Contents. Delivering Transformation. Message from Chairman of the East Coast Economic Region Development Council (ECERDC)

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2 Contents Page 2 Page 6 Page 18 Page 20 Page 21 Page 22 Page 24 Page 28 Page 66 Page 78 Page 86 Page 90 Page 98 Page 112 Page 116 Page 132 Message from Chairman of the East Coast Economic Region Development Council (ECERDC) Report from the Chief Executive Officer of the East Coast Economic Region Development Council Council Members Audit Committee ECERDC Organisational Structure Management Committee ECER: Delivering Transformation Spurring Development in the ECER: The Key Drivers - Tourism - Oil, Gas & Petrochemical - Manufacturing - Agriculture - Human Capital Development Enabling Sustainable Development: Environment ECER Special Economic Zone: Accelerating Growth With Focused Concentration ECER: The Investors Gateway ECER in the News Calendar of Events Our Team Financial Statement Audit Committee Report Delivering Transformation The cover of ECERDC s Annual Report 2010 incorporates a blue background that resembles the bold swirls of the Wau, the traditional Malay kite which represents the unique identity of the East Coast Economic Region (ECER), reflecting growth. The sense of energy in this design symbolises the transformation that is currently being delivered in ECER. This transformation has already shown its positive impact among the various stakeholders of ECER, who include our children, the future generation, the local populace and the investors.

3 Message from Chairman Of The East Coast Economic Region Development Council (ECERDC) As Chairman of the East Coast Economic Region Development Council (ECERDC), I am pleased to present our third Annual Report for the year ended December 31, With its vision to become a developed region by 2020, the East Coast Economic Region (ECER) has made remarkable progress during the year under review as ECERDC continues to deliver the transformation within the Region for the benefit of the local populace. I am pleased to note that as at the end of 2010, a total of 67 projects approved by the Government for ECER under the 9th Malaysia Plan are currently in various stages of implementation. The projects cover the key economic clusters of Tourism, Oil, Gas & Petrochemical, Manufacturing, Agriculture and Education that will accelerate the growth in ECER. They also include human capital and social development programmes that will help elevate the skills, knowledge and income level of the people. While the year 2009 was regarded as the year of Transformation in Motion for ECER, 2010 can aptly be defined as the year where the transformation is delivered in the Region. This transformation of ECER indeed runs parallel with the Government s Economic Transformation Programme (ETP) which will turn Malaysia into a highincome nation by The ETP, together with the Government Transformation Programme (GTP), the New Economic Model (NEM) and the 10th Malaysia Plan (10MP) will carve Malaysia s path towards a modern, inclusive and high-income society and ECER is well on its way to becoming one of their key beneficiaries. In line with the ETP, all of ECER s clusters support the National Key Economic Areas (NKEA) which include oil and gas, palm oil and related products, tourism and agriculture. ECER projects are also carried out in the same vein as the Government s Entry Point Projects (EPP), where the emphasis is on private investment-led projects that will contribute significantly to the Gross National Income (GNI). The transformation in the Region is indeed people-centric, as the impact of ECER projects will permeate to the local residents who will benefit from the higher income generated through greater employment and entrepreneurial opportunities, resulting from all the development that is taking place in the Region. To spur the development within the Region, the Government in 2009 has launched the ECER Special Economic Zone (ECER SEZ), a concentration of high-impact projects within an integrated development zone that will act as the catalyst of economic growth within ECER. Stretching from Kertih in Terengganu to Pekan in Pahang, the ECER SEZ is set to create 50% of all jobs and account for 80% of all economic output in the Region. I am pleased to note that several high-impact projects in the ECER SEZ, such as the Kertih Polymer Park (KPP), Pekan Automotive Park (PAP), Palm Oil Industrial Cluster (POIC), Gambang Halal Park and Agropolitan Pekan are already on the ground and progressing well. ECER SEZ is also home to the Kertih and Gebeng Integrated Petrochemical Complexes, whose existence can be leveraged by the Oil, Gas & Petrochemical investors in the KPP. Other projects that will be implemented in the ECER SEZ include the Fish Processing Park in Kuantan, Cherating Mainland Coastal Tourism and Sungai Lembing Ecotourism, all of which will further drive the economic growth of the Region. A project of great importance in the ECER SEZ is the development of Kuantan Port City (KPC). One of its key components is the expansion of Kuantan Port into a deepwater port. Once completed, Kuantan Port will be able to serve bigger and more modern vessels. The Government foresees that Kuantan Port will be a major port in the eastern region, a key gateway for Asia Pacific trade and a major logistics hub, serving the clusters of petrochemical, palm oil and automotive, as well as becoming a major industrial and manufacturing zone. On the efforts towards eradicating poverty, ECERDC-led projects such as Pekan Agropolitan, South Kelantan Agropolitan and Besut-Setiu Agropolitan have also shown good progress in terms of improving the lives of the rural poor. The Pekan Agropolitan project participants in Runchang and Batu 8, Lepar for instance, are currently earning an average income of RM1,000 per month through the primary economic activity of sheep rearing. They include 30 Orang Asli participants in Runchang and another 100 participants in Batu 8, Lepar who have already moved into their new, fully-furnished houses built by the Government in September ECER projects match the Government s Entry Point Projects (EPP). 2 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 3

4 High Res Pic Similarly encouraging outcome also applies to Sinar ECER programme, as it continues to transform the lives of nearly 100 children, including the Orang Asli, in Pekan Agropolitan, Pahang and South Kelantan Agropolitan in Gua Musang. I am also pleased with ECERDC s achievement in reviving the areas formerly under the administration of Development Authority of Pahang Tenggara (DARA) and Jengka Regional Development Authority (LKWJ) as entrusted by the Federal Government in Under this special project, the Government through ECERDC has channelled a total sum of RM49.5 million to the six respective local authorities in the areas for the implementation of 107 projects. The projects include socio-economic community programmes, infrastructure projects, general maintenance projects and micro development projects that have benefited local residents. The key to future development in ECER still depends largely on private investments. Since its inception in 2007, ECER has managed to attract RM36.5 billion worth of investments as of end-december ECERDC has targeted a total investment of RM50 billion by the year 2020, with inbound investments of RM5 billion every year. I am pleased with ECERDC s investment promotion efforts done in collaboration with the Malaysian Industrial Development Authority (MIDA) and the Ministry of International Trade and Industry (MITI) in the key focus markets such as the Middle East, China and India in 2010, which have already seen fruitful results. To further attract the arrival of more investors, the Government is consistently developing and upgrading the Region s transportation networks and infrastructure comprising road, air, maritime and rail facilities. Such projects are necessary to improve the Region s connectivity to other growth areas both nationally and internationally, as well as to increase the inter-modal transport links within ECER. A holistic transformation of the Region also needs to address the criticality of human capital development. The Government is fully aware that the development of physical infrastructure in ECER will have to go hand-in-hand with the development of its human capital to ensure a sustainable and inclusive growth within the Region. Following the success of its KerJaya ECER programme launched in 2009, ECERDC has introduced another human capital development initiative in April 2010 known as empower in Bentong, Pahang. This project is part of the Council s effort to boost the academic achievement of local students and create entrepreneurship opportunities for its residents through skills training programmes funded by ECERDC. The 10-month project has already shown positive results, as reflected in the participants academic achievement and higher income as the participants embark on their own entrepreneurship ventures. ECER s vision to become a developed region by 2020 can only be achieved through the strong support of the people of the Region, Federal and State agencies, the private sector, as well as local and foreign investors. I can assure the investors and the people of ECER that the Government is fully committed to ensure the successful implementation of ECER projects. I am pleased to announce that the Region is ready to welcome the arrival of more investors, both from Malaysia and abroad. The basic infrastructure in ECER is already in place and the Region also offers them a very competitive package of both fiscal and non-fiscal incentives. I would like to take this opportunity to record my sincere appreciation to all those who have, and continue to support the implementation of ECER projects and for their ongoing efforts in ensuring the success of this crucial economic development programme. In particular, I would like to thank the Federal Government and the respective State Governments of Kelantan, Terengganu, Pahang and Johor, as well as the relevant agencies and the private sector for playing a key role in the development of ECER. My utmost appreciation also goes to the Council, the Management team and the staff of ECERDC for their hard work, passion and commitment in ensuring the smooth implementation of ECER projects and programmes. The success shown by ECER to date would not be possible without the collaborative efforts by all parties involved. With their continuous support, I am confident that ECER s vision, aspirations and delivery of transformation will be achieved. 1Malaysia People First, Performance Now Dato Sri Mohd Najib ECERDC has targeted a total investment of RM 50 billion for ECER by the year 2020, with inbound investments of RM5 billion every year. 4 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 5

