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DPM rules out Umno entering <b>Sarawak</b> - The Borneo Post Online Berita Sarawak - News 2 Sarawak

DPM rules out Umno entering <b>Sarawak</b> - The Borneo Post Online

Posted: 13 Feb 2014 11:42 AM PST

by Lim How Pimreporters@theborneopost.com. Posted on February 14, 2014, Friday

KUCHING: Deputy Prime Minister Tan Sri Muhyiddin Yassin yesterday said he did not see the need for Umno to spread its wings to Sarawak given that PBB had done a good job.

Muhyiddin, also deputy president of Umno, opined the political structure of Sarawak Barisan Nasional (BN) remained strong and stable while PBB had achieved what Umno wanted for Sarawak.

"PBB has become the stronghold of BN in Sarawak while other component parties all rally behind it. PBB plays a role in Sarawak as important as that of Umno in Peninsular Malaysia.

"Most important, not only the party's success matters but also the objectives that have been achieved. PBB has achieved what we want to achieve in Sarawak, which include unity, progress, stability and prosperity," he told a press conference after a closed-door dialogue with consumers, hawkers, traders and suppliers at a hotel here.

Muhyiddin, however, did not affirmatively state that Umno would stay out of the state.

To a question, he said his earlier meeting with state BN leaders did not specifically touch on the 11th Sarawak state election.

"To my knowledge, the current term expires in June 2016. What is more important is to take steps to ensure Sarawak remains a fixed deposit state of Barisan Nasional.

"I hope the people of Sarawak will continue to give strong support to the new leadership."

On the dialogue, Muhyiddin said sound suggestions had been put forward by several individuals during the one-and-a-half hour meeting.

He pledged to look into all proposals and ideas to help Sarawakians cushion the impact of higher cost of living.

"I have been to a local market where people offered direct feedback. They say the prices are reasonable amidst the rising cost of living. Nevertheless, we will ensure people of Sarawak will not be severely affected by it."

He added the government would see to it that more initiatives be launched to reach out to the low-income and needy group.

Among which, he said, the government could consider running more Kedai Rakyat 1Malaysia (KR1M) outlets in the state to offer essential items at a reasonable rate.

Deputy Chief Minister Datuk Patinggi Tan Sri Alfred Jabu and Works Minister Datuk Fadillah Yusof were among those present.

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Standing firm against palm oil boycott threat - The Borneo Post Online

Posted: 14 Feb 2014 11:03 AM PST

by Lian Cheng, reporters@theborneopost.com. Posted on February 15, 2014, Saturday

KUCHING: Wilmar International Ltd (Wilmar), the biggest single buyer of crude palm oil (CPO) produced in the state has given a notice that it will stop buying oil produced from palms planted in areas of 'high carbon stock' and peat swamp after 2015.

This development has raised the ire of Tan Sri Dr James Masing the Minister of Land Development whose ministry received the notice through a letter from the company dated Dec 5 last year.

Likening the threat to economic bullying, Masing said Sarawak would not bow to international pressure in its rural poverty eradication efforts which depended heavily on the palm oil industry.

"This directive from Wilmar has very disastrous effect on us because it could stop our programme on eradication of poverty," said Masing at a press conference held at his office yesterday.

Wilmar, a multinational company based in Singapore has set up a palm oil refinery in Bintulu more than 10 years ago. It absorbs more than 45 per cent of the total state CPO production (1.4 million tonne of CPO) and is the main buyer of 41 palm oil mills across the state.

Despite the obvious adverse impact on the palm oil industry in the state, Masing said Sarawak would stand firm in its commitment to raise the income and living standard of the rural people through the development of the palm oil industry.

He explained that "high carbon stock" areas cover primary forest, logged forest, secondary forest, forest cleared for shifting cultivation and peat swamp.

It has been the state's policy to preserve primary forest as it only allowed logged forest and secondary forest to be cleared for oil palm planting.

