New windows open as neighbours get cosy

S'pore and M'sia look to work on projects together, get industries to join hands

By CHUANG PECK MING
IN PUTRAJAYA

DECADES after they went their separate ways, Singapore and Malaysia are poised to get closer to each other than ever before.

Not only will crossing the border become a breeze, but the two countries plan to develop properties together, complement Singapore's manufacturing skills with Johor's abundant labour and pave the way for electricity sales.

'There are many more areas for potential cooperation,' Malaysian Prime Minister Najib Razak told reporters after what he described as 'productive and fruitful' talks with his Singapore counterpart yesterday.

And his guest, Prime Minister Lee Hsien Loong, agreed: 'There should be more new initiatives that should be taken between both countries,' he said at a joint press conference after an hour-long meeting that saw the biggest-ever Singapore delegation turn up at the regular Malaysia-Singapore Leaders' Retreat.

Two-thirds of Singapore's Cabinet ministers were present at yesterday's pow wow.

The Singapore leader said he had proposed that Malaysia, especially Johor which is keen to build up its Iskandar development region, work with Singapore in industrial and manufacturing projects.

Singapore, skilled in manufacturing, and Johor, which is abundant in land and labour, should complement each other in industries, according to him. And the gains will spread to other industries like logistics and create more jobs.

A new work group on industrial cooperation will be set up to promote economic cooperation between Iskandar Malaysia and Singapore.

The Joint Ministerial Committee will also see if ferry and water taxi services can provide another means of linkage between Singapore and Malaysia.

Mr Najib is keen to sell electricity to Singapore, which is building a framework for importing electricity from neighbouring countries. Mr Lee welcomes the initiative.

'Singapore is very open to importing a certain proportion of our electricity,' he said. 'If the terms are right, if it provides us with an attractive offer, which we can't refuse. Of course, we will be happy to buy subject to proper clearance and safeguards.'

On the likely impact on the environment, Mr Lee said: 'That's something we will be taking seriously in mind. It will affect the immediate neighbours of the power station, which causes cross borders implication as well. (It's) something we have to pay attention (to).'

Other likely areas of cooperation which the two leaders explored are:

Digital broadcasts: Aligning the radio frequency spectrum plans for digital broadcast and broadband service in Malaysia and Singapore will allow them to meet growing demand for digital TV and mobile broadband, improve regional mobile roaming and provide competitive mobile broadband services.

Aviation and airport services: A tie-up between Senai International Airport in Johor and Changi International Airport may provide 'synergy between the two airports and spill-over to business enterprises from Malaysia and Singapore'.

Education: The countries may cooperate in higher education, technical and vocational education and teaching and learning of English. Singapore private educational institutions may also set up campuses across the Causeway.

The leaders agreed that with the thorny Malayan Railway Land issue out of the way, Malaysia and Singapore have been able to explore new areas of cooperation, especially in Iskandar Malaysia. And they were happy with the progress of the joint ventures of their respective investment companies, Khazanah Nasional and Temasek Holdings.

These include the Marina South and Ophir-Rochor developments in Singapore and the 'Urban Wellness' and 'Resort Wellness' projects in Iskandar Malaysia.

Other joint projects in connectivity, immigration, tourism and the environment have also gone well, according to the joint statement. The Rapid Transit System (RTS) linking Singapore and Johor Bahru is on schedule to be completed by 2018.

'A tender was jointly called on Nov 18, 2011 to appoint a consultant to undertake a joint engineering study to develop possible alignments and proposals for the RTS link,' the joint statement said.

Mr Najib said once the study's done, Malaysia will go along with the option that's most viable.

Both leaders don't see the projects slowing down, even with slower growth in the world economy. 'Investments are actually proceeding according to schedule,' Mr Najib said.

Mr Lee said the projects are for the long haul, not based on 'quarter-to-quarter fluctuations'.

Joint projects on track despite uncertain global economy

PUTRAJAYA: Malaysia and Singapore are confident the uncertain global economic outlook will not affect joint venture projects between Khazanah Nasional Berhad and Temasek Holdings which are meant for long term development.

Prime Minister Datuk Seri Najib Tun Razak and his Singapore counterpart Lee Hsien Loong believe their respective countries’ projected economic growth would be sufficient to push the projects forward.

Najib said there were no signs that the overall development of Iskandar Malaysia was slowing down and that the investments were proceeding according to schedule.

“We believe the current economic situation in Malaysia and Singapore would continue at a level that will provide a basis for the private sector to continue to invest in Iskandar, barring something catastrophic,” he said at a joint press conference after the two leaders met at their retreat here yesterday.

Lee said investors in the Khazanah and Temasek projects were interested in the long-term outlook rather than quarter to quarter fluctuations.

He said Singapore, which recorded a growth of 4.3% last year, was expected to see between 1% and 3% growth for 2012, adding that while this was positive, it would also depend on the international scenario.

“The more difficult the external environment, the more important it is for Malaysia and Singapore to cooperate and work closely together,” Lee said.

The two Prime Ministers earlier witnessed the exchange of shareholders agreements between Khazanah and Temasek in relation to the joint investments in M+S Pte Ltd and Pulau Indah Ventures Sdn Bhd.