5 Report from the Chief Executive Officer of the East Coast Economic Region Development Council It gives me great pleasure as the Chief Executive Officer of the East Coast Economic Region Development Council (ECERDC) to present a review of the projects and development that have been achieved within the East Coast Economic Region (ECER) for the year ended 31 December I am happy to present that 2010 has been a year of achievements for ECER. It is gratifying to see the progress and impact the year has had in bringing positive change to the four million residents of the Region. During the year under review, development in ECER continues to be driven by Public-Private Sector partnership, with the Federal Government spending on infrastructure support and the private sector injecting investments into the Region. As outlined in the ECER Master Plan, economic growth in the Region will be propelled by the key clusters of Tourism, Oil, Gas & Petrochemical, Manufacturing, Agriculture and Education. The cluster development approach that had been established for the ECER is in synergy with the National Key Economic Areas (NKEAs) which have been identified under Malaysia s Economic Transformation Programme (ETP). At ECERDC, we will continue to implement the necessary infrastructure and socio-economic projects as planned, while intensifying our efforts to bring in more foreign and domestic investments into the Region. PROJECTS AND INVESTMENTS IN ECER The development in ECER is progressing well on track, with all the 67 projects approved by the Government for the Region under the 9th Malaysia Plan (9MP) currently in various stages of implementation. The projects, which have a total value of RM1.4 billion, represent the Government s investments in providing the required infrastructure and implementing various socio-economic programmes in the Region. All the projects implemented in ECER are in line with the New Economic Model (NEM) and they include Entry Point Projects (EPPs) where the emphasis is on private investment-led initiatives and will contribute significantly to the Gross National Income (GNI). In terms of investment, the Region has attracted RM36.5 billion from domestic and foreign investors. Of the total amount, RM15.3 billion has already been received, consisting of 158 investments which led to the creation of 17,500 new jobs for ECER residents as at 31 December Through these projects and their investment value, the aim of eradicating poverty, generating higher household income and developing new entrepreneurs is progressing well in the ECER. TOURISM Tourism is a major income earner for Malaysia, with ECER being a significant contributor with its cultural heritage and natural beauty. In the period up to December 2010, several projects in this cluster had progressed from the Business Strategy & Implementation Plan (BSIP) stage to detailed design works and implementation. The projects include the Mainland Coastal Tourism projects for Pantai Sepat, Cherating, Pulau Besar/Kampung Penarik and Teluk Bidara, as well as Dungun Town Coastal Tourism and Pekan Heritage Tourism. In Ecotourism, BSIP studies were conducted for Setiu Wetlands State Park and the ecotourism belt covering Lanchang, Lipis, Gua Musang and Kuala Krai. A Strategic Implementation Plan (SIP) study was carried out for Tasik Chini State Park, which is to undergo integrated rehabilitation and conservation works due to its profile as the first UNESCO biosphere reserve in Malaysia. ECERDC has also undertaken the Integrated Management Plan study for Lojing Highlands in Kelantan, which had been identified as a Special Management Area under the National Physical Plan and the ECER Master Plan. During the year under review, a BSIP study was also undertaken on the Kuala Terengganu City Centre (KTCC) project. Under the KTCC Master Plan, Kuala Terengganu will be developed into a vibrant Heritage Waterfront City, incorporating a modern urban development which is integrated with its age-old traditions, culture and heritage. All67 projects approved for ECER under 9MP currently in various stages of implemention. 6 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 7

6 OIL, GAS & PETROCHEMICAL While ECER has long-established upstream activities in this cluster, more projects in the downstream and manufacturing related sectors have been enhanced to add value to existing output. The existence of two petrochemical clusters in Gebeng, Pahang and Kertih, Terengganu in ECER will enable investors who are interested to venture in midstream and downstream petrochemical activities to establish their operations in the Region. Realising this, ECERDC has established the Kertih Polymer Park (KPP) which would leverage on the readily available feedstock from the nearby Kertih Integrated Petrochemical Complex and Gebeng Integrated Petrochemical Complex. Notable progress has been made at KPP during the year under review. Land and infrastructure development works for Phase 1A and 1B of KPP have already been completed, while earthworks and infrastructure works for Phase 1C of KPP have commenced in July 2010 and are currently in progress. Companies already operating at KPP include Hi Essence Cable Sdn Bhd and MIE Copper Sdn Bhd, while two other investors have committed a total of RM165 million to establish operations in KPP. These are positive developments in the creation of employment opportunities as well as the development of new entrepreneurs in support activities. Moving forward, an imminent expansion programme in the area of polymers is also expected to take place in ECER s oil, gas and petrochemical cluster in the coming years, which will accelerate the growth in the Region even further. MANUFACTURING ECER s manufacturing cluster serves as a major source of growth in terms of Gross Domestic Product (GDP) and employment. A total of seven BSIP studies were ongoing in 2010, of which five have already been completed by the year end. The completed BSIP studies were for the Kemaman Heavy Industrial Park, Kemaman Boat Building and Repair Industrial Park, Kenaf Integrated Park, Handicraft Industry Programme and Bentong Mixed Industrial Park. In the fourth quarter of 2010, several projects have moved into their implementation phase: Pekan Automotive Park (PAP) The Pekan Automotive Park is envisioned to become a national and regional hub for car assembly, manufacturing of automotive parts and components, as well as automotive R&D activities. During the year under review, PAP s Central Marketing Complex (CMC) was being constructed while infrastructure and landscape upgrading works were in progress. Infrastructure works for PAP (Phase 2) also began in October Several investors have already expressed their interest to establish operations in PAP. The establishment of PAP is in line with the National Automotive Policy (NAP) which will foster a more competitive market for local and international companies. In view of the increasing competition within the regional automotive market, ECERDC intends to position the Pekan Automotive Park as the eco-friendly, first mover in the production of environmentally-friendly vehicles, which include electric vehicles and related technologies, such as battery suppliers, transportation infrastructure and renewable energy providers. Palm Oil Industrial Cluster (POIC) The Palm Oil Industrial Cluster is an initiative by ECERDC that is aimed at accelerating the development of the palm oil industry in the Region. Located in Kuantan in the state of Pahang, POIC takes advantage of its proximity to Malaysia s major palm oil producing areas, petrochemical feedstock and easy accessibility to palm oil mills that produce sufficient feedstock for the downstream activities. Among the promoted sectors of the POIC are surfactant, biodiesel, food, biofertiliser, animal feedmeal, biomass, phytonutrient and polyutherane. The Business Strategy, Marketing and Implementation Plan for the development of the Palm Oil Industrial Cluster (POIC) was completed in August 2010 and earthworks and infrastructure works for the project began in October Once completed, the Park will offer an integrated manufacturing location for investors venturing into the manufacture of downstream palm oil products. ECER Halal Parks ECERDC s Halal Parks in Pasir Mas, Kelantan and Gambang, Pahang were planned in response to the overwhelming global demand for Halal products. Pasir Mas Halal Park s main focus will be on the food industry, while Gambang Halal Park will focus on both food and non-food industries. In 2010, earthworks and infrastructure works have commenced for the Gambang and Pasir Mas Halal Parks and are expected to be ready to receive investors by the first quarter of AGRICULTURE As a key cluster that will strengthen the nation s food security requirements as well as provide income generation and entrepreneurship opportunities to ECER residents, agriculture has recorded highly encouraging progress during the year under review. A total of 15 projects commenced comprising six livestock-related projects, five fish-based projects and four in crops that involved herbal, cassava, citrus and pineapple based industries. To ensure project sustainability, all agriculture related projects have been developed based on the need to complete the products whole value chain, promoting private sector participation, encouraging large-scale farming and leveraging on modern technology. ECERDC has targeted a total investment of RM 1.4 billion worth of projects in Tourism, Oil, Gas & Petrochemical, Manufacturing, Agriculture and Education. 8 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 9

7 Livestock The development plan for ECER s livestock industry has been successfully implemented during the review period. The first-tier projects, out of a three-tier development strategy, have commenced construction in Upon completion, both breeder farms at the Muadzam Shah Cattle Research & Innovation Centre in Pahang and the Kuala Berang Goat Breeding & Innovation Centre in Terengganu will produce 1,200 breeder dairy cattle and 5,625 breeder goats respectively by year 2015, which will benefit local farmers, agro-entrepreneurs and participants of Agropolitan projects. In 2010, earthworks began for the Kuala Berang Goat Breeding & Innovation Centre in Terengganu. Two main components will complement each other in the implementation of the first-tier and second-tier of the goat production programme, namely Nucleus Farms and Multiplier Farms. The construction work for the Ulu Tersat Multiplier Farm and Telaga Papan Commercial Farm for Boer goats has been completed in The farms are commercially operated and managed by Terengganu Agrotech Development Corporation (TADC) a stateowned company to initiate the breeding programme and spearhead the goat production cluster in Terengganu. Crops Pineapple as an industrial crop in the region has also been promoted extensively. The first phase from the total land development of 5,000 acres of the Rompin Integrated Pineapple Plantation project (RIPP) in Pahang has commenced construction in The project is expected to offer 3,000 new employment opportunities to the local residents as well as 50 entrepreneurship programmes through contract farming and satellite farming schemes. Fisheries The fisheries industry has traditionally been a significant source of livelihood in the ECER visibly influencing its socio-economic landscape. Hence, efforts to uplift the socio-economic well-being of the region will have to inevitably focus on this sector. The focal point of this development plan is the establishment of the Marine Fish & Shrimp Hatchery and Fish Seed Marketing Centre in Merchong, Pahang and the establishment of the Freshwater Fish Hatchery & Fish Seed Marketing Centre in Raub, Pahang. Design works for both projects have commenced in The Centre will function as a brood stock development centre, complemented with a selective breeding R&D facility which aims to be a leading player in the production of improved stocks of fish seed in the Region. Both high technology hatcheries will produce 10 million grouper and seabass fry and 20 million tilapia fry respectively. To accommodate the intended linkages between the various fisheries value chains with the value added downstream activities, three fish processing centres have been planned for development, to be located in the major fish and shrimp production concentration areas along the coast. Design works have commenced for the Fish Processing Park in Tanah Putih, Kuantan and Pengkalan Kubor Collection, Processing & Packaging Centre (CPPC), while the BSIP has commenced in 2010 for the Tok Bali Integrated Fisheries Processing Park. The development of a Herbal and Biotechnology Cluster in ECER has been recognised as a key Entry Point Project (EPP) under the New Economic Model. Two sites have been identified for the first phase of the project and detailed survey works were completed in 2010 for the development of two Integrated Herbal Plantations at Pasir Raja in the district of Dungun, Terengganu and Chegar Perah in the district of Lipis, Pahang. Phase 2 of the project will see the development of similar farms in Durian Mentangau, Dungun and Rantau Manis, Gua Musang. AGROPOLITAN The Agropolitan project is aimed at eradicating poverty in ECER and enhancing the income of its participants. This integrated socio-economic project brings about positive change in participants lives by developing land for agriculture-related activities, supported by processing and marketing activities and resettlement of poor families. There are three locations under the Pekan Agropolitan project in Pahang. At Batu 8, Lepar, 100 participants relocated to their new houses built by ECERDC in September Among the facilities here are a kindergarten, multi-purpose hall and surau. Sheep rearing is the primary activity in this location, with 60 Animal Production Units (APUs) for Dorper sheep being built. At the second location in Runchang which involves 30 Orang Asli participants, another 24 APUs for Dorper sheep are being constructed in addition to the existing 11 APUs. Since August 2010, the Orang Asli participants have been earning a steady income of RM600 monthly by working a minimum of four hours a day. The allowance is paid through their personal bank account, which has encouraged a savings habit among them. Tanjung Batu is a new site under the Pekan Agropolitan project. Site clearing works began in 2010 to eventually build 213 houses for participants. Development works have also begun on a 1,200-hectare oil palm estate, thus providing another source of income for the participants in this area. In 2010, ECERDC also began building 350 new houses in Gua Musang for relocation of participants under the South Kelantan Agropolitan (SKA) project. The project will eventually see the building of 3,000 new homes and oil palm plantations over 9,900 hectares of land. Throughout 2010, the 10 pilot participants of SKA who have moved into their homes in 2009 have been earning a steady income of more than RM1,000 monthly by working in the oil palm plantation and through cocoa planting as a subsidiary income. The Region has attracted RM 36.5 billion in investments from domestic and foreign investors. 10 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 11

