Industry booms in Sarawak

PUBLISHED : Sunday, 13 March, 1994, 12:00am
UPDATED : Sunday, 13 March, 1994, 12:00am

MALAYSIA'S Sarawak state, situated on the northern coast of Borneo island, is still largely dependent on its timber sales despite cutting down its export volume.

According to a local newspaper report, this was mainly because of the higher international price of sawn logs.

Although export volume shrank 33 per cent to 2.26 million cubic metres in the first quarter of last year, earnings from the logs surged due to spiralling sawn-log prices, which increased to HK$318 per cubic metre.

Sixty-eight per cent of the logs were exported to Japan, while the other two leading buyers, Taiwan and South Korea, each absorbed 11 per cent.

Sarawak, which is the largest of the 13 states in the Federation of Malaysia, gained its independence through the formation of Malaysia in 1963, seven years after the initial independence and the foundation of the Federation of Malaya in 1957.

During the past 30 years, Sarawak has made astonishing strides - growing from a small state with only a few roads and almost no industry - into a modern diversified industrialised economy.

Today, there are excellent ports such as Pending, outside Kuching, and Bintulu, which are regularly serviced by international shipping lines connecting the state to Singapore, Port Kelang and even Japan's Yokohama.

The main source of revenue of the state, which has a population of under two million people, has been logging and forestry for many years.

As the state was aware that the agricultural sector of its economy would decline, it decided to find alternative sources of employment and economic activity.

The state then began encouraging downstream processing of timber to put a stop to the loss of potential downstream revenue and to increase employment. This resulted in factories springing up at Kuala Bram Industrial Estate outside the northern town of Miri and Tanjung Manis Timber Processing Zone outside Sibu.

Now, these factories are producing sawn timber, veneer, plywood, block board, mouldings and furniture.

Though criticism has been levelled by some environmental agencies at the state about its logging activities, the state government has denied it ever practised clear felling. It was only involved in selective logging.

In the coastal town of Bintulu, more than M$11 billion has been invested in some of the richest oil and gas reserves in Asia. Two Liquefied Natural Gas plants have also been built at a cost of over M$9 billion in the Bintulu Growth Centre.

The state government has also built up downstream facilities to produce ammonia, urea, as well as synthetic oil products, such as petrol and wax.

On the other hand, Sarawak has made good progress in commercial large-scale agriculture and plantation crop cultivation of cash crops such as pepper, cocoa, rubber sago and even apples. The total amount exported in 1991 was M$252.9 million.

Sarawak has been quite successful in attracting multinationals such as Japan's Marubeni and Mitsubishi Corp, Britain's Shell Petroleum and Shell Gas as well as less well known corporations such as Toko Electronics from Japan and Yeo Hiap Seng from Singapore.