Is there future for Industrial Investment Development in Kedah?

After 100-days of elections in Malaysia, I feel like to write something as a rakyat of Kedah. It is up to you on how you want to interpret it.  I would like to form my own opinion and assumption for the next 5-years. For the State, please take it positively. If not the result will be the same. I wish the new led government headed by Mukhriz is really committed and brave enough to make decision even though it will make him unpopular.  

In my observation, if he relied more on federal government for assistance to create a significant impact in industrial investment activity in Kedah, with due respect sir, I would say, State of Kedah Darulaman will remain the same for the next 5-years. I have seen it before and no doubt, it will be the same if you play it safe.

Nothing much we can expect the Malaysian federal government to do for us Kedahan especially in this industrial investment development per say. Why? The answer is simple.  Mukhriz was as Deputy Minister of MITI is fully aware on how active the Malaysian government via the Federal government who had committed a lot of funds either in grants or even intervene in the land price (even though it is a state authority) or in simple words, subsidize the foreign industry investment in Malaysia since Pak Lah time.

Thus, Mukhriz must capitalize his own experience as corporate leader and Deputy Minister of MITI to revitalize the industrial investment development in Kedah especially in Sungai Petani and Kulim. With due respect sir, i hope and pray for you to forget about your ambition to turn your own place Jerlun and the related 'kawasan' for the next hub of industrial investment destination. It will be a waste of state resources and time to turn a place  that was not even in an original plan for the industrial development in Kedah Darulaman.

The only things that Ustaz Azizan and his team did not do for Sungai Petani and Kulim during his days and even during Mahdzir Khalid, is to ‘nationalize the industrial land’. Time has come for Mukhriz to do this as mention in my earlier article about the importance of creating the 'Special Purpose Companies’ (SPC/SPV) in acquiring back the industrial land in Sungai Petani and Kulim industrial land by the State via its agencies. This effort will enable MIDA/MITI to locate their identified high impact companies to this area for next 1-2years time.

Now, Sungai Petani landscape has changed a lot if compared with those days. The existence of new international school, the readiness rail network, a few numbers of private hospitals and private universities, the near distance to the port of Penang, and impressive road infrastructure readiness should be maximum capitalized by the State of Kedah Darulaman to entice the worldwide potential investors who are known readily have abundant of cash now to invest.

It is understood that we might lacking in terms of talent pools and technical experts. However, this talent issues are worldwide issue. It is across the globe even the USA and Singapore also facing the same issues when the reputable Multinational Corporation would like to locate from A country to B country. It is not happening in Sungai Petani or Malaysia. 

The State Government of Kedah must proactive and aggressive enough to do the promotion activities and positioning Sungai Petani as potential investment destination. The State must promote this area to the potential investors. This is where the State of Kedah Darulaman lacking most if compared to other states such as Penang, Selangor and Johor. No doubt the related agencies might fiercely stand off with the lacking of budget or personnel in doing this but by knowing them in person, i think, it is about time Mukriz to replace the officers with new fresh and energetic officers.

The promotion activity does not mean by sending a large of number of people to join the Trade Investment Mission or organize a big event in overseas etc etc. However, it will be more efficient by packaging a complete package to the targeted investor to invest in Sungai Petani. The package may include the competitive land price and also competitive and convenient housing package to the company staff. This could only be done by Mukhriz as a head of state who has executive power in the SPC company later on.   

For instance, if you request to meet Apple Inc in USA compared to MIDA Overseas Director  and persuade Apple Inc to open their Southeast Asia Region service centre in Sungai Petani by giving them your approval letter with complete size able land, state grants incentive etc etc, i think is more efficient compared to the MIDA Overseas Director knocking their doors and playing golf with their staff. 

The only question now is how far Mukhriz is willing to exercise his authority to 'knock' his own team to work for the state more which benefits the rakyat's as a whole compared to work for enrich themselves within the next 5-years ?

Only time will tell.

No New Industry Investment for Sungai Petani?