8 High Res Pic At the Besut-Setiu Agropolitan project, site clearing began in September 2010 for the construction of 100 homes and 50 APUs for participants, as well as related infrastructure. ECERDC Agropolitan Projects have received tremendous support from all parties involved, including approval of land by the State Governments. FELDA is the Implementing Agency for both Pekan Agropolitan Project and Besut Setiu Apropolitan Project, while KESEDAR was appointed as the Implementing Agency for South Kelantan Agropolitan Project. The role of the Implementing Agencies is to manage participants and economic activities. HUMAN CAPITAL DEVELOPMENT ECERDC places great emphasis on developing the human capital within the Region in order to spur the implementation of projects and attract further participation by foreign and domestic investors. Centres of Excellence The 15 Centres of Excellence (COE) established in five ECER universities continue to fulfill their support role to the needs of industries in tourism, oil, gas and petrochemical, manufacturing, agriculture, Halal products, wood-based products and biotechnology, and hospitality and tourism management. The participating universities are Universiti Sultan Zainal Abidin (UniSZA), Universiti Malaysia Kelantan (UMK), Universiti Malaysia Pahang (UMP), Universiti Malaysia Terengganu (UMT) and Universiti Teknologi Mara (UiTM). In March 2010, ECERDC in collaboration with the Higher Education Ministry (KPT) and the Centre of Industry-Academia Collaboration (CIAC) led by UMK organised its inaugural industry-academia entrepreneurial convention known as Konvensyen Keusahawanan ECER-KPT 2010 in Kota Bharu. The convention was part of ECERDC s effort to ensure that the expertise, research findings and the new technologies developed by the COE at the universities are properly channelled to the participants for commercialisation purposes. KerJaya ECER KerJaya ECER programme was originally formulated to mitigate unemployment problems caused by the previous global economic crisis. The programme consists of the Skills Training Programme (STP), Graduate Placement Opportunity (GPO) Programme and Employee Placement Programme (EPP). As of December 2010, a total of 1,379 ECER residents have successfully been employed through KerJaya ECER s GPO and EPP. In addition, 1,268 trainees who graduated from the STP programme have successfully secured job placement in various companies within ECER. empower Bentong empower is another human capital initiative by ECERDC which was launched in Bentong Pahang in July 2010, as part of the Council s effort to boost the academic achievement and employability of the locals, as well as create entrepreneurial opportunities for them through the skills training provided. As of 31 December 2010, a total of 1,035 participants from Bentong, Pahang had undergone academic and skills training courses under the empower Bentong programme. Even though the Skills Training courses were still ongoing as of end-2010, more than 120 participants have already obtained placements and were earning additional incomes of between RM800 and RM1,000 per month. For the Academic Training programme, 163 UPSR students and 119 PMR students amongst its participants managed to score 100% passes in all subjects taken, surpassing ECERDC s set targets. Sinar ECER For the children of Agropolitan project participants in South Kelantan Agropolitan, Gua Musang and Pekan Agropolitan in Runchang, ECERDC has introduced the Sinar ECER programme which encompasses academic activities, as well as public speaking skills and the nurturing of self-confidence and self-management skills. The potential for positive change in lives can be seen in the transformation of the mindset of these children. An inspiring story comes from the Agropolitan settlement at Runchang in Pahang, where Juyana Teor Bak Song of Sekolah Kebangsaan Runchang scored 5As in the UPSR examination, the first ever child to do so from the Orang Asli community in Runchang. ECER Entrepreneurship Development Programme (EEDP) ECERDC has also introduced the ECER Entrepreneurship Development Programme (EEDP) to increase the involvement of the Bumiputera Commercial and Industrial Community (BCIC) and Small- and Medium-sized Industries (SMIs) in ECER. This will be done through ECERDC s collaboration with the private sector. Two pilot projects have been implemented in Mersing, Johor under EEDP, namely the Vendor Development Programme-Sewing Project and Boat Building and Repair Centre (BBRC). The projects involve the partnership between ECERDC and GIATMARA Sdn. Bhd. with the support of the Mersing District Office. 12 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 13

9 The women empowerment programme saw the addition of the Songket weaving project in Terengganu, initially with three female participants. They are now generating a monthly income of around RM1,000. TRANSPORTATION AND INFRASTRUCTURE The development of transportation and infrastructure has always been a priority to the Federal Government. Infrastructure comprising road, air, maritime and rail facilities will be upgraded to increase intermodal transport links within ECER, and to improve the connectivity to other national growth areas. The improved infrastructure and connectivity will facilitate investment activities within ECER. The Integrated Master Plan of Kuantan Port City (KPC) was completed and handed over to Kuantan Municipal Council for incorporation into Kuantan Local Plan. From the Master Plan, projects to improve roads, water supply and drainage for KPC development have been initiated. A BSIP was also undertaken for the Terengganu State ICT Centre, with the completion of the Inception Report in November. The Centre is set to drive the growth of the ICT industry in ECER and also help achieve MSC status. Several water works projects were also in various stages of implementation during Construction of a 2 km piping loop system to improve the water quality in Gebeng was completed and handed over to the Pahang Water Supply Department in March. A design was also ongoing for the elevated water storage tanks and pipelines to meet the water storage requirement for KPC. The first Package of the Panching Water Treatment Plant at Felda Panching Timur commenced in August with site clearing and earthworks. Upon completion, the water treatment plant will have a capacity of 160 million litres per day and is expected to supply potable water to the Kuantan area as well as areas south of the Kuantan River. Design works have also commenced in August for a water treatment plant in Ganchong, Pekan to bring treated water to Tanjung Agas and the Pekan-Peramu area. With design works anticipated to be completed in mid-2012, construction of the water treatment plant is expected to begin in early Road projects have also moved ahead. The design of Package 1 for KPC Port Link Road has been completed with a new interchange at the East Coast Expressway Phase 2. The construction will provide a high speed and reliable link from the industrial areas in Terengganu and Kelantan to Kuantan Port. As for the Mersing-Kg Sedili Coastal Road, the design works have been completed with the Land Acquisition Plan for the Mersing-Kg Sedili road submitted to the Mersing Land and District Office. The land acquisition exercise is targeted to be completed in The construction of a new coastal road is anticipated to generate tourism activities as the coastal area from Mersing town to Kg Sedili has great potential as a major tourism destination. The design for road improvement works from Sg Emas to Kg Peta in Taman Negara Endau- Rompin was completed with construction works to commence in The improvement is expected to provide uninterrupted access into the national park as the road would be raised above the flood level. The Central Spine Road (CSR) will see the existing federal route from Kuala Krai to Simpang Pelangai upgraded into a 2-lane dual carriageway. Upon completion, the CSR would have a positive effect on the socio-economic growth of all small towns along its route. Another road project is the construction of the new Bukit Kuang Bridge to replace the existing bridge with a 2-lane dual carriageway. Construction for this project started in July 2010, and is expected to be completed in three years. Upon completion, it will ease traffic congestion in the Kemaman area as well as provide faster connectivity between the east coast and the west coast region. The ongoing feasibility study for the East Coast Rail Route that will link ECER from Tumpat to Kuala Lumpur in the Klang Valley will be completed by The objective of the rail study is to ascertain the engineering viability as well as the economic and financial feasibility for the proposed rail route. Discussions were held with various stakeholders to confirm the alignment of the rail route linking the two places. In addition, an Interim Report was also produced in 2010 for the coastal protection works at Teluk Lipat, Dungun, Terengganu. The objective of the coastal protection works is to protect Dungun coastal area which is severely affected by erosion. 14 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 15