Owned 60-40 by Khazanah and Temasek respectively, M+S will develop land parcels in Marina South and Ophir-Rochor in Singapore while Pulau Indah, a 50-50 joint venture between Khazanah and Temasek, will develop projects in Iskandar Malaysia.

Khazanah and Temasek also reported to the Prime Ministers on progress made so far, including the appointment of architects and key consultants by M+S for the development of Marina South and Ophir-Rochor.

The two parties are also discussing with banks the financing for projects that have an estimated gross development value of S$11bil (RM27bil). The projects are expected to be completed over the next six years with construction starting in 2013.

Pulau Indah will develop the “Urban Wellness” project, a five-acre (2ha) site in Medini North and the “Resort Wellness” development on a 210-acre (84ha) site in Medini Central.

The gross development value of the projects, which include a wellness centre, serviced residence and a corporate training centre, is estimated at RM3bil.

http://thestar.com.my/news/story.asp?file=/2012/1/6/nation/10212044&sec=nation

Pengerang power plant likely to supply electricity to S’pore

PETALING JAYA: There is a possibility that the sale of electricity to Singapore may come from a power plant to be built at Petroliam Nasional Bhd’s (Petronas) refinery and petrochemical integrated development (Rapid) complex in Pengerang, Johor.

While details on the sale were scarce at press time, sources told StarBizthat the electricity might come from Petronas’ planned power plant, which the state-owned oil firm’s executive vice-president for gas and power business Datuk Anuar Ahmad said last November was required for the Rapid project.

Prime Minister Datuk Seri Najib Tun Razak said following talks in Putrajaya with his Singaporean counterpart Lee Hsien Loong that Malaysian companies were prepared to sell electricity to Singapore.

The RM60bil Rapid project is expected to be commissioned by end-2016 and have multinational oil and gas companies as joint-venture partners.

Growth path: The electricity deal may be part of a strategy by Petronas to grow its gas and power business. Picture shows an aerial view of Petronas' gas processing plants (centre) in Kertih's Integrated Petrochemical Complex.

Besides the electricity sale, both leaders also announced that Malaysia and Singapore might construct an underground link as an expansion of the proposed rapid transit system between Johor Baru and Singapore.

Analysts believe the beneficiaries of an underground link project would beGamuda Bhd and MMC Corp Bhd, which were joint venture partners in the Stormwater Management and Road Tunnel or Smart project in downtown Kuala Lumpur.

Other areas of cooperation include the alignment of radio frequency spectrum plans for digital broadcast and mobile broadband services, the formation of a new work group on industrial cooperation to promote Iskandar Malaysia and Singapore.

Also in the pipeline are cooperation in aviation services between the Senai International Airport and Changi as well as education services. The electricity deal might be part of a strategy by Petronas to grow its gas and power business after acquiring a 30% stake in GMR Energy Singapore Pte Ltd in late September at an undisclosed price as well as investments in the Kimanis and Lahad Datu power plants in Sabah.

GMR is developing an 800MW combined cycle gas turbine power plant on Jurong island, Singapore while the Kimanis plant would be jointly developed by Petronas Gas Bhd in partnership with Yayasan Sabah through NRG Consortium (Sabah) Sdn Bhd.

The Lahad Datu plant would be built by a Tenaga Nasional Bhd-led consortium together with Petronas and a Sabah state entity.

http://biz.thestar.com.my/news/story.asp?file=/2012/1/6/business/10211890&sec=business

Undersea tunnel mulled

PUTRAJAYA: Malaysia and Singapore are looking at the possibility of constructing an underground tunnel to connect the two countries.

Datuk Seri Najib Tun Razak, who met his Singapore counterpart Lee Hsien Loong at their retreat here, said the two governments had commissioned a study on a viable option to improve connectivity.

The Prime Minister told a joint press conference: “We have also agreed to expand the study to include the possibility of an underground road connection between the two countries.”

The two leaders came out from their meeting yesterday smiling for the cameras with ties between the two countries, long hindered by the issue ofKTM Bhd land in Singapore, now at a satisfactory level for new areas of cooperation.

Lee said Singapore was also interested in buying electricity from Malaysia if the terms are right.

“Singapore is in the process of working out a framework to manage the import of electricity. Once it is ready, we welcome Malaysian companies to bid to supply electricity to Singapore. We hope some will succeed,” he added.

Najib said the sale of electricity would be a private sector initiative.

Towards better ties: Najib and Lee sharing a light moment during a press conference at Perdana Putra in Putrajaya yesterday.

“I believe the private sector of both sides will be in a position to determine the right price level when the time comes. I don’t see major difficulties,” he added.

The underground connection suggested is apart from the Malaysian proposed ferry service between Tuas and Puteri Harbour and comes under other means of transportation that the two countries are considering.

Najib said these modes of connectivity are in addition to the five new cross-border bus services launched in September 2010 and the Rapid Transit System link between Singapore and Johor Baru, scheduled for operation by 2018.

Lee also proposed that the two countries explore industrial cooperation in Iskandar Malaysia during the meeting, and the two leaders agreed that a new working group be formed under the Joint Ministerial Committee to promote mutually beneficial twinning of economic activities.

Lee said Singapore was a manufacturing country facing constraints of space and manpower, both of which Malaysia has, including in Iskandar.

He said Iskandar could provide industrial facilities and infrastructure that would allow Singapore companies and other investors to operate partly in the republic and Iskandar.

