SJER has vast potential based on own merit

SJER has vast potential based on own merit

Prime Minister Datuk Seri Abdullah Ahmad Badawi will unveil the master plan of the South Johor Economic Region (SJER) development project this Saturday. The SJER has been earmarked as the focus area for development in the southern region under the Ninth Malaysia Plan (9MP). Covering 3,200 sq km, the SJER growth triangle include Senai-Kulai in the north, Pasir Gudang-Tanjung Langsat in the east and Tanjung Pelepas-Gelang Patah-Pontian in the west. SJER would transform south Johor into a strong sustainable conurbation of international standing. StarBiz journalist ZAZALI MUSA speaks with people from different backgrounds on the SJER.



JOHOR BARU: The South Johor Economic Region (SJER) should have been implemented some 10 years ago when Malaysia enjoyed strong economic growth, according to Taiwanese investor and All Cosmos Industries managing director Tony Peng.

He said in the 1990s, Malaysia was one of the “darlings” of the Asian economies.

“Johor was in a position to develop it but I could not understand why the Government did not proceed,’’ he told StarBiz.

Peng set up a fertiliser plant in Pasir Gudang 10 years ago as he was confident about the future of the state.

Tony Peng
However, with competition from China, Indonesia, Thailand and Vietnam, Malaysia was no longer an attractive place to do business in due to escalating costs, he said.

The Government, he said should review the cost of doing business if it wanted to remain competitive.

He claimed that the state government had not done much to attract new investments or encourage existing ones to expand their operations.

The company, which also had a fertiliser plant in Shandong Province, China, found that the provincial government was more “business-friendly” offering many incentives for the investors.

“For instance, the land cost is much cheaper in China compared with Malaysia and the authorities there will build factories for investors for free.

“China is cheap. It is so attractive that investors or businessmen will be tempted to invest there,’’ he added.

The price of industrial land in Johor was not cheap especially land owned by the state government’s investment arm Johor Corp (JCorp).

He said the state government should ensure that the land was not sold unless the buyers wanted to develop it.

Lim Han Weng
Land, especially in the Pasir Gudang industrial area, had been sold to investors but have been left vacant for years.

“The state government should seriously consider revoking land belonging to local or foreign investors that had been left idle for many years,” he siad.

The Government should not look at the Shenzhen-Hong Kong as a model for the development of the SJER as Johor has its own unique features.

They include close proximity to Singapore, having two ports – the Johor Port and Port of Tanjung Pelepas (PTP) and land resources.

Peng said Johor had the potential to attract more Singapore-based companies, especially manufacturers, due to the high operating cost in the republic.

“Unlike Shenzhen which has no problem in getting labour supply from China, SJER has to depend on foreign workers for its manufacturing activities,’’ he said.

Real Estate & Housing Developers Association (Rehda) Johor branch chairman Steven Shum, the Government’s decision to freeze land sale within the growth triangle would send a wrong message to foreign investors.

Shum, who is also Tanah Sutera Development Sdn Bhd general manager, said delays in announcing the SJER development plan would only reflect on the poor delivery system.

“The Government should not freeze the sale of land in the SJER as the price of land will not increase overnight. It should focus on building the infrastructure .

“Land matters should be left to the private sector. Let the market forces decide on the best price,’’ he said.

Rehda was confident that the SJER would bring some good news to the Johor property market.

This year has been an unauspicious one for the property market as most of the Johor Rehda members had to reduce new launches by at least 50%.

“The Government should not look at the Shenzen-Hong Kong economic region as a model in developing the SJER,’’ he said.

The Shenzhen-Hong Kong formula worked because of cheap labour, vast tracks of land for development and cheaper land cost.

‘Rehda is confident that the SJER will bring some good news to the Johor property market’ Steven Shum
Since more emphasis has been on agriculture, land for vegetables and fruit plantation as well as animal husbandry should be opened up.

The country’s agriculture industry must be revolutionised with more downstream activities.

“The SJER can capitalise on its natural resources such as jungles and beaches to aggressively promote tourism,” he said.

The Government should also promote tourism and the Malaysia My Second Home (MM2H) project.

He proposed that the SJER provide resort homes, villas or retirement sanctuary for the rich people from Australia, Asean, China, India, Japan, the Middle East and South Korea.

Small and Medium Enterprises Association of South Johor president David Teh Kee Sim said it was premature to say whether the SJER would be successful as some 8MP projects were not fully implemented.

“Personally, I look at it positively, it is better to have a plan on the SJER than no plan at all,’’ he said, adding that it should benefit all Malaysians.

Residents within the SJER growth triangle could expect a better lifestyle and higher standard of living.

The small-and-medium-scale industries (SMEs) could expect higher inflow of foreign direct investments (FDIs) into Johor.

“Most of the SMEs based here are involved in the support industries and they are fast moving into the higher-end and bio-technology sector.

“Before implementing the SJER, the Government should listen to the grouses of the people, so that it can plan effectively.

“Good public transportation network is one of the key factors that would determine whether the SJER would be successful.”

David Teh Kee Sim
Teh stressed that the people were not against development but they wanted a balance between economic and non-economic gain.

“We could learn from others especially industrialised nations; mistakes should not be made in the planning of the SJER or we will pay heavily for it,’’ he said.

Apart from relocating their operations here, Singapore-based companies could also outsource from many SMEs in Johor at cheaper prices.

Yinson Holdings Bhd managing director Lin Han Weng said the Government must be more aggressive in promoting the SJER if it wanted to turn south Johor into a leading regional logistic hub.

Without promotion, the Senai airport which is part of the key components in the logistic hub could turn into a “white elephant”.

“It is only a matter of time before the Senai airport could emerge as a leading cargo regional hub,’’ said Lim.

The main problem faced by Senai Airport was that it was too near to Changi which was connected with major cities around the world.

Instead of competing with Changi, Senai should develop its own niche market probably as a transhipment hub for regional airlines and as a collection centre for cargos from countries in the region.

Lim said half of investors in Johor were from Singapore, as they wanted to be close to home and at the same time enjoy cheaper costs.

“Many Singapore businessmen are willing to commute daily from the republic to Johor Baru although they would be caught in the infamous causeway crawl.

“Many say Johor has two ports – Johor Port and PTP, but actually it “has” three – the Port of Singapore Authority (PSA),’’ said Lim.

He said if ships did not come to Johor Port or PTP, manufacturers could use the PSA to export their products.