10 REVIVAL OF FORMER DARA & LKWJ AREAS In 2010, ECERDC was tasked by the Government to revive the areas formerly under the Development Authority of Pahang Tenggara (DARA) and Jengka Regional Development Authority (LKWJ). ECERDC began the disbursement of RM49.5 million from the Federal Government to the district and town councils of Maran, Rompin, Pekan, Bera, Jerantut and Temerloh for maintenance and development projects. The fund was used for socio-economic community development, infrastructure and maintenance projects, which include construction and upgrading of roads and the drainage system. ENVIRONMENT ECERDC places utmost importance in safeguarding the Region s environment quality and resolutely subscribes to the principles of sustainable development of stewardship to the environment. It hopes to improve the standard and sustainability in the quality of life, as well as ensure the development activities in the Region are undertaken in a sustainable manner whereby its natural resources are appropriately utilised. During the year, a SIP was carried out for Tasik Chini State Park for it to undergo integrated rehabilitation and conservation works. An ecotourism attraction in ECER, Tasik Chini has been designated by UNESCO as the first biosphere reserve in Malaysia. The Integrated Management Plan study for Lojing Highlands in Kelantan has also been undertaken in In addition, tourism activities planned under Kampung Penarik Mainland Coastal Tourism Development will be packaged and promoted with an enforceable Management Plan in managing the Setiu Wetlands State Park. The park has been identified as a potential sustainable economic catalyst through the creation of innovative tourism activities in the area. INVESTMENTS ECER continues to intensify its investment promotion efforts during the year under review by organising and participating in various investment missions and promotion exhibitions in key focus markets such as China, the Middle East, India and Singapore. This was done in collaboration with the Malaysian Industrial Development Authority (MIDA) and the Ministry of International Trade and Industry (MITI). Between the period of 2007 and December 2010, ECER managed to attract RM36.5 billion worth of investments, of which RM15.3 billion had been received. Our participation in investment missions and promotions in 2010 alone generated more than RM7 billion potential investment interest, with a sizable portion already approved and in various stages of implementation. ECER will continue to be marketed as an attractive investment destination in Asia Pacific with a strong resource-based economy, with emphasis on value-adding activities that capitalise on the existing resources. ECERDC will continue to promote key ECER projects to both domestic and international investors, especially in the areas of Automotive Manufacturing, Halal Manufacturing, Herbal & Biotechnology Industry, Kuantan Port City, Tourism and Education. With an attractive fiscal and non-fiscal incentive package, as well as continuous infrastructure improvement setting the ground for investment to take off in the fast track, ECERDC is looking forward to welcoming more investment interest into ECER in the coming years. Acknowledgements As ECER progresses into a region that is delivering transformation to its residents, it is all the more vital that the momentum gained since its inception in 2008 be maintained, and indeed, accelerated. With the progress achieved to date, the Region is ready to welcome more investments from both domestic and abroad. This in turn, will help propel ECER in achieving its vision of becoming a developed region by 2020 and at the same time, creating a highincome population. I am therefore once again indebted to the leadership of our Prime Minister and Chairman of ECERDC, Y.A.B. Dato Sri Mohd Najib bin Tun Haji Abdul Razak, for his vision, leadership and guidance. My thanks are also due to our fifth Prime Minister, Y.A. Bhg. Tun Abdullah bin Haji Ahmad Badawi, the National Corridor Development Adviser, for his advice and guidance. I would also like to express my utmost appreciation to the respective Menteri Besar of Kelantan, Terengganu, Pahang and Johor for their invaluable support and guidance in facilitating all ECER projects in their states. I also appreciate the guidance and directions given by the Council Members who have brought their collective experience and personal insights in focussing efforts in implementing ECER projects. I am thankful to the Prime Minister s Department, the Economic Planning Unit, the Public- Private Partnership Unit and the Ministry of Finance, as well as the respective Federal and State Government departments and agencies, for their continued support in the smooth implementation of projects within ECER. My thanks are also due to the tireless and dedicated team in ECERDC who carry the responsibilities of strategic planning, execution and implementation of all the projects and programmes in ECER. They have all shown a high degree of enthusiasm and passion for the progress that has been targeted for ECER. Their energy continues to drive forward the ECER, its economy and the wellbeing of its people. I must also express our special thanks to all returning PETRONAS staff who have been seconded to ECERDC for their outstanding service and invaluable contribution to the Council. To everyone of you, I extend my warmest appreciation. Dato Jebasingam Issace John 16 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 17

11 Council Members SEATED: 1. Y.A.B Dato Sri Mohd Najib bin Tun Haji Abdul Razak Prime Minister of Malaysia, Chairman of ECERDC 2. Y.A.B. Tan Sri Dato Haji Muhyiddin bin Mohd Yassin Deputy Prime Minister STANDING FROM LEFT: 3. Y. Bhg. Tan Sri Dato Lee Shin Cheng Group Executive Chairman, IOI Group of Companies 4. Y.A.B. Dato Haji Nik Abdul Aziz bin Haji Nik Mat Menteri Besar Kelantan 5. Y.A.B. Dato Sri DiRaja Haji Adnan bin Haji Yaakob Menteri Besar Pahang 6. Y.A.B. Dato Seri Ahmad bin Said Menteri Besar Terengganu 7. Y.A.B. Dato Haji Abdul Ghani bin Othman Menteri Besar Johor 8. Y. Bhg. Dato Shamsul Azhar bin Abbas President & Chief Executive Officer Petroliam Nasional Berhad (PETRONAS) 9. Y.B. Tan Sri Nor Mohamed bin Yakcop Minister in the Prime Minister s Department 10. Y.B. Dato Seri Ahmad Husni bin Mohamad Hanadzlah Minister of Finance II 11. Y. Bhg. Tan Sri Mohd Sidek bin Haji Hassan Chief Secretary to the Government

12 Audit Committee ECERDC Organisational Structure ECER Development Council Council Members Kelantan ICC Terengganu ICC Pahang ICC Johor ICC Chief Executive Officer State Office Kelantan Terengganu Pahang CEO s Office Legal Audit Council Secretariat Risk General Manager General Manager General Manager General Manager General Manager General Manager Business Development Infrastructure Agriculture Social Development Property, Tourism & Mfg IM & SEZ SEATED: 1. Y. Bhg. Tan Sri Dato Lee Shin Cheng Group Executive Chairman, IOI Group of Companies 2. Y. Bhg. Dato Shamsul Azhar bin Abbas President & Chief Executive Officer Petroliam Nasional Berhad (PETRONAS) STANDING FROM LEFT: 3. Aisha binti Abdul Manaf (Secretary to the Audit Committee) Senior Manager Internal Audit ECERDC 4. Y. Bhg. Datuk Shukry bin Haji Mohd Salleh Director General Coordination & Implementation Unit Prime Minister s Department 5. Y. Bhg. Datuk Dr. Rahamat Bivi binti Yusoff Deputy Secretary General of the Treasury (Systems & Control), Ministry of Finance Y. Bhg. Datuk Dr Rahamat Bivi binti Yusoff was appointed as the Audit Committee member effective 21 March 2011, having succeeded Y. Bhg. Dato Puteh Rukiah Bt Abdul Majid who retired on 20 March Audit Committee Industry Expert Panel Management Committee General Manager General Manager General Manager Corporate Communications Finance HR & Administration

13 Management Committee SEATED: STANDING FROM LEFT: 1. Syed Zikiri bin Syed Hassan Shahabudin General Manager, Agriculture Division 2. Y. Bhg. Dato Jebasingam Issace John Chief Executive Officer 3. Zamri bin Ahmad General Manager Property, Tourism & Manufacturing Division 4. Zulkifli bin Ya acob General Manager Social Development Division 5. Mazlan bin Sharuddin General Manager, Pahang Office 6. Mohd Zamzuri bin Mohd Yusoff General Manager, Finance Division 7. Arizan bin Arifin Senior Manager, Infrastructure Division 8. Ravindran Raman Kutty General Manager, Corporate Communications Division 9. Hayazim bin Daud (Secretary to the Management Committee) Senior Manager, Council Secretariat 10. Ragu Sampasivam General Manager, Business Development 11. Ahmad Fuad Sulaiman General Manager, Terengganu Office 12. Husnin bin Othman General Manager, Kelantan Office 13. Nik Mohd Nasir bin Nik Salleh General Manager, Human Resources & Administration 14. Farid Zaineddin bin Abdul Hamid General Manager Investment Management & SEZ 15. Kauthar binti Ali Senior Legal Counsel Nik Mohd Nasir bin Nik Salleh was appointed as the Management Committee Member effective 16 December 2010, having succeeded Dzalina binti Abd Manan who resigned on 31 December Ravindran Raman Kutty was appointed as the Management Committee Member effective 6 January 2011, having succeeded Ruziah Azdi binti Abd Rahman who resigned on 31 December Arizan bin Ariffin was appointed as the Management Committee Member effective 9 March 2011, having succeeded Sallehuddin bin Hamzah who resigned on 31 January Hayazim bin Daud was appointed as the Management Committee Member effective 13 January 2011, having succeeded Raja Zera binti Raja Zaib Shah who resigned on 31 December Ragu Sampasivam was appointed as the Management Committee Member effective 4 November 2010, having succeeded Akmal Arief bin Mohamed Fauzi who resigned in October Husnin bin Othman was appointed as the Management Committee Member effective 1 November 2010, having succeeded Sakim bin Rosdi who resigned in September Farid Zaineddin bin Abdul Hamid was appointed as the Management Committee Member effective 16 February 2011, having succeeded Zulfiqar bin Zainuddin who resigned in November ECERDC LAPORAN 2010 TAHUNAN ANNUAL 2010 REPORT ECERDC ECERDC 2010 ANNUAL REPORT 23