“The benefits are not just industrial (growth) but also spinoffs in terms of logistics, employment, residents, schools and services.

“Najib said this makes a lot of sense and this is something we want to work together,” Lee added.

Lee also called on the private sector to participate and invest in Iskandar as bilateral relations were good.

Other areas of collaboration discussed included cooperation in aviation and airport services between Senai International Airport and Changi International Airport.

The leaders encouraged the respective airport corporations to explore commerciallTy viable cooperation for synergy between the two airports, spilling over to business enterprises in Malaysia and Singapore.

Both leaders also welcomed Singapore-based private academic institutions to explore investment opportunities in education, including setting up campuses in Iskandar and Pagoh.

http://thestar.com.my/news/story.asp?file=/2012/1/6/nation/10213824&sec=nation

Petronas in talks with oil majors for petrochemical tie-ups

KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) is in talks with several global oil majors including Shell and Exxon Mobil to develop petrochemical plants within its US$20bil refinery complex in Johor, two sources with direct knowledge of the matter said.

The national oil company was also talking to Japanese firms Itochu Corpand Mitsubishi Corp as well as to Dow Chemical Co – the largest US chemical maker – as it sought to tap surging Asian demand and diversify its earnings, the sources told Reuters.

Petronas is expected to make a decision on the partnerships by mid-2012, which signals it is quickly moving beyond the feasibility stage of the project.

“Petronas is getting a lot of interest for the joint-venture undertakings,” said one source who declined to be identified as the talks are ongoing.

“They have moved to the basic engineering and design stage and after this, the tendering process for building the complex will start,” the source added.

Petronas, Shell and Mitsubishi officials in Malaysia declined to comment. Itochu, Dow Chemical and Exxon Mobil were not immediately available to comment.

Petronas first unveiled the Refinery and Petrochemicals Integrated Development (RAPID) project in May and has said the complex would be commissioned by end-2016, which both sources said was on track.

The project is key to Petronas’ plan to join the likes of India’s Reliance Industries in grabbing a larger share in the US$395bil global market for specialty chemicals – high-value raw materials used in products from diapers to higher performance tyres and LCD televisions.

“In terms of markets for petrochemicals coming from RAPID, Petronas is aiming for Myanmar, Bangladesh and parts of the subcontinent,” said a second source. “The potential is there as these are huge markets or in the case of Myanmar, just opening up.”

The RAPID project will include a 300,000 barrel-per-day refinery that produces naphtha, gasoline, jet fuel, diesel and fuel oil.

The first source said the crude feedstock would come mostly from Petronas’ equity projects in Sudan, Chad and eventually Venezuela instead of Malaysia’s own higher quality and expensive crude, domestic production of which is slowing.

The crude feedstock from Petronas equity projects will also be channelled into the petrochemicals and polymer complex, including a three-million-tonne per year naphtha cracker and petrochemical derivatives facility focusing on synthetic rubber.

“Over one million tonnes will be for ethylene and propylene and the rest for high grade specialty chemicals,” said the first source.

“Synthetic rubber is a big thing. Nearly 90% of a tyre is made of synthetic rubber because natural rubber production is declining in Asia, so there is an opportunity for Petronas,” the source added.

The RAPID project gives Petronas’ downstream operations a better chance of staying afloat in times of economic downturns and poor margins as it allows Malaysia’s only Fortune 500 company to tap into its global feedstock sources, analysts say.

“From a Petronas perspective, there is vertical integration opportunity,” said Andrew Wong, lead analyst covering Petronas at Standard & Poor’s in Singapore.

“I think the expectation for a recovery in the petrochemical sector in 2011 did not quite happen due to the external factors and there is concern whether the project will come onstream at a good point in time of the global economic cycle,” he added. — Reuters

http://biz.thestar.com.my/news/story.asp?file=/2011/12/24/business/10156177&sec=business

GIC connection may have given Sunway a leg up

Purchase of Iskandar land for RM25 psf is cheaper than recent deals in the area

By PAULINE NG
IN KUALA LUMPUR

THE Government of Singapore Investment Corporation (GIC) is believed to have played a significant role in Sunway Bhd's acquisition of 691 acres of land in Iskandar Malaysia for RM745 million (S$305.1 million) or RM25 psf, a transaction viewed as beneficial since it is cheaper than recent land deals in the area.

Analysts were mainly upbeat about the move although somewhat taken aback by Sunway's aggressive foray into the special economic zone.

'We are positively surprised by the size of the land,' CIMB said in a report yesterday, noting that the plot in question is the biggest for property development in Medini to-date.

Another broker, Hwang DBS-Vickers, noted its prime location 'at the southern-most tip' of the node. With infrastructure mostly in place, it will take only five to 10 minutes to drive to the Second Link.

This makes its RM25 psf cost even more impressive, observed Hwang analyst Chong Tjen San, especially when compared to recent land deals of RM38-RM65 psf. 'In our view, GIC's 12 per cent stake in Sunway helped consummate this landmark deal,' he said.

Seen more as a partner now, GIC became a shareholder in the wake of the Asian financial crisis of 1997-98 when Sunway founder Jeffrey Cheah sold equity to raise cash. Mr Cheah remains the biggest shareholder, holding nearly 48 per cent.

