What is SCORE? The 'Sarawak Corridor of Renewable Energy', or simply known as SCORE,  was  launched  on  11  Feb  2008  as  one  of  the  five  regional  development corridors  initiated  throughout  Malaysia.  It  is  targeted  at  accelerating  the  state's economic  growth  and  development,  as  well  as  improving  the  quality  of  life  of  its people. The core of the corridor is the abundance its energy resources in the central region  of  Sarawak,  particularly  hydropower  (20,000  MW),  coal  (1.46bn  tonnes),  and natural  gas  (40.9  trn  sq  cubic  feet).  This  initiative  will  enable  Sarawak  to  price  its energy competitively and stimulate investments in  the power generation and energy-intensive industries, consequently turning them into vibrant industries in the Corridor. By  capitalising  on  renewable  energy,  SCORE  targets  to  transform  Sarawak  into  a developed state by 2020.

A  focus  on  private  investment.  Private  investments  in  priority  industries  and  their  associated downstream  value-added  economic  activities  will  be  the  driving  force  behind  SCORE's  growth  and development. Chief among these are the energy-intensive industries, which will spur investments from an early  stage  to  become  an  advanced  industrial  base  in  the  Corridor.  Ten  priority  industries  have  been indentified,  namely  aluminium,  glass,  steel,  oil-based,  palm  oil,  fishing  &  aquaculture,  livestock,  timber-based, marine, and tourism.

Five growth nodes. Tanjung Manis, Mukah, Samalaju, Baram and Tunoh have been selected as the five New Growth Nodes with different focus areas:

i.  The  Mukah  Node  will  be  developed  into  a  Smart  City  and  serve  as  the  nerve  centre  for  the Corridor.
ii.  The Tanjung Manis Node will be developed into an Industrial Port City and Halal Hub.
iii.  The Samalaju Node will become the new Heavy Industry Centre.
iv.  Baram and Tunoh will focus on the tourism and resource-based industries.

The spatial development of the entire region, as well as the development of these New Growth Nodes, will also benefit the Corridor's Secondary Growth Centres, such as Semop, Balingian, Selangau, Samarakan, Bakun and Ng. Merit.

Bintulu  central  to  our  event.  The  once  sleepy  fishing  village  of  Bintulu  has  swiftly  transformed  into  a booming  industrial  centre  and  a  soon-to-be  capital  for  energy-intensive  industries  in  Malaysia.  The Samalaju Industrial Park, being only an hour and a half's drive away from Bintulu Airport, led us to decide to host our SCORE corporate event there.

Day 1: The journey begins 
A  three-day  excursion  to  Bintulu.  Inspired  by  SCORE's prospects  and  eager  that  the  investment community witnesses Sarawak's abundant energy resources, particularly in renewable energy, we took 18 of OSK's clients on a  three-day  excursion  to  'Ground Zero',  i.e.  Bintulu,  in  Sarawak.  The  following chronicles our journey through the 5-7 Sept outing, as well as the new discoveries we made during the trip.

Samalaju,  here we  come.  On  5  Sept  2012,  we  left for  Bintulu,  which took  2  hours  of  flight  time  from the Kuala Lumpur International Airport. We were greeted by an OSK East Malaysia representative and boarded a  coach  towards  Samalaju  Industrial  Park.  Our  ride  which  passed  through  oil  palm  estates  was  on reasonably  well-paved  two-lane  tar  roads.  Although  telecommunications  reception  was  intermittent,  we were amazed with the strength of our 3G connection as we approached the industrial park.

