Well-calculated strategic business decision behind SEDCs purchase of Bintulu land, says chairman
0 month ago, 23-Jul-2020
Tan Sri Datuk Amar Abdul Aziz Husain.
KUCHING: Sarawak Economic Development Corporations (SEDC) decision to buy two parcels of vacant land in Bintulu for RM340 million is in line with the expected exponential economic growth there, said its chairman Tan Sri Datuk Amar Abdul Aziz Husain.
He said SEDC was optimistic Bintulu has the potential to sustain its position as a world-renowned liquified natural gas (LNG) producer towards becoming a petroleum chemical (PetChem) hub in the near future with the establishment of Sarawak Petrochemical Hub.
Abdul Aziz said the hub announced by Chief Minister Datuk Patinggi Abang Johari Tun Openg on July 2 would also help to boost Sarawak governments efforts in job creation along with potentially contributing RM16 billion to RM20 billion in Gross Domestic Product (GDP).
Buying the land was a well calculated strategic business decision. It is also the only big piece of land available near the LNG petrochemical complex that is close to the seafront, he said in a statement today.
The Edge Markets in a report on July 17 said Naim Holdings Bhd’s wholly-owned subsidiary Petrochemical Hub Sdn Bhd was selling two parcels of vacant land measuring some in Bintulu to SEDC for RM340 million.
It also reported that in a statement to Bursa Malaysia, Naim had said the lands were located at the Kidurong Industrial area off Jalan Sabekas at Tanjong Kidurong, Bintulu. The lands have a 99-year tenure each expiring in November 2112, according to Naim.
Abdul Aziz said the land was sold at a discount of RM60 million or about 15 per cent of the market value of RM400 million and was well below market value based on valuation made by states Land and Survey Department as well as independent valuers.
He emphasised that SEDC bought the land, measuring some 1,002.2 acres, at a bargain and below the market price at RM339,000 per acre even though the Land and Survey Department valuation was RM344,000 per acre.
He also pointed out the acquisition of land was deemed necessary because SEDC could leverage on the establishment of the hub where the future downstream value-added integrated petrochemical complex would be located.
The establishment of Sarawak Petrochemical Hub will create a buzz of interest for key players in petrochemical industries and potentially it would attract investors as well as foreign direct investments (FDIs) where in return these will provide foreign funding, expertise and technologies to diversify industry / economy into downstream activities/products, he said.
Bintulu, he added, was considered ideal for the establishment of the hub due to the accessibility to feedstock, being the landing point of offshore gas fields and its close proximity to existing gas pipelines as well as the mass of activities such as ammonia/urea, LNG and Gas-to-Liquid (G-t-L) downstream industries coupled with the heavy industries in nearby Samalaju.
We must be aware that the global demand for petrochemical is surging and it will continue to grow. Thus, Sarawak has the potential to be an exporter of major or high value downstream petrochemical products generated through the investment activities in the hub, he said, adding that petrochemical products were found everywhere and were integral to modern societies.
He added the International Energy Agency (IEA) in a report entitled The Future of Petrochemicals Towards more sustainable plastics and fertilizers expected that petrochemicals would account for more than one third of the global oil demand growth by 2030 and around half by 2050.
As such, he said the link between a growing global economy as well as advanced technologies would be related to increasing demand for petrochemical products.
“The land acquired by SEDC was necessary to facilitate development of the PetChem hub which requires strategic and premium location.
“Once completed and fully operational, the hub will also stimulate Sarawaks economic development to become an export oriented economy where the development of Centralised Utility Facilities in the would generate revenue from services provided to the industry players e.g. facilities maintenance, internal transport system, waste management, security services, centralised power distribution, water supplies, Air Separation Units (ASU), steam, gas feeds and other feedstocks.
In addition to stimulating Sarawaks economy, the hub will also improve the quality of life for our local folks whereby there are jobs available there, public transportation and infrastructure would be developed and enhanced, he said.
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