Already established in the central and northern regions of peninsular Malaysia, Sunway's entry into the Medini zone - albeit in joint venture with Malaysian sovereign wealth fund Khazanah Nasional - will strengthen its presence in the south.

Moreover, its partnership with both GIC and Khazanah could prove advantageous to its planned mixed development. To be completed over 10 years with 65 per cent residential and 35 per cent commercial components, the project has an estimated gross development value of RM12 billion.

Mr Chong believes the implied pricing of RM400 psf for the residential portion - and some 15-20 per cent higher for the commercial portion - is conservative given its prime location. If earmarked as 'an internationally recognised low-density development with a plot ratio of 1x', it would amount to only a fifth of similar developments in Singapore.

Moreover, UEM Land's recent luxury condo sales saw much higher average prices of more than RM700 psf.

However, Sunway Iskandar is not without risks. The increasing number of developments in Medini - as well as in other parts of Iskandar - is a cause for some concern.

Sunway Iskandar would be located next to a RM3 billion wellness township mixed development on 210 acres at Medini Central by E&O, in joint venture with Khazanah and Temasek Holdings.

RHB Research also observed that the high-end projects would start at about the same time - end-2012 or early 2013 - and aim for the same target market - mainly foreign buyers. Competition will also come in the form of other Malaysian builders in Medini, including UEM Land, WCT and Bina Puri.

Under the deal with Khazanah, Sunway will own an initial 38 per cent of the joint venture company and by additional equity subscriptions increase its stake to 60 per cent in 54 months.

Iskandar Malaysia beats investment target: Najib

Key announcements to come after he meets PM Lee Hsien Loong next month

By MALMINDERJIT SINGH
IN NUSAJAYA, MALAYSIA

MALAYSIAN Prime Minister Najib Razak yesterday announced that the cumulative committed investment into Iskandar Malaysia has reached RM77.8 billion (S$31.9 billion), surpassing its initial five-year target, of RM47 billion by more than 60 per cent.

Mr Najib: Even though 'the prospects for the Iskandar region look brighter than ever', closer links with Singapore could maximise these opportunities for entire region

'So much has been achieved in so short a time, with Iskandar Malaysia already driving the development of a thriving modern metropolis in this southern part of Johor,' said Mr Najib. He was speaking at the fifth anniversary celebrations of Iskandar Malaysia, where he spent the day touring developments in the economic region as well as launching its Five-Year Progress Report.

Ismail Ibrahim, chief executive of Iskandar Regional Development Authority (IRDA), provided a more detailed breakdown of the investments into Iskandar Malaysia. 'Of the total committed investments for the first phase, 59 per cent were domestic investment while foreign direct investment (FDI) made up the remaining 41 per cent, making for a healthy mix of sources of funds.'

According to Mr Ismail, about RM38 billion of the total committed investments have already been actualised and the private sector has played a major role in raising all investments thus far. 'Out of the total cumulative committed investments of RM77.8 billion to date, only RM6.3 billion are funds provided by the government of Malaysia, to fund the development and enhancement of critical enabling infrastructure in Iskandar Malaysia.'

However, he added that the Malaysian government's investment in the region has helped attract more private investments, translating into a ratio of one to 11. 'For every RM1 that the government invests in Iskandar Malaysia, it helps to bring in RM11 of private investment.'

Reflecting this interest from the private sector, 12 new investment commitments were announced yesterday, including a RM100 million agreement with Singapore-based Raffles Campus to develop an international school in Iskandar Malaysia.

While noting the additional 'RM1.73 billion to the current total of RM77.8 billion' these new projects have generated, Mr Najib announced that additional 'RM1.05 billion in projected investments would be generated from the knowledge-economy over the next seven years', as a key pillar of Malaysia's Economic Transformation Programme.

Mr Najib was confident that the private sector participation, domestically and overseas, would allow 'Iskandar Malaysia to continue to thrive' even if growth in this part of the world was set to slow due to the current global economic uncertainties.

'Despite being cautious and preparing ourselves for contingencies, we expect the Malaysian economy to continue growing at a robust 5 per cent in the coming year.'

One of the key strategic imperatives provided in the Five-Year Progress Report to underpin the continued robust growth of the Iskandar Malaysia development over the next five-years and beyond is closer relations with Singapore.

The report said that there was a need to target investors from Singapore and focus on strengthening Iskandar Malaysia-Singapore partnerships in identified growth sectors that can bring mutual benefit so as to attract more capital.

Mr Najib noted this as he said that even though 'the prospects for the Iskandar region look brighter than ever', closer links with Singapore could maximise these opportunities for the entire region. 'Further improvements in links between JB (Johor Bahru) and Singapore will also help create a mutually beneficial economic unit - for in today's increasingly urbanised world, competition is between regions as much as it between countries, and regions must work hard to make themselves truly competitive on a global scale.'

Mr Najib added that due to the strategic location of Iskandar Malaysia, 'there is synergistic complementarity between Iskandar and Singapore' and therefore it makes sense for the two to collaborate in mutually beneficial projects.

He stopped short of identifying these projects and said that these will be announced in January next year when he meets Singapore Prime Minister Lee Hsien Loong for bilateral consultations as there were 'significant announcements to be made then' and he 'did not want to take the shine off them' by talking about them now.