14 ECER: Delivering Transformation The East Coast Economic Region Development Council (ECERDC) is a statutory body established under an Act of Parliament, the East Coast Economic Region Development Council Act 2008 (Act 688), to drive the implementation projects and key programmes identified in the ECER Masterplan. The ECERDC is empowered to provide for the proper direction, policies and strategies in relation to the development within the East Coast Economic Region (ECER). The Council is also empowered to provide for coordination between Government entities in the promotion of trade, investment, tourism and development within the ECER. The momentum of development in the East Coast Economic Region (ECER) of Malaysia continues to be seen during the year under review. Comprising the states of Kelantan, Terengganu, Pahang and the district of Mersing in Johor, ECER is now emerging as a distinctive, dynamic and competitive destination for investments, attracting both local and international investors. VISION ECER is steadily transforming itself into a vibrant investment destination and key exporter of resource-based and manufactured products, equipped with modern infrastructure and logistics. The Region covers 51% of the land area of Peninsular Malaysia, with a population of 4.3 million people as of 2010 or 15.2% of the total national population. ECER s strategic position on the East Coast of the Peninsula makes it the ideal destination for investors who seek to reach out to the thriving markets of Asia Pacific, which has a combined population of 2 billion. The development of ECER is guided by a well-defined vision that will serve as a basis for the formulation of mission and strategies. ECER is envisioned to become a developed region by 2020 and this vision runs parallel with the Government s Economic Transformation Programme (ETP) which aims to transform Malaysia into a high-income nation by To drive the implementation of projects and programmes identified in the ECER Master Plan, the ECER Development Council (ECERDC) was established in ECERDC is chaired by the Prime Minister of Malaysia, Dato Sri Mohd Najib Tun Abdul Razak, with members comprising the Chief Ministers of the ECER states, high-level Federal and State Government officials, and representatives from the private sector. All of the ECER s clusters support the 12 National Key Economic Areas (NKEAs) and are implemented in the spirit of the New Economic Model (NEM). Similar to the Government s Entry Point Projects (EPP), the development in ECER places great emphasis on private investment-led projects that will contribute significantly to the Gross National Income (GNI). The growth in ECER will be accelerated by the development within the ECER Special Economic Zone (ECER SEZ), which is designed to fast track investment in a zone of concentrated economic development. ECER SEZ is located at the nucleus of ECER, the 25 km by 140 km strip that extends from Kertih in Terengganu to Pekan in Pahang. The ECER Master Plan has set the foundation for the strategies, programmes and projects that will position ECER as a developed region by the year The Region is set to prosper with an increase in population to 4.3 million and with new jobs growing by 560,000 to a projected total of 1.92 million employment opportunities. MISSION The drive to draw investments into ECER is more than just an economic strategy. Underlying it is a vital and transforming objective: that of eradicating poverty among the people of the Region, generating higher household incomes through sustainable livelihoods, as well as increasing job and entrepreneurial opportunities. Economic growth in the Region will be mainly spurred by five key economic clusters: Tourism, Oil, Gas & Petrochemical, Manufacturing, Agriculture and Education. These clusters will be supported by developments in Social and Human Capital, Transportation, Infrastructure, Property and Environment. OVERVIEW OF ECER STATES Drawing upon the uniqueness and strengths of Kelantan, Terengganu, Pahang and the district of Mersing in Johor has allowed for development in the Region to take on a synergistic approach that makes the most of existing resources and capabilities. Kelantan Kelantan s border with Thailand makes it the ideal cross-border trading and tourism centre for the East Coast, along with the trading heritage of the people of Kelantan. Cross-border initiatives through the Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT) and the Joint Development Strategy (JDS) will further enhance development in the State. The IMT-GT and JDS initiatives will help increase the flow of raw materials from Thailand, thus supporting downstream industries in ECER especially in the ECER Special Economic Zone (SEZ) and the Cross-Border KDA. They will also enhance the Kota Bharu City Centre development and strengthen the city s role in cross-border trade. The Kelantanese people are also a key resource for the State, an asset that is given added value with the establishment of a major education hub in Kota Bharu-Bachok, comprising Universiti Malaysia Kelantan (UMK), Universiti Teknologi MARA (UiTM) in Machang and Universiti Sains Malaysia s medical campus. Kelantan is also home to various training institutes and colleges such as Institut Teknologi Tun Abdul Razak Kota Bharu, Kolej Poly- Tech MARA, Kolej Teknologi Cosmopoint and Kolej Teknologi Darulnaim. The state s long history of agriculture is the foundation for a variety of agro-based activities, which will incorporate large-scale farming and modern technologies. A key agriculture project in the State would be the second phase of ECER s Herbal and Biotechnology Cluster development that will be undertaken in Rantau Manis, Gua Musang. 24 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 25

15 As part of its poverty eradication programme, ECERDC is also implementing the South Kelantan Agropolitan (SKA) project in Gua Musang. The project will eventually see the building of 3,000 new homes for poor families and the development of oil palm plantations over 9,900 hectares of land that will be their primary source of income. Manufacturing is another cluster represented in Kelantan and a key project in this area is the Pasir Mas Halal Park, which will be focusing on the manufacturing of Halal food products. Kelantan is also renowned for its skilled master craftsmen and the production of quality handicraft such as silverware and wood carving, which will add to the variety of tourism attractions in the state. Terengganu Terengganu is blessed with beautiful islands and stunning beaches that have naturally made tourism a key cluster in the Region. Islands such as Pulau Perhentian, Pulau Redang and Pulau Tenggol have already been well-known among both local and international tourists and the State also boasts breathtaking mainland coastal beaches like the ones found in Tanjung Jara, Teluk Bidara, Kampung Penarik and Kijal-Kemasik. The State capital will play a leading role as an international tourism gateway through the development of the Kuala Terengganu City Centre (KTCC) as a Heritage Waterfront City. Terengganu is also the leading oil, gas and petrochemical hub in Peninsular Malaysia. In order to promote the development of midstream and downstream oil and gas activities, ECERDC has established the Kertih Polymer Park (KPP) which would leverage on the readily available feedstock from the nearby Gebeng Integrated Petrochemical Complex and Kertih Integrated Petrochemical Complex. Livestock production is also being developed in Terengganu through the Kuala Berang Goat Breeding & Innovation Centre and the Goat Multiplier Farm in Kuala Berang, as well as the Goat Commercial Farm in Telaga Papan. Human capital development is a priority in the state through tertiary institutions including Universiti Sultan Zainal Abidin, Universiti Malaysia Terengganu (UMT), Kuala Terengganu Polytechnic and Dungun Polytechnic, as well as the establishment of the Taman Ilmu (Knowledge Park) in Besut. Terengganu is also home to various private colleges such as Pusat Teknologi dan Pengajian Lanjutan (PTPL) Kuala Terengganu, Kolej Teknologi Bestari and Institut Teknologi PETRONAS. Pahang Pahang is shaping up as a major industrial and logistics hub in the Region, serving the petrochemical, palm oil, automotive and container markets. The State s location also allows it to play the role of an industrial and manufacturing zone, serving the entire Far East and Asia Pacific region. The State is also the location of ECER SEZ, the catalyst of economic growth within the Region. Within ECER SEZ, a Palm Oil Industrial Cluster (POIC) is being developed near Kuantan Port City (KPC), specialising in downstream palm oil activities. The Pekan Automotive Park (PAP), also located in ECER SEZ, is fulfilling its potential as the manufacturing and assembly hub for motor vehicles in the Region. An Integrated Halal Park will also be developed in Gambang, focusing on Halal food and non-food products. A key project in Pahang is the development of KPC, which involves the expansion of Kuantan Port and the development of new areas for industries, residences, commercial, tourism, institutional and open spaces. Kuantan Port is being upgraded to a deepwater harbour and is poised to become a centre for manufacturing and commercial services, while also serving as a regional distribution and international procurement centre. In the agriculture cluster, cattle production will be implemented starting with the first-tier of Nucleus Farm in Muadzam Shah, followed by the second-tier of Multiplier Farm in Ulu Lepar and finally, the third-tier of Commercial Farm that will be integrated in oil palm and pineapple plantations. Large-scale pineapple plantations will also be carried out in Rompin, incorporating the entire value chain of pineapple production. In terms of poverty eradication, Pahang currently boasts three sites for ECERDC s Pekan Agropolitan projects, namely Batu 8 in Mukim Lepar, Runchang and Tanjung Batu. Education is a high priority in the State and Pahang is home to established tertiary institutions such as Universiti Malaysia Pahang (UMP), the International Islamic Universiti Malaysia (UIAM), Universiti Teknologi MARA (UiTM) Jengka campus and Universiti Tenaga Nasional (UNITEN Pahang) in Muadzam Shah. In tandem with education, skills training is equally important in meeting the needs of businesses that are being established in ECER. A number of training establishments help to fulfil the need for trained staff and they include the Pahang Skills Development Centre Kuantan (PSDC Kuantan), Cosmopoint College, MARA Professional College, MARA Poly- Tech College and Kolej Shahputra. Mersing, Johor The Mersing district has traditionally been a transit point for tourists visiting the nearby Pulau Tioman and the Mersing group of islands such as Pulau Besar, Pulau Rawa, Pulau Aur, Pulau Sibu and Pulau Pemanggil, as well as the Endau-Rompin National Park. It will now be developed as an important mainland coastal tourism destination in its own right with highly developed tourist facilities. ECERDC has initiated two pilot projects in Mersing under its ECER Entrepreneurship Development Programme (EEDP) to increase the involvement of the Bumiputera Commercial and Industrial Community (BCIC) and Small- and Medium Industries (SMIs) in the Region. The pilot projects consist of the Vendor Development Programme-Sewing Project and Boat Building and Repair Centre (BBRC). ECER: DELIVERING TRANSFORMATION As the Region steadily transforms itself into a vibrant investment destination, the development within ECER will continue to be people-centric. ECERDC will ensure that all the projects in the Region are effectively implemented and will help create new job and entrepreneurial opportunities for the local populace, which will translate into higher household income. ECER will be developed via a cluster development approach, whereby six Key Development Areas (KDAs) have already been identified for this purpose. The KDAs are the ECER SEZ, Tumpat-Kota Bharu-Bachok-Tok Bali-Besut Cross Border Development, Kuala Terengganu City Centre (KTCC)-Kenyir-Dungun Triangle, Mersing-Rompin KDA, Gua Musang-Kuala Lipis KDA and Bentong-Raub KDA. The transformation that is sweeping across the Region comes from the various projects that have been identified under the 9th Malaysia Plan (9MP) and will be continued in the 10th Malaysia Plan. As of December 2010, a total of 67 ECERDC-led projects approved by the Government have been implemented in ECER at various stages and they include the Kertih Polymer Park (KPP), Pekan Automotive Park (PAP) and Palm Oil Industrial Cluster (POIC), among others. These projects are planned and coordinated in a focused way to develop the Region within the larger objectives of the ECER Master Plan as well as the Government s ETP. Cluster projects will enjoy the synergies of the major logistics infrastructure that has been planned, including the development of Kuantan Port City (KPC) that will turn ECER SEZ into a manufacturing and commercial and services hub, as well as a regional distribution and international procurement centre. To ensure that ECER s vision will be realised as planned, ECERDC will continue to intensify its effort in attracting more inbound investments into the Region. In line with the Government s aspirations, all ECER projects will be private-sector driven. Besides private investments, enterprises also have the opportunity to become Anchor Companies for ECERDC-led projects, providing a win-win opportunity for all parties involved. Backed by the strong progress achieved by the Region to date, the delivery of transformation will continue to take place in ECER, benefiting not only the local populace, but also the nation as a whole. As of December 2010, a total of 67 ECERDC-led projects approved by the Government have been carried out in ECER at various stages. 26 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 27