Based on the figures that disclosed by PKNK,it seems like PKNK do not have anymore industrial land projects for the developed areas especially in Sungai Petani since late 90's. Therefore, it is a proven and a clear fact that why Sungai Petani left behind if compared to other urban area that developed in Malaysia such as Subang Jaya and Petaling Jaya in Selangor.  With an active roles of PKNS in developing their urban area in 90's, make a significant changes in those area in Selangor.

For Sungai Petani to grow further as a developed area in Kedah, the related agencies in industrial development must find an immediate solution by bringing a large Multinational Corporation (MNC) or a sizeable GLC companies to operate in Sungai Petani like the early days of industrial development in Kedah by bringing Matshushita Group and Sharp in Sungai Petani. 

Sungai Petani once considered as preference choice by Japanese investors led by these two companies. Then, Taiwanese investors and after Naza KIA plant in Gurun Industrial Estate, Korean also make a wave to Sungai Petani. Now, surprisingly , there are no new investment from these three countries. There must be something amiss or went wrong.

The current 'boom' in Sungai Petani is mostly supported by the 'property boom price' after the opening of Tesco project, Bandar Laguna Merbok project, Project 88 by Plenitude and at the same time the increase of government servant salary by the Pak Lah government.  In my observation, this township growth mostly are supported by the government servant salary as most of the Federal government agencies and State agencies are located in Sungai Petani. In fact this 'Pak Lah chain of effect' is not only noticeable at Sungai Petani but the whole nation especially at the remote areas or district. Even though, Idris Jala or PEMANDU is proudly championing the 'creation of high income job' but most of the 'high income job' are still concentrated in the Greater Klang Valley.

Back to Sungai Petani, this is considered a stable and 'play safe' urban development. However, the State government of Kedah must look beyond 10-20 years. For those who notice that, there is NO new investment either by new industry player or by the current investors such as Sharp and Hicom Honda. No doubt that Idaman Pharma being taken over by Pharmaniaga but this investment is still not sizeable enough to cater the needs of the residents of Sungai Petani. Yes it is easy to blame because PAS government rule the Kedah government for the last 5-years, however, as a rakyat of Kedah Darulaman, i am still doubt , Mukhriz government will bring a new change to Kedah Darulaman. 

The time has come for Mukhriz to change the mindset of Kedah Civil Servant or proudly call them as KCS. By hook or by crook, the KCS must give emphasize into this urban development. The urban development is not only by creating and approving a lot of Taman Perumahan and converting those paddy field to be Shell gas station or Petronas Station or build commercial shop selling cars etc etc, but, time has come for Kedah government to really look into the creation of job especially the highly skill job with an average RM 3000 per month in Kedah Darulaman especially in Sungai Petani. 

The different of our urban development compared to the other area in developed country, the development of the area in the developed country is actually started with an industry or a company. However, in Sungai Petani, the current rapid growth of this area is merely supported by the 'property boom price' since the opening of Tesco and jack off property price of the new Taman perumahan and also the Bandar Laguna Merbok. It is no doubt that mostly the bankers in Malaysia are also 'play safe' by enjoying giving approval to properties project however this is not healthy in the long run. End up the properties will be own by foreigners or even not the rakyat Kedah himself.

In my observation, with the limited number of 'job creation' and the 'speed' of job creation by the private sectors and government sectors in Sungai Petani area itself will hurt the retailers and at the end will give more effect to the owner of the properties especially for those who buy for investment purposes and plan to rent it out to the retailers. Move forward, Sungai Petani will be considered 'dead town' again if Mukhriz government fail to look into this matter seriously. In fact, Mukhriz government is facing more difficulties compared to his father time to develop Kedah Darulaman. The most hurdle that Mukhriz government will face is the subsale or secondary sale of industrial land due to lacking of industrial land or sizeable industrial landbank owned by PKNK in Sungai Petani. The price of the land will definitely 'fear off' the potential investors to come and invest in a big way.