Wilmar's boycott of oil palm planted on high carbon stock would mean stopping oil palm cultivation in the state as all the 1.6 million hectares of oil palm planted in the state are either planted on cleared logged or secondary forest or peat swamp.

"We have no areas where there is no forest, if you want to plant oil palm where there is no forest, you will have to go to the Sahara Desert," he quipped.

Masing disclosed that in 2012, state sales tax derived from palm oil production was RM425.2 million which was 10.8 per cent of total revenue for Sarawak. In the same year, Sarawak's CPO generated RM8.4 billion in export value for Malaysia.

He added there were 17,578 oil palm smallholders in the rural areas of the state and based on the CPO average price of RM458 per tonne per fresh fruit bunch (FFB), these smallholders earned over RM300 million a year.

Stopping oil palm planting in the state would directly affect about 300,000 people in the rural areas while a far bigger number would be deprived of the spin-offs of the industry and indirectly affected he pointed out.

"On this issue, we will not negotiate with anybody how to do it (eradication of poverty in rural area). The lifestyle of the people of rural area is not up for negotiation with the international community. We will not compromise the method of how we should improve the life of people in Sarawak," said Masing.

He said the environmental argument put forth by the company did not hold water as oil palm could only be planted after forests had been cleared and Sarawak had been very cautious in conserving its environment and there was even a department to look after state's peat land.

"I have a feeling that they (Wilmar) are influenced by their buyers and some of them from Europe. Through NGOs, they (Europe countries) use all kinds of excuses to stop us from growing oil palm but our economy is not up for negotiation," said Masing.

Describing Wilmar's decision as a "bullying tactic", the Balleh Assemblyman believed that the decision was the result of economic rivalry as oil palm had been a more effective producer of edible oil than either soybean or sunflower seeds.

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Dr M praises Taib for having served <b>Sarawak</b> well – BorneoPost <b>...</b>

Posted: 10 Feb 2014 10:19 AM PST

PUTRAJAYA: Former Prime Minister Tun Dr Mahathir Mohamad yesterday praised outgoing Sarawak Chief Minister Pehin Sri Abdul Taib Mahmud for having provided excellent service to enable the Barisan Nasional (BN) administer the state for a long time.

He said Sarawak under the leadership of Taib had garnered the strong support of the people and had won many elections.

He also said that Parti Pesaka Bumiputera Bersatu (PBB), as the principal partner of the Sarawak BN, had made the coalition strong and more united and contributed much to the state through various development projects.

Dr Mahathir said that any leader who was advanced in age would have to step down to give others a chance to lead.

"I hope the successor (of Taib) will get the support that he has received so far and there will be no enmity among the potential successors," he said after solo cyclist Wan Hashim Wan Mahmood, 68, called on him at the Perdana Leadership Foundation, here. Wan Hashim launched his mission on Jan 26 to cycle solo around peninsular Malaysia.

Taib, 78, who is PBB president and Sarawak BN chairman, had announced that he was stepping down soon as the chief minister, a post he has held since 1981.

Speculation is rife that Taib will step down by the end of this month and be appointed the next Yang Dipertua Negeri of Sarawak.

Replying to a question, Dr Mahathir said Taib's departure as the chief minister would have an effect on PBB but added that he felt that the party would continue to excel, given the strong unity it possessed.

"I feel PBB is strong. We have to also take the party into account. The party has served Sarawak well; much development was implemented by the party under Abdul Taib Mahmud. I am confident his successor will also be able to do the same," he said.

In Kuching, former PBB publicity chief Datuk Peter Minos said Taib would surely select as his successor someone who would be able to continue to maintain unity in the party and state BN.

Taib would also like to see his successor able to lead the many races in the state to live in unity and harmony, safeguard Sarawak's basic interests to the best of his ability and maintain Sarawak's autonomy within Malaysia.

"Definitely, he also wants someone who can keep up the good work done so far in the social and economic sectors, if not better it.

"We will miss Abdul Taib for all the good things he has done for the state and its people.