16 TOURISM ECERDC s tourism initiatives cover six distinct segments, namely Mainland Coastal Tourism, Culture & Heritage Tourism, Ecotourism, Urban Tourism, Cross-Border Tourism and Sustainable Island Tourism. 28 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 29

17 Tourism Blessed with unspoilt beaches, coral-ringed islands and lush rainforests, the East Coast is internationally acknowledged as one of the most unique tourism destinations in the world. The richness of ECER s natural assets has made tourism one of the key drivers of growth in the Region, offering vast potential for investors and employment opportunities to the locals. MAINLAND COASTAL TOURISM Cherating Mainland Coastal Tourism Home to the world-famous Club Med resort, Cherating is well-known for its beautiful beaches and idyllic, laidback lifestyle. Cherating Mainland Coastal Tourism Development has been identified as one of the key tourism projects in the Region and ECERDC aims to develop the area into a unique and sustainable coastal tourism destination. The Business Strategy and Implementation Plan (BSIP) study for Cherating Mainland Coastal Tourism Development is still ongoing and has been targeted to be completed by the end of June Concurrently, ECERDC is also undertaking the detailed design for infrastructure works at Chendor area in Cherating. All the village charms of Cherating will be preserved, giving tourists the unique experience of participating in a lifestyle that few can call their own. When it is completed by 2020, the project will generate 3,000 jobs with RM900 million worth of investments. Pantai Sepat Mainland Coastal Tourism The BSIP for Pantai Sepat Mainland Coastal Tourism project in Pahang was completed in November This will be followed by infrastructure works, including rehabilitation to contain erosion of the beach. The project stands to benefit from the rustic lifestyle and wetlands in the vicinity, which are priceless assets in shaping a unique tourism destination. The developments in Pantai Sepat will include the construction of hotels, convention centres, a golf course, amenities and facilities of a new township, as well as an eco-centre and nature reserve for wildlife education and ecotourism activities. Once the project is fully completed by 2020, it would have an investment value of RM700 million and create 2,677 jobs and support entrepreneurship opportunities. Teluk Bidara Mainland Costal Tourism The BSIP study for Teluk Bidara Mainland Coastal Tourism in Dungun, Terengganu was completed in November 2010 and infrastructure works will follow suit, beginning with beach rehabilitation in order to preserve one of its strongest attractions. The project is an integrated one, with mixed development that combines boutique beach resorts with the charms of nearby villages to draw both domestic as well as foreign tourists. By 2020, it would achieve an investment value of RM320 million and create up to 5,448 jobs. Bandar Dungun Mainland Coastal Tourism Another tourism development in Terengganu is the Bandar Dungun Mainland Coastal Tourism project. The BSIP study for the project was completed in December 2010, paving the way for the development of the area as a centre for commercial and tourism activities, with a niche as a seafood town. When the project is fully completed by 2020, it will have created up to 2,000 jobs. Pulau Besar/Pantai Kampung Penarik Mainland Coastal Tourism The Mainland Coastal Tourism development in Pulau Besar/Pantai Kampung Penarik will be integrated with the Setiu Wetlands State Park. The BSIP study is in the final stages and will be completed by June These projects will have a combined investment value of RM2 billion and will create up to 8,575 jobs by D perspective of Kuala Terengganu City Centre. URBAN TOURISM Kuala Terengganu City Centre (KTCC) The Kuala Terengganu City Centre (KTCC) development will be the catalyst project that will boost the tourism sector in Terengganu in particular and ECER in general. Hailed as the key tourism gateway to the East Coast, the KTCC development is expected to create jobs for up to 82,591 people by During the year under review, the Master Plan study was ongoing on the KTCC project. The study area for KTCC Integrated Master Plan covers an area of a 7 km radius from the Sungai Terengganu estuary, whereby five (5) Key Development Areas for the project have already been identified, namely, Muara Utara, Muara Selatan, Pulau Warisan, Kg. Ladang/Tanjung and the Corniche Waterfront. Muara Utara and Muara Selatan are reclaimed lands located near the estuary of Sungai Terengganu and these areas have been identified as the expansion of the current city s Central Business District due to their strategic location facing the South China Sea. The development of Muara Utara and Muara Selatan is expected to have an investment value of RM4.1 billion. The Kuala Terengganu City Centre development is expected to create up to 82,591 jobs by 2020, with an estimated investment value of RM 4.1 billion for the development of Muara Utara and Muara Selatan. 30 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 31

18 3D illustration of the proposed refurbishment of Muzium Sultan Abu Bakar in Pekan. CULTURE & HERITAGE TOURISM Pekan Heritage Tourism Development Culture and heritage tourism in Pekan, Pahang is set to take off with the completion of the BSIP for the project in December The royal town of Pekan will be developed as a heritage site through the rehabilitation of historical buildings and riverfront areas. The entire project will be completed in stages, culminating in 2020, by which time it would have created 935 jobs. ECOTOURISM This segment of tourism is increasingly sought after as more and more developed countries turn into urban environments. By contrast, ecotourism is a diminishing asset globally and thus makes ECER one of the few areas in the world to offer this unique experience. Tasik Chini Biosphere Reserve Recognised by UNESCO as the first biosphere reserve in Malaysia, Tasik Chini has been identified as one of the ecotourism attractions in ECER which will incorporate awareness programmes on environment conservation for the benefit of the local residents and future generations. In 2010, a Strategic Implementation Plan (SIP) study was carried out for the Tasik Chini State Park. Land surveying works and earth studies for Tasik Chini were completed in the same year, while rehabilitation and conservation studies of the lake are currently being undertaken by UKM-Pusat Penyelidikan Tasik Chini. Setiu Wetlands State Park Setiu Wetlands State Park will serve as the main ecotourism attraction in the Setiu area, complementing the overall development in Pulau Besar/Setiu Penarik. The Kampung Penarik Mainland Coastal Tourism Development and the Setiu Wetlands State Park have the potential as a sustainable economic catalyst through creation of innovative tourism activities. The tourism activities will be packaged and promoted with an enforceable Management Plan for Setiu Wetlands State Park, which has been identified as an environmental and economic asset for the state. The study area identified and recommended for this project is 1,025 square km (102,500 ha) in size. Three categories of internal management zones were created for Setiu State Park, namely, Strict Protection Zone which covers sites of highest biodiversity value in the park, River Restoration Zone which focuses on rehabilitation of the largest rivers in the park, and Sustainable Use Zone which identifies areas for sustainable economic development and community use. Malaysia Tiger Trail ECERDC has also identified the possibility of establishing the Malaysia Tiger Trail as a means to link all the interpretation stories along the five destination clusters comprising Lanchang, Raub, Kuala Lipis, Gua Musang and Kuala Krai. The Malayan Tiger theme makes a connection with natural landscape and wildlife and suggests a journey that entails the many different eco-adventure experiences that can be found along the trail. HOMESTAY PROGRAMME The Homestay Programme is another tourism initiative in ECER which capitalises on the Region s rich and unique culture. The main objective of the Homestay Programme in ECER is to enhance the economic, social and cultural potential of the homestay/ kampung-stay concept within the Region. During the year, the report for ECER s homestay programme has been formally handed over to the Ministry of Tourism in June 2010 for further implementation. Thirteen existing homestays have been earmarked for upgrading and five new potential homestays have been identified in the study. HALLMARK EVENTS Hallmark events play an important role in ECER s tourism cluster as they involve the hosting of specific, focused events to attract an international audience to ECER. The Region has played host to exciting hallmark events, which include the Monsoon Cup at Pulau Duyung Terengganu and the Royal Pahang Billfish International Challenge in Rompin. Monsoon Cup Dubbed the Formula One of Sailing, the Monsoon Cup Terengganu is one of the most prestigious sailing events in the world. In 2010, it was held from November 30 to December 5 at Pulau Duyung, Terengganu. The event attracted both local and foreign tourists alike, who also took advantage of the various interesting programmes held in conjunction with the competition, including displays of Terengganu s splendid arts and heritage. Royal Pahang Billfish International Challenge The Royal Pahang Billfish International Challenge is an annual off-shore fishing competition initiated in 2004 by the Joran Unit of Berita Harian, a popular Malay language newspaper. In 2010, the competition was held from 6 August to 8 August off the town and serene beaches of Kuala Rompin in Pahang, about 125 km south of Kuantan. One of the objectives of the Royal Pahang Billfish International Challenge is to attract tourists to the state of Pahang, especially those who seek adventure and eco-friendly sports. The Royal Pahang Billfish International Challenge takes advantage of the active migration season of the billfish, such as marlin and sailfish, which pass through the Rompin area from the northern hemisphere to their destination in Australia, between March and September. LIST OF COMPLETED PROJECTS PROJECT Business Strategy, Marketing and Implementation Plan for Pekan Heritage Tourism Development, Pahang. Integrated Environment Management Plan for Lojing, Highland, Kelantan. STATUS BSIP Study Started on 25 May 2009 and completed on 6 Oct Earthworks & Infrastructure Works Phase 1A Started on 14 Oct 2010 with expected completion on 14 Oct Strategic Implementation Plan for Tasik Chini State Park, Pahang. SIP Study Started on 28 Jan 2010 with expected completion on 30 June Package : Tasik Chini Monitoring Station and Equipment Started on 21 July 2010 and completed 10 Feb 2011 Package : Rehabilitation and Conservation Tasik Chini Started on 30 Sept 2010 with expected completion on 29 Oct Contractor was appointed on 29 Sept 2010 and construction works are on-going. 3. Business Strategy, Marketing and Implementation Plan for Coastal Tourism Pantai Sepat, Kuantan, Pahang. BSIP Study Started on 26 Feb 2009 and completed on 3 Nov Business Strategy, Marketing and Implementation Plan for Cherating Coastal Tourism, Pahang. BSIP Study Started on 11 Sept 2009 with expected completion on 30 June Business Strategy, Marketing and Implementation Plan for Teluk Bidara, Coastal Tourism, Terengganu. BSIP Study Started on 10 March 2009 and completed on 28 April Business Strategy, Marketing and Implementation Plan for the Bandar Dungun Mainland Coastal Tourism, Terengganu. BSIP Study Started on 07 Sept 2009 with expected completion on 31 March Business Strategy, Marketing and Implementation Plan for Coastal Tourism Pantai Kampung Penarik and Setiu Wetlands State Park. BSIP Study Started on 25 Aug 2009 with expected completion on 31 July Business Strategy, Marketing and Implementation Plan for Eco-Adventure Lanchang- Kuala Lipis-Gua Musang- Kuala Krai. BSIP Study Started on 12 March 2010 with expected completion on 30 June IEMP Study Started on 7 April 2010 with expected completion on 31 July ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 33