Mr Najib did however say that the resolution of the POA (Points of Agreement) impasse between both countries last year has cleared the way for closer cooperation and that he will be looking to update on initiatives to improve connectivity between Iskandar and Singapore, as well as on an iconic project between both sides in the communique issued when both leaders meet.

Peter Lim raises $2b toast to healthcare in JB

Investor strikes deal with Johor royal family to develop medical hub, mall

By LYNN KAN

(SINGAPORE) He has zipped from football clubs to sports cars and now, back to hospital beds once again.

Singapore billionaire investor Peter Lim has inked a $2 billion deal with the Johor royal family to transform a 10-hectare waterfront site in Johor Bahru, Malaysia into a medical hub and marina city.

The mooted Bandar Johor Bahru project is Mr Lim's second healthcare investment within a year. He picked up Singapore's Thomson Medical Centre in January for a cool $513 million, buying out the Cheng family owners.

And a few months before that, he grabbed hold of 32.6 per cent of Malaysia-listed fertility firm TMC Life Sciences.

While Singapore's former 'remisier king' has clearly been drawn to clinical linoleum floors, the 58-year-old has also shown a racier streak in his investment proclivities.

There was his £320 million (S$659 million) offer for debt-laden Liverpool Football Club in October 2010, which was upstaged by the owners of the Boston Red Sox baseball team.

But that was an itch he quickly scratched. In August this year, Mr Lim snapped up a stake in British sportscar maker, McLaren Automotive, for an undisclosed amount rumoured to be about US$200 million.

Despite the rough-and-tumble of the sportive chase, Mr Lim has eventually been led back to the more stately world of health care. He has previously said that he would spend about $400 million on healthcare acquisitions in Asia.

Mr Lim's latest deal includes a 200-bed hospital and other healthcare facilities specialising in treating chronic and lifestyle diseases which afflict increasing numbers of Malaysians and Singaporeans.

But a hub would not be complete without a mega shopping mall, service apartments and a fully secured car park - amenities which take care of the needs of the patient's visitors.

Bestblend Sdn Bhd, a joint venture company owned 70 per cent by Mr Lim and 30 per cent by the Johor royal family, will oversee the development and operations of the medical hub, the project's first phase.

Bestblend director Koh Kim Huat estimates that this first phase would take between three and five years, with the hospital's construction the foremost priority.

Crucial to the project is Thomson Medical Centre, Mr Lim's new feather in his cap.

Its consultancy and management arm, Thomson International Health Services, will manage the completed hospital.

'The medical hub in Malaysia will combine the experience and expertise of the management in Singapore with the lower costs in Malaysia,' Mr Koh told BT.

Details about the cost breakdown are still being ironed out, but Mr Koh estimates the hospital construction bill alone to be about $200 million.

The hospital would offer a 'comprehensive' suite of services such as obstetrics and gynaecology - Thomson Medical Centre's main expertise - orthopaedics, and ophthalmology.

And while the hospital will be mostly privately run, there are plans for a part of it to be a hybrid 'public-private' collaboration, where public medical specialists get to practise there part time.

It will not be a Malaysian-only hospital. Singaporeans could also potentially use it since rules were loosened last year allowing Singaporeans to use their Medisave to pay for elective hospitalisation overseas.

That means that the upcoming hospital would have to secure the necessary approvals.

'Singaporean patients going for treatment or buying medication in Malaysia will save a lot, as many drugs and services are about half the price,' said Mr Koh. 'Healthcare costs in Singapore can only go up and not down. It's a no-brainer.'

The hospital's convenient location is also another plus. The hub is a short drive across the Causeway and is near to Johor's Royal Customs, Immigration and Quarantine Complex.

There are few execution risks to the project, said Mr Koh. Bestblend has already purchased the land, and what remains is implementing the conceptualised plans.

Mr Lim's long-time friendship with the sultan of Johor led to the deal, so the royal family's influence will help get the project off the ground.

Funding - with Mr Lim's estimated wealth at US$1.7 billion and his financial clout and contacts - is also unlikely to be an issue.

It is the global economic turmoil that will throw the wrench in the proverbial wheel.

'If the whole world economy goes into limbo, no one will know what will happen tomorrow,' said Mr Koh. 'If that happens, maybe we'll grow a bit slower . . . When people's pockets are tight, and things are bad, and people lose their jobs, medical decisions get postponed. That will affect the timeline (of the project), that is all.'

Pinewood M'sia to be ready by May 2013

By PAULINE NG

IN KUALA LUMPUR

FOLLOWING a delay of more than a year, RM309 million (S$125 million) integrated media studios facility Pinewood Iskandar Malaysia Studios will be completed by May 2013.

In a filing to the stock exchange yesterday, construction company Sunway Bhd said one of its wholly- owned units, Sunway Construction Sdn Bhd, had accepted the letter of award for the building of the integrated media studios facility in Johor over a 19-month construction period. The target completion for the project is May 10, 2013.

Under a strategic agreement entered into with Pinewood Shepperton plc in December 2009, Khazanah Nasional will develop the studios which will provide more than 100,000 square feet of film stages ranging from 12,000-30,000 sq ft, and nearly 60,000 sq ft of TV studios, a number of offices, workshops and post- production facilities.

Then, the UK company had said the new studios would provide it with 'a presence in the heart of Asia'. 'Malaysia's excellent digital connections, low- cost base and proximity to Singapore mean that Pinewood Malaysia Studios will be ideally placed as the creative hub of the region.'