"Whatever critics and cynics say, Abdul Taib has truly done his best in keeping Sarawak safe, stable, peaceful and progressive," he said. — Bernama

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Meet growing public transport needs - The Borneo Post Online

Posted: 11 Feb 2014 11:00 AM PST

by Johnson K Saai, reporters@theborneopost.com. Posted on February 12, 2014, Wednesday

Chief Minister says town planning must take into account increasing mobility of people as Sarawak prospers

KUCHING: As the state develops, the mobility of its people is bound to increase and the transport system must keep pace with the growing need of commuters.

Chief Minister Pehin Sri Abdul Taib Mahmud said as Sarawak prospered, its people were likely to move around more and demand more conveniences in their movement.

Speaking at the official opening of Kuching Sentral Regional Bus Terminal, a project spearheaded by Permodalan Assar Sdn Bhd (PASB), here yesterday Taib pointed out that it was vital that cities and towns be planned with good and proper transport system to ensure better mobility for the people.

"That is the challenge for every city today because the more prosperous you are the more you need to look into your development plan with greater care and foresight.

"Because of this, a central planning for every town in the country must be gradually built up so that a prosperous Sarawak also means that the people can be mobile all the time with convenience,"

He praised PASB for incorporating the state government's aspirations for the common people in their design of the terminal and make their lives more pleasant amidst the hectic activities of the state's thriving economy.

"As we are growing and getting more prosperous, whatever we do must have proper system. This is what we have to give all the time and this system ought to be understood from top to bottom.

"That is why we have tertiary education….we want our people to be more educated so that they will know how to use their prosperity in a more convenient way. That is the way of modern Sarawak and modern Malaysia," he said.

Taib commended the developer of Kuching Sentral because the terminal provided seamless integration of public facility, comfort and safety of visitors especially the commuters, all under one roof.

"More or less, travellers can get anything that they want, including souvenirs and even medicine that does not require doctor's prescription," he said.

Meanwhile, PASB chairman Tan Sri Bujang Mohd Nor in his welcoming speech revealed that in 2013, the number of passengers recorded at Kuching Sentral was 272,255 passengers compared to 190,335 in the previous year.

According to him, the highest number of passengers recorded at the terminal was during festive seasons like Christmas, Gawai, Hari Raya and Chinese New Year.

He said 14 express bus companies were currently operating from Kuching Sentral including two from Indonesia.

"On average, there are 80 bus trips from Kuching Sentral daily and this figure can go up to 100 trips per day during festive seasons.

"These trips include the North Line; from Kuching to Kota Kinabalu, Sabah and the South Line; from Kuching to Pontianak, Kalimantan, Indonesia," said Bujang.

Among those present at the ceremony yesterday were Taib's wife Puan Sri Raghad Kurdi Taib, Deputy Chief Minister Datuk Patinggi Tan Sri Alfred Jabu Numpang and Welfare, Women and Family Development Minister Datuk Fatimah Abdullah.

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Revving up the auto sector - The Borneo Post Online

Posted: 15 Feb 2014 07:57 AM PST

by Jonathan Wong bizhive@theborneopost.com. Posted on February 15, 2014, Saturday

Malaysia's automotive industry received a fresh injection of incentives from the National Automotive Policy (NAP) recently announced, after two budgets of no-show.

The Malaysian automotive sector has been rather flattish over the years but saw some gradual increase at the end of 2013 due to promotions and backlogs.

This was evident from total industry volume (TIV) which was flat year-on-year at 60,500 units in December 2013, according to statistics released by the Malaysian Automotive Association (MAA).

Nonetheless, the TIV jumped sequentially by 15.8 per cent month on month due in part to the aggressive year-end sales campaigns and together with Christmas and New Year festive promotions by some distributors.

What was interesting was that local player Proton lost its second position to Toyota, a non-national marquee.

The three largest non-national carmakers in December 2013 continued to be Japanese big caps   Toyota, Honda and Nissan.

Toyota bumped up to the second spot overall and remained the largest non-national marquee with 16.8 per cent market share.