Two  nearly  ready,  two  still  in  progress.  As  we  entered  Samalaju  Industrial  Park,  we  were  surprised  to find  that  the  first  phase  of  Tokuyama  Corp's polycrystalline  plant  producing  silicon  for  solar  panels  was almost complete though it is only scheduled for commissioning in 2Q13. Moreover, structural works on the second phase of the plant seemed to have begun. Tokuyama is the Park's first foreign  investor. We  also caught  sight of Press Metal's aluminium smelting plant,  which  also  looked  ready  judging  from  the  outer facade though a source on the ground told us that it is only scheduled for commissioning next year. Aside from  these,  the  Australian  Securities  Exchange-listed  OM  Holdings  Ltd  (OMH)  and  Asia  Mineral  Ltd  have each separately planned to set up a manganese smelter under the SCORE initiative. As we passed by two adjacent  sites,  we  noticed  that  land  clearing  was  well  in  progress  on  both  and  structural  works  could commence soon. Meanwhile, we also understand that the water supply and power grids connecting Bakun Dam to Samalaju are now ready.

Quick  tour  of  Cahya  Mata  Sarawak  (CMS)  Workers'  camp.  Our  first  stop  was  at  Samalaju  Property Development's (SPD) Samalaju Workers Camp. Its General Manager Mr. Goh Chii Yew showed us around the  RM40m  site,  touted  as  the  best  of  its  kind  in  Malaysia.  It  accommodates  about  5,000  people,  with  a majority  working  for  Tokuyama.  Accommodation  costs  vary  from  RM1,000  per  month  to  as  high  as RM5,000 per month. According to management,  expansion plans are already in place  to cope with rising demand  from  Tokuyama,  which  will  require  8,000  site  workers  at  the  peak  of  its  construction  cycle. Meanwhile, we understand that the OM Materials and AML manganese ferro alloy plants were currently in its  land-clearing  stage.  We  were  impressed  by  the  facilities  and  services  provided  at  this  camp, notwithstanding the temporary unpaved road linking the site to the main road as proper road connections are supposed to provided by the Government.

Samalaju  Port.  The  opportunities  in  broadening  the  Corridor's industrial  and  economic  base  are  in  the resource-based  industries  and  the  provision  of  modern  services.  Samalaju  Port  SB  was  established  to facilitate the cargo handling needs of Samalaju's industrial development, which may give rise to demand for  13m-14m  in  tonnage  by  2015.  The  visit  kicked  off  with  a  briefing  from  Samalaju  Port,  followed  by  a tour of the actual prospective site, on which some dredging works are currently being carried out.

End  of  Day  1.  Our  road  trip  back  to  Bintulu  town  was  rather  smooth,  taking  slightly  more  than  an  hour. There  were  numerous  vehicles,  including  some  buses,  travelling  in  the  same  direction.  We  believe  the buses  may  be  ferrying  workers  returning  to  Bintulu.  We  think  it  is  just  a  matter  of  time  before  the Government is forced to upgrade the road. The expansion of the Kidurong-Samalaju road is already in the pipeline, with four new 'no overtaking' lanes (each stretching 1km and located at every 5km interval), at a total estimated  cost of RM20m. Finally, after a long  and tiring day, the entire party checked into the New World Suites Hotel for a quick change of clothes before proceeding to a seafood dinner near the hotel.

A successful conference. On the second day, we held a conference at New World Suites Hotel. We were deeply  appreciative  of  the  participation  from  RECODA CEO  Datuk  Amar Wilson  Baya  Dandot,  who  gave our  clients  first-hand  insights  into  SCORE,  including  its  latest  developments  and  challenges.  Six  public corporations  directly  or  indirectly  involved  in  SCORE  also  made  presentations  at  our  conference.  These included Cahya Mata Sarawak, Sarawak Oil Palms (SOP), Sarawak Cable and Shin Yang Shipping. Our party  asked  questions  relating  to  business  opportunities,  SCORE's viability  and  its  implications  on  the corporates  showcased  at  the  conference.  The  key  takeaways  from  the  companies' presentations are included in the last section of this report.

Visit to Bintulu Port. Day 3 (7 Sep 2012) began with us checking out from our hotel. Our visit to Bintulu Port kicked off with a quick presentation and Q&A session hosted by the company secretary of Bintulu Port Holdings En. Nik Abd Rahman Nik Ismail, who  briefed us on the group's operations, its future expansion plans and latest corporate developments.