CEO Ivan Dunleavy had also observed the new studios would allow the company, which will get consultancy and brand licence fees for sales and marketing services, 'to build a meaningful new revenue stream, exploiting our expertise and brand internationally'.

In any event, the Malaysian sovereign fund views the creative sector as having the potential to move employment up the value chain and is one of six service-based areas accorded tax and employment incentives by the government to attract companies to set up in the special economic zone. The other services areas are education, financial advisory and consulting, healthcare, logistics, and tourism.

Even so, only a handful of companies have responded, most preferring to wait and watch Iskandar's development before committing.

Since its launch in the last quarter of 2006, the development of the zone (which stretches over some 2,200 sq km) has been slower than anticipated, in part because of the 2008 Dubai financial crisis. Pinewood Iskandar, for example, was initially scheduled to be completed by end-2012.

Malaysia's natural attractions - tropical rainforests, mountains and beaches - will offer film locations that are very different from Pinewood's five other studios in the UK, Canada, Dominican Republic, Los Angeles and Germany.

But animation is another area of interest and it received a boost from the recent nomination of Saladin for an award at the Emmys. Nearly all the production crew in the 13-part TV series - co-produced by government agency Multimedia Development Corporation and Qatar's Al-Jazeera Children's Channel - were Malaysians.

http://www.businesstimes.com.sg/sub/news/story/0,4574,460057-1318535940,00.html?

Sunway Construction seals RM308mil Iskandar Malaysia Studios deal

KUALA LUMPUR: Sunway Construction Sdn Bhd (SunCon), a unit of Sunway Holdings Sdn Bhd, has secured a RM308.9 million contract from Iskandar Malaysia Studios Sdn Bhd to build an integrated media studios facility in Pulai, Johor, said Sunway.

The project, known as Pinewood Iskandar Malaysia Studios, comprises a TV block (two TV studios and two scene docks), a film block (five film studios), and an annex block consisting of a viewing theatre, a VIP cade and an audience holding area.

It will also have a production block (film studio annex which includes offices, post-production services, dressing room and wardrobe store), a technical block, a workshop block (11 workshops and associated office), a central energy plan block, and an ancillary building (guard house, pyrotechnic store, one block refuse chamber, staff carparks and 4.05ha backlot for filming).

The project is expected to be fully completed on or by May 10, 2013 and will contribute positively to the earnings of the group for the year ending Dec 31, 2012 onwards, said Sunway in a filing to Bursa Malaysia here. - Bernama

Study to identify suitable rail link between JB and Singapore

PETALING JAYA: A six-month study is being done to identify the most suitable rapid transit system link between Johor Baru and Singapore.

This was in line with the agreement made between the governments of Malaysia and Singapore when Keretapi Tanah Melayu moved out of Tanjung Pagar in Singapore on June 30, said Transport Minister Datuk Seri Kong Cho Ha.

“We are doing a joint study on where the crossings should be and what type – whether underground tunnel or above ground on a bridge or something else,” he said at a press conference after the handover of a mobility van by the Japanese Embassy to the Damai Disabled Persons Association yesterday.

Kong said that on the Malaysian side, the station would be located at Johor Baru Sentral because the Customs, Immigration and Quarantine facilities were available there.

He said the rail transit system would reduce congestion on the road as thousands of Malaysians travel to Singapore each day by bus, taxi, motorcycle and car.

The Straits Times reported that Malaysia and Singapore were seeking a consultant to undertake an engineering study for a rapid transit system linking the two countries.

Singapore’s Transport Minister Lui Tuck Yew who visited Kong on Tuesday said both countries would invite tenders at the same time and a joint Malaysian-Singapore team would evaluate and pick one company.

Earlier, Kong expressed concern over the rising number of people who become disabled due to road accidents.

The ministry donated RM10,000 to the association while the Japanese Embassy deputy chief of mission Koichi Ito handed over a mock cheque for RM145,516.

Koichi hoped the mobility van could be used for the disabled to have access to more job opportunities and to make their travels easier.

He also said the grant was approved for the association on March 11, just before the tsunami hit Japan.

Koichi said the Japanese were grateful for the sympathies and the assistance Malaysians had offered to tsunami victims.

S'pore, M'sia to call a tender for Rapid Transit System

Engineering firms from both countries can participate

SINGAPORE and Malaysia will soon call a tender for the Rapid Transit System (RTS) which will connect Johor Bahru and the island republic.

On a one-day introductory visit to Malaysia yesterday, Singapore Transport Minister Lui Tuck Yew said that engineering companies from both sides of the Causeway will be invited to participate in the tender. According to media reports, RAdm Lui, who is also Second Minister for Foreign Affairs, said that the rapid transit project was 'on time and on track', and that a tender for engineering studies will be called in the fourth quarter of this year.

'The preparatory work has almost been done (and) a tender will be put out in both Malaysia and Singapore. We'll have a joint team to evaluate this and select a consultant.'

RAdm Lui said that the study will be done in two phases. The first phase involves picking an engineering consultant to look into all options available for the construction of the system, and advise both countries on difficulties and challenges under each option. This will take 11 months.