The sales of the Japan's largest automaker increased 0.3 per cent at 10,200 units. Honda climbed up to the fourth spot in December 2013, controlling 10.8 per cent of the market.

Nissan dropped to fifth spot in December 2013 with a market share of 7.6 per cent.

NAP impact

With the new NAP set to focus on establishing Malaysia as a regional hub for energy-efficient vehicles (EEVs), the policy is expected to further boost the non-national carmakers' presence in the country and put in place definitive incentives for car and auto part manufacturers to set up facilities in Malaysia.

The previous policy was set to revolve around the initiative to reinvigorate the local auto scene and boost local players but the new policy was set to relax the restrictions imposed on foreign automakers from manufacturing small passenger cars.

To recap, International Trade and Industry Minister, Datuk Seri Mustapa Mohamed, who revealed the NAP stated that the new NAP is set to make Malaysia a regional automotive hub in EEV sector and also transform Malaysia's automotive industry to be one of the important components for the economy.

The NAP 2014 outlines key directions and strategies in preparing the local automotive players towards the liberalisation of the industry. Extensive studies and consultations were carried out with relevant government agencies, industry players and consumers in formulating this policy.

Among the key objectives of the new NAP includes:

a. promote a competitive and sustaibanle domestic automotive uindustry including the national automotive companies.

b. make malaysia the regional automotive hub in EEV

c. promote increase in value added activities in sustabable manner

d. promote increase4 in exports of vehicles and automiotive components

e. promote participation of bumiputera companies in the total value chain of the domestic automotive industry

f. safeguard consumers' interest by offering safer and better quality products at competitive prices.

Becoming a regional EEV hub

Central to the new policy is the aim of making Malaysia the region's main EEV hub.

This particular vision encompasses strategies and measures to strengthen the entire value chain of the local automotive sector and hopefully lead to better environmental conservation, better job creation, greater transfer of technology as well as creation of new economic opportunities for local companies.

Employment was also one of the main contributions of the NAP 2014 with about 550,000 people directly employed in the automotive industry.

With the implementation of the new policy, it is expected that 150,000 more employment opportunities will be created by 2020 and with local (skilled and semi skilled) labour set to replace 80 per cent of foreign workers in the automotive manufacturing sector.

Analysts have made their comments on the matter. For one, AmResearch Sdn Bhd (AmResearch) sensed that the latest NAP is now more outward looking, thrusted by Malaysia's EEV programme, which encompasses a competitive tax incentive structure, a focus on scale creation (previously dragged by inward looking policies), and creation of a competitive export hub.

"These are key reasons why we think that the revised NAP will prove a strategic turning point for the local auto industry, riding on early cycle investments into 'green car' production in Asean."

The new policy is also set to help Malaysia grab new cycle investments by enabling a significantly more robust option for foreign original equiptment manufacturer (OEM) to qualify for 'green car' production tax incentives, says AmResearch.

This was thanks to Malaysia's EEV definition which cuts across all passenger vehicle segments compared to extremely rigid criteria in Thailand (Eco Car programme) and Indonesia (Low Cost Green Car program), which are A-segment centric.

The EEV tax incentives also gives a quantum leap to the current level of localisation-driven excise duty rebate up to 60 per cent incremental savings in excise duty cost from the current base, via a modified Industrial Adjustment Fund (IAF) matching system.

It also boasts a huge spin-off impact as non-EEV models sharing common parts with EEV models might indirectly benefit from ILP-based excise duty rebates.

Increasing foreign investments

The NAP also helps the complete liberalisation of auto manufacturing license for EEV production against the current freeze on the less than 1.8 litre segments and allows massive scale from new capacity to improve price competency of Malaysian auto parts sector, which will eventually benefit national cars which are highly localised.

"Latest developments in our local auto sector have underscored our conviction. For example, Mazda has identified Malaysia as an export base for the CX5 and Mazda 6 while Honda committed to more than double production to 100,000 by 2014-15 from 40,000 with a target localisation rate of more than 70 per cent.