19 OIL, GAS & PETROCHEMICAL Upstream activities in ECER s oil, gas and petrochemical cluster have already been well established, due to the richness of its oil and gas natural resources. The future direction of the cluster seeks to expand the activities in the midstream and downstream sectors to add more value to existing output. 34 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 35

20 Oil, Gas & Petrochemical The oil, gas and petrochemical cluster in ECER is already well established, complete with supporting infrastructure and logistics such as the Kertih Port, Kertih-Kuantan Railway System and centralised utility facilities to better serve the sector. At present, there are two major downstream integrated petrochemical complexes in the Region, namely Kertih Integrated Petrochemical Complex (KIPC) in Terengganu and Gebeng Integrated Petrochemical Complex (GIPC) in Pahang. The existence of KIPC and GIPC in ECER provides a distinct advantage for investors who are interested to venture into midstream and downstream petrochemical activities in the Region. Realising this, ECERDC has established the Kertih Polymer Park (KPP) which would leverage on the readily available feedstock from GIPC and KIPC which are located nearby. Kertih Polymer Park A key initiative in ECER s downstream petrochemical industry is the Kertih Polymer Park (KPP), the first of its kind in the country. Located within the PETRONAS Petroleum Industry Complex (PPIC), KPP will create employment and entrepreneurship opportunities, as well as generate demand for other ancillary services. It will also help attract domestic and foreign investments in plastics and plastics-related industries. KPP s development will be supported by world-class research and development input from PETRONAS Polymer Technology Centre (PPTC), a market-driven technology centre which will enhance customer technical services and product improvement and development for plastics applications. Notable progress has been made at KPP during the year under review. Land and infrastructure development works for Phase 1A and 1B of KPP, as well as design works for Phase 2 of the Park, have already been completed as of 31 December Companies operating at KPP include Hi Essence Cable Sdn Bhd and MIE Copper Sdn Bhd, while two other investors have committed a total of RM165 million to establish operations here. The plug-and-play Park is expected to create 10,500 new job opportunities and draw up to 70 potential investors, with total estimated investments worth RM2.6 billion. More exciting developments are expected to take place in KPP in the near future as it continues to attract the interest of global investors such as CJ-Arkema, a South Korean-French joint venture firm, and Natureworks of USA. CJ-Arkema plans to set up the world s first global-scale methyl mercaptan integrated bio-methionine plant in Asia and ECER has been identified as one of the potential locations for the plant. The project will have a total cost of RM1.98 billion. Natureworks intends to set up a plant to produce Polytactic Acid (PLA) through the fermentation method and KPP has been earmarked as a potential location for the plant. Total investment cost for the project is estimated at RM1 billion. Kertih Polymer Park is expected to create 10,500 new job opportunities by ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 37

21 MANUFACTURING ECER s manufacturing projects will have a significant impact on the Region, creating a hub of industrial development and transforming the lives of the locals by creating new employment and entrepreneurial opportunities. 38 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 39

22 Manufacturing More industry players are expected to establish their presence in ECER s manufacturing cluster as they take advantage of the resources and raw materials that are readily available in the Region. ECER manufacturing initiatives are mainly focused on high-value added activities, covering the whole value chain of upstream, midstream and downstream enterprises within the industries. Kertih Polymer Park The Kertih Polymer Park (KPP) aims to promote the development of plastics and plastics-related industries in ECER by deepening the linkages between the various facilities within the Region and moving up the product value chain. KPP s development will also be supported by world-class research and development input from the PETRONAS Polymer Technology Centre (PPTC), a market-driven technology research and development centre for polymer products and applications. All infrastructure and earthworks carried out for Phases 1A and 1B of KPP were completed in April A contractor was appointed in August 2010 to undertake all infrastructure and earthworks for Phase 1C. The plug-and-play Park is expected to create 10,500 new job opportunities and draw up to potential investors with a total investment value of RM2.6 billion. The development of the Central Marketing Complex (CMC) for PAP commenced in July Upon completion, the CMC will act as the marketing and one-stop centre for PAP, meeting the needs and requirements of existing and future investors. ECER Halal Parks ECERDC s Halal Parks in Pasir Mas and Gambang were planned in response to the increasing global demand for Halal products. Pasir Mas Halal Park s main focus will be on the food industry, while Gambang Halal Park focuses on both food and non-food industries. The infrastructure design for Gambang Halal Park in Pahang was completed in July 2010, followed by infrastructure and earthworks which commenced in November The Park is expected to create new jobs for up to 12,455 people and draw potential investments worth more than RM1 billion once fully occupied. The Business Strategy, Marketing and Implementation Plan for Pasir Mas Halal Park in Kelantan was also completed in July 2010, followed by infrastructure and earthworks in November The Park is expected to create 7,093 new jobs and attract potential investments worth RM600 million when fully occupied. Palm Oil Industrial Cluster The Pekan Automotive Park (PAP) is expected to create 10,580 new jobs and draw potential investments worth RM 4.45 billion by Pekan Automotive Park The Pekan Automotive Park (PAP) is envisioned to become a national and regional hub for car assembly, manufacturing of automotive parts and components, as well as automotive R&D activities. ECERDC aims to position PAP as the eco-friendly, first mover in the production of environmentally-friendly vehicles, which includes electric vehicles, and related technologies, such as battery suppliers, transportation infrastructure and renewable energy providers. The infrastructure design plan for Phase 1 (Package 1) for PAP, Pekan-Peramu, Pahang was completed in July 2010, followed by infrastructure and earthworks which commenced in October It is expected to create new job opportunities for 10,580 people by 2020 and draw potential investors with a total investment value amounting to RM4.45 billion by Aerial view of Pekan Automotive Park. Located in Kuantan Port City, the Palm Oil Industrial Cluster (POIC) will allow investors to take advantage of its proximity to the country s major palm oil producing areas and develop downstream industries yielding consumer products that are especially tailored for the export market. Among the promoted sectors for POIC are surfactant, biodiesel, food, biofertilizer, animal feedmeal, biomass, phytonutrient, polyurethane and other downstream products. 40 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 41