The joint management committee will then decide which option to go for before the second phase begins. 'Because of such complexities, it will take another 18 months thereafter once we decide on the option,' RAdm Lui was quoted by Channel NewsAsia as saying.

RAdm Lui's visit follows a series of introductory visits to Malaysia by Singapore cabinet ministers in recent weeks. During the visit, he met with his Malaysian counterpart Kong Cho Ha at the Transport Ministry in Putrajaya. Mr Kong said that Malaysia prefers the RTS to be linked to Singapore via an undersea tunnel, which will free up space above the sea for other activities. Ultimately, however, the decision will depend on the outcome of the study, he said.

A place in the Iskandar sun for SMEs

Special business park in region will cater to their needs

By CHEN HUIFEN

(SINGAPORE) Start-ups and SMEs will have a place in Iskandar Development Region's flagship Medini region alongside the bigger boys who are picking up their choice plots of land across the Causeway.

Small is big: Iskandar's SME business park will give attention to those which may not have the resources or need to have their own buildings

There will be a business park dedicated to Small and Medium Enterprises (SMEs) that may not have the resources or need to have their own buildings and the master planner is looking for partners to get the project going.

'When you actually sit down and speak to the SMEs, you quickly realise that not many have the finance and the resources to come and buy their plot from us and build their own building,' said Keith Martin, CEO of Global Capital & Development (GCD), which holds the concession to develop Medini.

'So what we are trying to do now is seek investor-developer partners to set up SME business parks. So we're actually facilitating the provision of SME business space.'

Medini is one of the five zones within the Iskandar Development Region. It rests between the Straits of Johor in the south and Horizon Hills in the north. The area has already drawn investment commitments from some of the bigger firms, including Raffles Education Corp, Management Development Institute of Singapore, Parkway Holdings and Europe's Pinewood Studios Group.

The SME business park will sit in the Medini Business District, one of four development projects in the Medini region. To illustrate that the area will be flexible to the needs of the users, Mr Martin pointed to one of the complexes, which will have two office blocks connected by a large corridor that is naturally ventilated. Units within the block will be modularly built to provide greater flexibility in the sizes required by different types of SMEs. GCD is looking for commercial space operators and investors, and is casting its net in the region as well as the US and Europe.

Mr Martin thinks there will be interest because of the real demand that will be driven by anchor investors, such as Pinewood Studios Group. The TV and film production company, which is behind works such as James Bond, Harry Potter, Batman and Superman, has committed to invest RM400 million ($165 million) in Medini by 2013. The presence of Pinewood Iskandar Malaysia Studios, projected to create 3,000 jobs, is expected to draw complementary services providers including the likes of creative designers, costume makers, audio professionals and stylists.

SMEs involved in the media industry will see the opportunities to have a presence alongside Pinewood Studios, reckoned Mr Martin. But the business park could also be relevant to those engaged in high technology, research, product development, business processing, telecommunications, call centres and data centres.

'We're looking more for the service-oriented SMEs,' he added.

GCD is promoting Medini as a node for companies looking for a dual platform: one in Medini and the other in Singapore or Kuala Lumpur. Mr Martin noted that in the past, Singapore firms have largely expanded their operations further afield to places such as China, India, Vietnam, Laos and Thailand because there did not exist an option such as Medini.

He said: 'So I think we'll see a significant change in the SME mindset because they can see now that this platform exists just across the Causeway, without having to overstretch themselves by going a step too far, possibly in some examples like India or China. Of course there have been some success stories in those expansion ... but generally, wouldn't it just be easier to drive across the Causeway to see and visit your factory, or your SME that is expanding?'

Medini is also a focal point for joint development by Khazanah Nasional and Temasek Holdings. The two sovereign wealth funds from Malaysia and Singapore are joining hands in co-developing two plots of land in the Medini Lifestyle and Medini Living zones.

Raffles Edu unit buying JB land for RM76.5m

By NISHA RAMCHANDANI

RAFFLES Education Corp's subsidiary, Raffles K12, has accepted a letter of offer to acquire a piece of land in Johor Baru for some RM76.5 million (S$31.2 million) in its bid to expand into the international school business.

'In line with the company's expansion plans and strategic directions to expand into the international school business, the company intends to acquire the land to construct and develop an American system school in Johor Baru, Malaysia, catering to students from Kindergarten to Year 12,' Raffles Education said in a filing to the Singapore Exchange.

The land, which spans about 46.22 acres (18.7ha), is being transferred to vendor Education@Iskandar. The land is currently registered in the name of Iskandar Investment, Education@Iskandar's holding company.

The acquisition will be funded through a combination of bank borrowings and internal resources. A deposit of about RM1.53 million - or 2 per cent of the purchase price - is payable to Education@Iskandar on acceptance of the offer letter.

When the sale and purchase agreement is executed, a balance deposit of around RM6.12 million or 8 per cent of the purchase price is payable. The total amount is to be paid over five years from the date of the agreement.

According to the offer letter, the proposed acquisition is dependent on two terms - that a sale and purchase agreement is executed within 90 days from the date of acceptance of the offer letter or such other date agreed upon in writing between the parties as well as the successful transfer and registration of the land to Education@Iskandar.

More foreign firms plan to invest in BioXCell @ Nusajaya

JOHOR BARU: Malaysian Biotechnology Corp (BiotechCorp) says five more foreign biotechnology companies are planning to invest millions of ringgit at BioXCell @ Nusajaya.