"China's Great Wall has committed to invest RM2 billion into regional production facilities in Malaysia, at indicative volume of 100,000 per annum. Adding to that, Tan Chong is localising its Serena Hybrid by mid-financial year 2014 (FY14), with more new models in its five-year strategic plan, including high volume A/B segments.

"Nissan's production volume to expand from 60,000 to 100,000 by 2015-2016. Negotiations are also ongoing for three more EEV manufacturing licenses to be issued to US, European and Korean marques while on the local front, Perodua is doubling capacity to 400,000 by mid-FY14 via a new state-of-the art plant, well positioned as a B-segment re-export hub for Daihatsu," noted AmResearch.

Based on business plans submitted by various OEMs, Malaysia's total vehicle production (inclusive of exports) is projected to more than double from circa 600,000 to1.3 million by 2020. The current sector's contribution to gross domestic product GDP of 3.5 per cent is targeted to grow to 10 per cent by 2020, equivalent to where Thailand's auto sector stands in its economy.

While volume is smaller than Thailand, the focus of the EEV program is on value of cars produced.

Kenanga Investment Bank Bhd's research arm (Kenanga Research) also shared similar sentiments.

It noted that the NAP as expected, is a comprehensive mix of customised incentives for both foreign direct investment (FDI) and domestic direct investment (DDI) such as Pioneer Status, Investment Tax Allowance, Grants for R&D and training, infrastructure facilitation and expatriates have been included in the policy.

On the duty exemptions, it was spot on for their expectations that the exemption of excise duties and import taxes for CKD EEV will be extended.

Kenanga Research also highlighted that in the policy, MITI has developed a framework namely Car Price Reduction Framework (CPR) for gradual car price reduction (between 20 per cent to 30 per cent) in the next five years.

"Delving deeper, CPR consists of mix measures touching base on import duties reduction (through Malaysia Australia Free Trade Agreement and Malaysia Japan Economic Partnership Agreement), tax exemption of excise duties and import taxes for CKD hybrid and CKD EV, and lower excise duties through value added activities.

"While there is no revision on the excise duties, the government noted that it is open to the possibility of reducing taxes when the fiscal situation permits.

"Meanwhile on the sales tax front, we understand that minimal car prices reduction could also be achieved through the replacement of sales tax with GST."

The research house also added, "This would be done through the enhancement for the supply-chain components and spare parts development.

"It is noted in the policy that soft loans amounting to RM765 million and RM295 million respectively have been set aside for the period of 2014 to 2020 to facilitate the growth of local Tool, Dies & Mould and to enhance vendor competitiveness through automation, consolidation, joint venture (JV), technical cooperation and others.

"With that, we believe this would further promote the production scale for the localisation content in the industry."

Bloomberg have also shared its sentiments on the NAP stating that the relaxed restriction on foreign automakers manufacturing small and eco friendly passenger vehicles would help the country 'selectively seek foreign investments' that bring advanced technology and offer customised incentives to attract companies.

The new policy according to Bloomberg is set to further open up national carmaker Proton to even more foreign competition. The drive to attract global automakers also comes at a time when neighbor Thailand is mired in political protests.

Malaysia is currently in talks with three foreign with as many as four permits may be awarded by 2018 according to Mustapa.

Malaysia wants to set itself as a manufacturing hub for EEVs to differentiate the country from Thailand, where foreignautomakers have invested to produce pick up trucks and other vehicles stated Bloomberg.

"By focusing on EEVs, it also enables Malaysia to be a center for excellence in technology."

Similar to the opinions of the analyst which coincides with the plan to lower car prices, Bloomberg also stipulates that car prices may fall as much as 30 per cent by the end of 2018 as a result of local production by glboal automakers and other government initiatives.

Issues with the AP

On the issue of termination of open Approved Permits (AP) and Franchise AP by December 31, 2015 and December 15, 2020 respectively, the government has decided to undertake an in-depth study to assess the impact of this termination on Bumiputera participation in the automotive industry.

On the Sarawakian front, The Association of Malays Importers and Traders of Motor Vehicles Malaysia (Pekema), Sarawak branch has called on the federal government to review the policy to end the AP system.