Time has come for Mukhriz to make the following step or bold decision by creating the special purpose vehicle (SPV) companies or you may brand it as 'Special Purpose Companies' or whatever title you want to add on it. This SPC/SPV function must look into mechanism to acquire most of the empty Industrial Plants or land in Bakar Arang Industrial Estate, and Sungai Petani Industrial Estate (nearby the old Matshushita). 

In fact,this SPV/SPC also may acquire the empty industrial land or plants even as far as in Kulim Industrial Estate. With due respect sir, no need for the Chief Minister Inc or PKNK to create a new industrial estate or creating a new area because it will hurt the overall industrial development in our state as our talent pool are not there yet.

This effort will eliminate the first hurdle which is the most significant or the hard part to entice the potential investors to come and invest either in Sungai Petani or even Kulim and Kedah itself.  On top of all, the Chief Minister must find a potential investors  who is keen to develop the youth of Kedah as Sungai Petani and Kulim are consider relatively have a size able youth with a vast of potential to be developed. Move beyond the classic industry investment like high tech companies etc etc, the Chief Minister may look into the business model of Lim Kok Wing and find his advice on how to turn the Sungai Petani like what he did for Cyberjaya. 

Time is running out for Malaysia especially for Sungai Petani and State of Kedah because the competition for the quality investment is really fierce for the next 10 years. If the Chief Minister and his team still do the same things in the name of protection of few property developers and protecting the 'market', eventually, the rakyat's will face the music with high unemployment rate amongst the youth, the retailers could not meet the commitment to pay their end of the month rental of their shop, the kedai kopi towkey could not sell his bread and even the 'towkey' Petronas and Shell petrol stations could not sell his petrol to his regular patrons in next 10-years.



 

   

Overview

Basically, industrial estates or industrial parks in the State of Kedah Darulaman are developed by government agency known as Kedah State Economic Development Corporations (SEDCs) or Perbadanan Kemajuan Negeri Kedah (PKNK).  However, private developers have also contributed in industrial land development in Kedah too. Prices and lease arrangements are varied according to location.

The Industrial Land in State of Kedah Darulaman

The selling price for industrial land in Kedah if by PKNK is estimated at USD 7.00 per sq.ft. or RM23.00 per sq.ft. However, for the private developers industrial land , the price might be slightly expensive. In fact, according to unofficial source in private developers, nowadays, the secondary sale might recorded as high as RM 70.00 per sq.ft. 

The industrial estates that developed by PKNK are as follows:

i.) Bukit Kayu Hitam Industrial Estate

ii.) Mergong II Industrial Estate in Alor Star

iii.) Mergong Barrage Industrial Estate in Alor Star

iv.) Gurun Industrial Estate

v.) Sungai Petani Industrial Estate 

vi.) Bakar Arang Industrial Estate

vii.) Tikam Batu Industrial Estate

viii.)Kuala Ketil Industrial Estate

ix.) Kulim Industrial Estate

x.) Kulim Hi Tech Park(KHTP)

For the  KHTP, the overall development is oversee and managed by Kulim Technology Park Corporation (KTPC), a wholly subsidiary of PKNK. This industrial park is considered as Malaysian Federal government national project which fully funded and supported by the Federal government of Malaysia

The Total Industrial Land Development by PKNK for the State of Kedah Darulaman as at year 2011

For your information, the major private developers in State of Kedah that actively involve in industrial land development and industrial properties according to the area as follows:

Kulim area

i.) Kulim Hi Tech Park (KHTP) managed by KTPC

ii.) Taman Industri Waja developed by Keat Yew Sdn.Bhd.

Sungai Petani area

i.) Eupe Corporation Berhad ( pioneering the industrial land development in Sungai Petani)

ii.) Bolton Berhad ( Bandar Amanjaya Industrial Zone)
iii.) MIDF (for MIEL Sg Lalang Industrial Zone)

Other areas

i.) Teguh Harian Sdn.Bhd ( for Alor Star)

ii.) Bina Darulaman Bhd (for Kuala Ketil and Bandar Darulaman,Jitra)

iii.) DXN Land Sdn.Bhd (for Alor Star)