Getting  up  close  by  boat.  In  order  to  experience  and  view  the  port  operation  up-close,  Bintulu  Port graciously arranged a ride on the company's tug boat. From the vessel, we watched the loading of LNG onto a MISC-owned vessel while being served light refreshments. Before the tour ended, our boat took us close to the general cargo terminal, where we saw a few cargo container vessels berthed at the wharf.

Last  stop  -  a  palm  oil  refinery.  Our group also visited SOP's palm oil  refinery  plant  located  almost adjacent to Bintulu Port. SOP's general plant manager and his crew brought us around the company's 1,500 tonne-per-day refinery and 500 tonne-per-day kernel crushing plant. Although the refinery was under maintenance, the plant manager gave us a good description of the refining process ' from CPO to refined palm oil, refined palm olein and palm stearin. At the crushing plant, we saw palm kernels being transported on  a  conveyor  belt  for  processing  into  crude  palm  kernel  oil  and  palm  kernel  meal,  which  are  used  as substitutes for coconut oil and feedstock respectively.

Bringing  it  together.  RECODA's  role  is  defined  by  the  Regional  Corridors  Development  Authorities Ordinance 2006, which was passed by the Sarawak State Legislative Assembly on 11 Dec 2006. It is tasked to manage, facilitate and promote SCORE's development and service investors. We felt honoured indeed that RECODA's management graciously delivered the conference's keynote address.  

A  clear  role.  RECODA  is  organised  and  managed  with  a  clear  commercial  mindset  focused  on  providing world-class customer service by minimising public service bureaucracy. It operates as a one-stop agency for investors. Its role includes:-

Strong commitment and vision. Datuk Amar Wilson is proud of the approximate RM24.6bn worth of private investments that SCORE has attracted despite having only RM1.8bn of total public funding spent to date. This represents  a  private:public  investment  ratio  of  94:6,  on  top  of  the  14,000  jobs  it  has  created.  According  to Datuk Amar Wilson, by 2030 the central region of SCORE Corridor is envisioned become the state's primary economic  powerhouse  and  Sarawak  will  have  achieved  the  level  of  development  and  quality  of  life  of  a developed  country.  However,  his  presentation  focused  on  the  medium  term,  with  2008-  2015  as  the foundation-laying  phase  for  the  corridor.  RECODA  will  focus  on  building  critical  mass  and  momentum  to stimulate  development,  implementing  high-priority  infrastructure  projects  and  attracting  high-priority  trigger projects. Meanwhile, the Government is committed to upgrading existing infrastructure, utilities and amenities as well as constructing new ones to meet the needs and requirements of investors within the Corridor.

The  Tanjung  Manis  Halal  Hub  '  another  area  of  development.  RECODA  also  highlighted  that  some 77,000  ha  of  landbank  in  Tanjung  Manis  have  been  earmarked  for  upstream  and  downstream  aquaculture and  agriculture  investments,  a  development  that  we  find  interesting.  This  delta  region  is  suitable  for  a  wide range of  aquacultural and agricultural  activities  throughout  the  year,  due  to  its  moderate, warm  climate  with minimal seasonal changes. There is also sufficient area to expand into or build a new port to ship produce. Some  13  bridges  have  been  built,  cutting  the  Sibu-Tanjung  Manis  road  travelling  time  from  many  hours previously  to  only  45  minutes.  Thus,  we  expect  to  see  a  hive  of  economic  activity  emerge  in  the  upcoming years.

No  fancy  investment  incentives,  only  cheaper  power! We  were  stunned,  and  believed  that  many  of  our clients felt the same way, when Datuk Amar Wilson said there are no specific incentives lined up for SCORE. Nevertheless,  applications  for  general  incentives  such  as  the  Investment  Tax  Allowance  (ITA)  and  Pioneer Status  (PS)  can  be  sought  from  the  Malaysia  Industrial  Development  Authority  (MIDA).  Besides  that,  we believe  the  cheap  renewable  energy  made  available  to  investors  is  competitive  and  compelling  enough  to attract investments from heavy industry players to Sarawak.

Source: OSK