gulf International Port Group will jointly build the park in Kuantan with Malaysia’s Pahang state government and property developer SP Setia Bhd., according to a statement from the East Coast Economic Region Development Council. Jia Qinglin, chairman of China’s top advisory body, attended a ground-breaking ceremony with Malaysia’s Prime Minister Najib Razak today.
Jia, chairman of the Chinese People’s Political Consultative Conference, is on a four-day visit aimed at boosting business ties with the commodities-rich Southeast Asian nation. Najib proposed building the Malaysia-China Kuantan Industrial Park after the countries agreed last year to develop a similar estate in Qinzhou in southern China’s Guangxi region. Both cities have ports.
“A distinct and competitive supply chain will emerge between them,” Najib said in a speech. “There will be cross-border movement of manufactured goods with Kuantan Port and Qinzhou Port serving as trans-shipment hubs redistributing goods to markets around the world.”
Guangxi Beibu, SP Setia and the Pahang state government will invest 2.5 billion ringgit to develop the Malaysian park, according to the statement. The Chinese company will spend another 5 billion ringgit to build a steel plant, aluminum processing facilities and a palm oil refinery within the estate, plus 3 billion ringgit to expand Kuantan’s port with IJM Corp.
The palm oil refinery will be a joint venture with Malaysia’s Rimbunan Hijau Group, it said.
“This year, we expect more than 1 billion ringgit of Chinese foreign direct investment in Malaysia,” Najib said, adding that the Kuantan projects should create 8,500 jobs. “Over the next five years, we expect two-way trade to reach $100 billion.”