According to Pekema chairman, Datuk Abang Khalid Abang Marzuki, the entrepreneurs in Sabah and Sarawak are currently behind their counterparts in Peninsular Malaysia.

It is observed that automotive entrepreneurs here have just started to stabilise their businessess and are trying to follow their peninsular counterparts in expanding into other industries like hotel and property.

He said Pekema Sarawak felt that its members' efforts to expand into other industries have become more difficult when the government announced the plan to end the AP system in 2015.

"The AP system has really helped to create bumiputera entrepreneurs in the automotive business in line with its original objective. Because of this, we are calling on the government to review its decision which will cause these people to suffer."

The main issue for the rakyat

With the NAP set to further boost investment into the local automotive sector, the biggest question that is set on the minds of the 'rakyat' is more on the impact on car prices.

Despite the policies set in place, there have been arguments regarding whether the impact on the local car prices are nominal.

According to sources, among the biggest factor in the car price locally is the excise duty as well as the AP.

These excise duties (of up to 110 per cent on imported cars) as well as a rather opaqued system of issuing AP for car imports are the main factors for car prices being so high.

Touching on the NAP's focus on EEVs, the source noted that despite the tax breaks for these EEVs, they are only a very small portion of the market.

"Most of these EEVs are not cheap. For those low to middle income earners, this is out of their price range. To make the industry truly competitive, the tax break for the excise duty should be across the board."

"We understand the impact of the NAP towards the economy and how it theoretically would bring the economy to a higher level. However, for the regular Malaysian earning less than RM5,000 per month, it is not possible to afford hybrid cars that are usually rather expensive," the source opined.

He also went on to explain how the local auto industry also has limited transparency.

"The people have yet to understand why local cars such as the Proton Satria Neo which is sold for circa RM57,000 locally cost 8,500 pounds (or RM46,500) in the UK. Shouldn't a Malaysian car cost less in Malaysia as compared to those overseas?" he said.

Though it has been explained that the government could not lower the excise duty due to the current deficit as well as due to minimise shock that would affect the car financing business and used car trade, there has also been arguments stating that this is an issue that has be dealt with sooner or later.

It was also highlighted that despite the government's efforts to lower import duties via free trade agreements with their respective country of origin, excise duties have been increasing. Mooting any desired impact on the local auto sector.

Based on a report, excise duties are levied on goods or services produced or consumed within the country and any reduction in the duty 'must not' adversely affect industry stakeholders.

An industry observer that wished to remain anonymous told BizHive Weekly that understandably, local automakers might not be able to compete with the international 'bigwigs' as they have bigger economies of scale.

But he also highlighted that the best way to help our local players is via allowing a more competitive environment in the sector.

"We understand that the reduction of car prices via the lowering of excise duties is not the best way as the government still has to address how to make up for the loss profit. Among the biggest impact from the disposal of the excise duty system would mainly be existing buyers as well as second-hand car dealers.

"For a first time buyer, it would be a dream come true as they now could afford the car that was previously too expensive but for existing buyer it would mean the resale value for the car would have diminished overnight.

"You would now have to pay for the price that you loaned with a car that might be worth half as much.

"We need to advocate for more competition, let the invisible hand of the market dictate price. The market would adapt, demand and supply forces would help adjust pricing and there would not be such a huge overnight impact on the auto segment that would adversely impact current stakeholders.

The observer also said what was needed now was a policy that addresses implementation plans, a more transparent system, healthier competition and addressing our local automakers lack of scale.

"The new NAP I believe is moving in the right direction to an extent. It would no doubt lure investments in with many major automakers agreeing to increasing production like the Mitsubishi ASX, but, to focus the lowering of duties to a small segment of the market and not via an across the board move would not really help the general populace as much as it was made to do."

He noted that despite such positivity to the economy, majority of the 'rakyat' wants to see something that impact them directly as the NAP should not only affect the country in terms of investment but also the people that are living in the country itself.

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