Chief executive officer Datuk Dr Mohd Nazlee Kamal said the investments in the custom-built technology park in Iskandar Malaysia would be realised within the next few years.

He said the five biotechnology companies coming to Nusajaya were from India, France, South Korea and the United States.

Datuk Dr Mohd Nazlee Kaal

“The development of facilities at BioXCell and the investments from companies in the biotech park will add up to RM10bil,'' Dr Mohd Nazlee said on Saturday.

BioXCell, a biotech park on 32.37ha in the Southern Industrial and Logistics Clusters (SiLC), is being developed by Malaysian BioXCell Sdn Bhd.

UEM Land Holdings Bhd holds 40% equity in Malaysian BioXCell with the remaining 60% held by Biotech Corp the former is the developer of the 526.10ha SiLC in Nusajaya, which is being developed as a clean and green industrial park in Iskandar.

Dr Mohd Nazlee said this at the project commencement for the first high-end biopharmaceutical manufacturing and research and development (R&D) facility by India's Biocon Ltd in BioXCell.

Johor Mentri Besar Datuk Abdul Ghani Othman unveiled a plaque to commemorate Biocon's RM500mil facility. Also present was Biocon chairman and managing director Kiran Mazumdar-Shaw.

Dr Mohd Nazlee said the development of the biotechnology park was progressing well and with Biocon's investment, more biotech companies, especially from India, were likely to follow suit.

He said BioXCell would create more job opportunities for locals.

“We are targeting to create about 300,000 jobs in the country's biotechnology industry by the end of 2012. As of to date, we have created 14,000 knowledge-based workers,'' he said.

Meanwhile, Kiran said apart from Malaysia, other countries including Singapore, Thailand, South Korea and United Arab Emirates were also keen to attract investments from Biocon.

She said the company preferred to invest in Malaysia due to the country's cost competitiveness.

“The Johor plant will be operational by 2014, catering for the global requirements of our range of Biosimilar insulin and insulin analogs for diabetes treatment being commercialised by Pfizer Inc,'' she said.

Kiran said the plant would focus on R&D and the production of other biopharmaceuticals products at a later stage.

Bangalore-based Biocon was established in 1978 and is the biggest biotech firm in Asia. It has evolved from an enzyme company to a fully integrated biopharmaceutical enterprise, focusing on healthcare.

US-based Solexel to invest RM2.8bil in Malaysia

PUTRAJAYA: Silicon Valley-based solar photovoltaic (PV) cell manufacturer Solexel Inc plans to invest RM2.8bil over the next five years in a plant in Senai Hi-Tech Park, Iskandar Malaysia.

The facility would be built on a 100-acre site and would have a targeted production capacity of 1GW of solar PV cells a year, said Solexel president and chief executive Michael Wingert.

“The plant is expected to generate export revenue of more than RM3bil per year and we are keen to contribute to the development of a domestic market for solar PV cells,” he said at the signing of a memorandum of understanding (MoU) between Solexel Malaysia and Senai High Tech Park Sdn Bhd (SHTP) yesterday.

Construction will start in the first quarter next year and the plant is scheduled to begin production at the end of 2013. Its output will be exported mainly to Europe and the United States.

Wingert (left) presenting a souvenir to Najib. With them are Mukhriz (second from left) and Abdul Ghani.

Wingert said this would be Solexel's first overseas venture. It will operate in Malaysia via wholly-owned subsidiary Solexel (M) Sdn Bhd.

“We have reviewed a number of locations in Malaysia and decided on Senai Hi-Tech Park because of its proximity to a significant sea port and airport, as well as the availability of additional land for the construction of a supply infrastructure to Solexel,” Wingert said.

At full capacity, the plant will employ 2,300 people.

“Through our spending, job creations and transfer of know-how, we expect to strongly boost Malaysia's high-technology and clean energy economy,” he added.

SHTP chief executive Datuk Ahmad Shukri Tajuddin said Solexel's investment would “provide huge economic multiplier effects to the whole of Iskandar Malaysia region”.

The MoU signing was witnessed by Prime Minister Datuk Seri Najib Tun Razak, Deputy International Trade and Industry Minister Datuk Mukhriz Tun Mahathir and Johor Mentri Besar Datuk Abdul Ghani Othman.

Mukhriz said many solar PV cell manufacturers had set up plants in Malaysia, opening up opportunities for foreign and local investors to develop a solar cluster.

“Some of the manufacturers in Kulim Hi-Tech Park and Selangor Science Park II have even started exporting their thin-film solar cells,” he said.

“The Solexel venture will be a major boost for the economy and proves that our efforts to attract foreign direct investments, especially in the solar industry, continues to bear fruit,” he added.

Mukhriz said that as at June this year, the total investments approved for solar PV industry were RM15.8bil, of which RM1.1bil came from domestic investors.

“Revenues for the companies in the industry are forecast to be RM10bil for the next three years,” he said.

The industry now has 23 approved projects, of which 19 are in active planning.

Mukhriz added that Johor was turning out to be the state with the highest number of investments this year.

From January to June, Johor attracted investments totalling RM4.52bil, excluding oil and gas as well as the Solexel investment.

http://biz.thestar.com.my/news/story.asp?file=/2011/8/24/business/9355429&sec=business