23 The support services provided at POIC will include bulking facilities, SME Park, and a research and development centre. The Business Strategy, Marketing and Implementation Plan for the development of POIC was completed in August 2010, followed by the commencement of infrastructure and earthworks in October the same year. The POIC development is expected to create up to 8,236 jobs and draw RM1.2 billion worth of potential investments once it runs at full capacity. Boat Building & Repair Centre, Kemaman During the year under review, ECERDC undertook a BSIP Report on the Boat Building & Repair Industry in Kemaman, Terengganu. Full development of the industry is expected to create new jobs for up to 6,000 people with potential investments worth RM3.5 billion. Kemaman Heavy Industrial Park The Kemaman Heavy Industrial Park in Terengganu will focus on the development of heavy industries, particularly iron and steel making, as well as downstream activities with port linkages. In 2010, ECERDC undertook a BSIP study on the Kemaman Heavy Industrial Park. Upon completion, the Park is expected to create new jobs for up to 28,400 people and attract potential investments worth RM1.57 billion. Bentong Mixed Industrial Park It will be built around mixed industrial development, especially in the promoted sectors of machinery and equipment, bioproducts, as well as high technology manufacturing of industrial and consumer electronics. The BSIP study for Bentong Mixed Industrial Park was also completed during the year under review. Upon completion, the Park is expected to create job opportunities for 27,505 people with RM1.56 billion worth of potential investments. Kenaf Industry Development ECERDC also initiated a BSIP survey pertaining to the development of the Kenaf industry in Upon completion, the National Kenaf and Tobacco Board (LKTN) will implement the development of the Kenaf industry based on the report outcome. ECER Handicrafts Industry Programme In 2010, the BSIP study for the Handicrafts Industry Programme in ECER was also completed. The study covered a comprehensive and detailed evaluation of the existing handicraft industries in ECER, as well as proposed programmes to bring the local handicraft industry to an international level. LIST OF COMPLETED AND CURRENT PROJECTS 1. Kertih Polymer Park (Phase 1 & 2) in Lot Q, Kertih, Terengganu 2. Pekan Automotive Park in Pekan-Peramu, Pahang 3. Palm Oil Industrial Cluster (POIC) in Kuantan Port City, Pahang BSIP Study Completed in 2009 Earthworks & Infrastructure Works Phase 1A & 1B Completion in April 2010 Phase 1C Infrastructure and earthworks started in August BSIP Study Completed in 2009 Earthworks & Infrastructure Works Central Marketing Complex Design for CMC completed in January 2010 Contractor was appointed in July and construction works are on-going (65% completed) Construction scheduled to be completed in April 2011 Phase 2 Design Infrastructure completed in July 2010 Contractor was appointed in September 2010 Earthworks and infrastructure works started in October 2010 and are on-going. Scheduled to be completed in April 2012 BSIP Study Completed in June 2010 Earthworks & Infrastructure Works Design Infrastructure completed in July 2010 Contractor was appointed in September 2010 Earthworks and Infrastructure started in October 2010 and are on-going. Scheduled to be completed in April Gambang Halal Park, Pahang and Pasir Mas Halal Park, Kelantan BSIP Study On-going; Draft Final Stage Earthworks & Infrastructure Works Pasir Mas Design Infrastructure completed in July 2010 Contractor was appointed in October 2010 Earthworks and Infra started in November 2010 and are on-going. Scheduled to be completed in January 2012 Gambang Design (Infra) completed in July 2010 Contractor was appointed in October 2010 Earthworks and Infra started in November 2010 and are on-going. Schedule to be completed in January Development of Kenaf Industry BSIP Study On-going; Draft Final Report Scheduled to be completed in January 2011 Report will be handed over to LKTN upon completion 6. Handicraft Cluster BSIP Study Completed in November Development of Heavy Industry and Boat Building & Repair Industry BSIP Study On-going (96% completed) Scheduled to be completed in January Mixed Industrial Park, Bentong, Pahang BSIP Study Completed in June 2010 Development of the boat building and repair industry. Handicraft products in the ECER. 9. Development of Free Zones BSIP Study On-going; Interim Report 2 42 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 43

24 AGRICULTURE Agriculture projects in ECER span across the livestock, herbal, crops and fisheries clusters, and are closely linked to ECERDC s Agropolitan projects. 44 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 45

25 Agriculture Agriculture continues to move ahead as one of the key clusters that will drive economic growth in ECER. This involves the strategies of large-scale commercial farming, the use of modern technologies, wider participation by the private sector and a holistic approach in drawing upon the full value chain within the industry. During the year under review, all categories in the Agriculture cluster recorded progress, ranging from Business Strategy and Implementation Plan (BSIP) studies to design development, construction of facilities and completion of projects. Upon completion and operationalisation of all three tiers in the dairy cattle development plan by 2020, up to 1,000 people would be employed and 136 million litres of fresh milk produced for domestic consumption. Boer Goats In 2010, earthworks began for the Kuala Berang Goat Breeding & Innovation Centre in Terengganu. Two main components will complement each other in the implementation of first-tier and second-tier of goat production programme, namely, Nucleus Farm and Multiplier Farms. The Kuala Berang Dairy Commercial Farm is expected to produce 136 million litres of fresh milk for domestic consumption by LIVESTOCK Dairy Cattle The development plan for the dairy cattle project in ECER has been well-implemented and executed in the year The first-tier of Nucleus Farm planned at the Muadzam Shah Cattle Research & Innovation Centre commenced construction in The centre will carry out structured breeding programmes to produce high performance dairy cattle breeds, catering to the local farmers and agro-entrepreneurs. The local farmers will also be educated on best industry practices and how to commercialise the findings of applied research in their farming activities. The centre is expected to produce 1,200 head of cattle breeder by the year The project is undertaken in collaboration with Malaysia Agricultural Research & Development Institute (MARDI), a lead agency in livestock research and development under the Ministry of Agriculture (MOA). To expedite the multiplication of good dairy cattle breeds in the country, two Multiplier Farms have been planned for commercial operations. The Kuala Berang Dairy Multiplier Farm in Terengganu and Tanah Merah Dairy Multiplier Farm in Kelantan will represent the second- and third-tier phases of the Nucleus Farm in the Muadzam Shah Cattle Research & Innovation Centre. Dairy cattle to be bred at the Muadzam Shah Cattle Research & Innovation Centre. The nucleus farm will be commercially operated and managed by the Anchor Company which will conduct an extensive breeding programme for goats and sheep. It will be equipped with several commercial breeding and breed production physical structures including fully intensive goat sheds, multiplier farms, breeding labs, training and technology transfer complex, and an R&D complex. To ensure the sustainability of the project, the Department of Veterinary Services (DVS) and MARDI will collaborate in providing technical inputs and expertise for the project. Upon completion, the centre will produce 5,625 head of breeder goats and sheep by the year 2015, with the numbers increasing substantially over the years. The construction work for the Ulu Tersat Multiplier Farm and Telaga Papan Commercial Farm has been completed in The farms are commercially operated and managed by Terengganu Agrotech Development Corporation (TADC), which will initiate the breeding programme and spearhead the goat production cluster in Terengganu. Boer goats at the Kuala Berang Goat Breeding & Innovation Centre. 46 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 47

26 To accelerate the breeding programme, ECERDC has provided 522 head of full blood Boer goats and 1,442 head of crossbred Boer goats for the programme in The programme is also being integrated with the commercial farm in Besut-Setiu Agropolitan to further leverage on the extended value chain activities to uplift the income of Agropolitan participants. Poultry The Schematic Design development for Maran Fully Integrated Poultry Production Park was initiated in The Park will cater to the entire value chain of the poultry business through the upstream, midstream and downstream phases. Upon its completion in 2014, it will be commercially operated and managed by the appointed Anchor Company with an estimated private investment value of RM250 million. This Poultry Production Park will produce 50,000 metric tonnes of processed poultry products mainly aimed for the halal global export market. It will also create 520 employment opportunities and offer 25 entrepreneur schemes for local contract farmers arrangement. HERBAL & BIOTECHNOLOGY The Herbal & Biotechnology Cluster Development initiated by ECERDC has been announced as the first Entry Point Project (EPP) under the Government s Economic Transformation Programme (ETP) for the Agriculture initiatives. The BSIP has been completed and ten high value herbal crops have been identified and promoted to be commercialised by the private sector. It is envisaged that both plantations could attract private investments of RM66 million in upstream and midstream herbal development. PROMOTED HERBAL CROPS IN ECER Tongkat Ali (Eurycoma longifolia) Kacip Fatimah (Labisia pumila) Dukung Anak (Phyllanthus niruri) Halia (Zingiber officinale) Lemon Myrtle (Backhousia citriodora) Hempedu Bumi (Andrographis paniculata) Mengkudu/Noni (Morinda citrifolia) Misai Kucing (Orthosiphon aristatus) Roselle (Hibiscus rosa sabdariffa) Gaharu/Agarwood (Aquilaria malaccensis) The primary objective of ECERDC s Herbal & Biotechnology Cluster Development is to promote the commercial production of local herbs in a sustainable, competitive and reliable manner to be able to better position itself in both the local and export markets. It is envisaged that the project will create an attractive value proposition to investors, both local and international, due to its economies of scale, uninterrupted supply of quality raw material and involvement in the entire value chain. Two areas have been identified for Phase 1 comprising of ha of agricultural land in Pasir Raja in the district of Dungun, Terengganu and another ha of land in Cegar Perah in the district of Lipis, Pahang. Survey works were completed in 2010 for both sites and construction is expected to commence in The second phase of Commercial Integrated Herbal Plantations (CIHP) development will be carried out at Durian Mentangau in the districts of Dungun, Terengganu and Rantau Manis in the district of Gua Musang, Kelantan. The Herbal Parks will specialise in large-scale production of herbal raw materials for the herbal and biotechnology industries and promote synergy and integration with other industries, such as pharmaceutical and nutraceutical-related products produced in ECER Halal Parks. When completed in 2020, the herbal plantations will create more than 1,244 new employment opportunities and offer 50 entrepreneurship opportunities in the Region. The project will be implemented with the support of the Performance Management & Delivery Unit (PEMANDU) under the Prime Minister s Department. PINEAPPLE PLANTATION Misai Kucing (Orthosiphon aristatus). The Rompin Integrated Pineapple Plantation (RIPP) in Pahang entered its first phase of construction in Located in Kg. Jemari, Rompin, this large-scale commercial pineapple plantation has been chosen as the site for fully integrated pineapple value chain activities such as plantations, central processing and packaging centre, livestock production utilising farm waste as a source of animal feed, as well as downstream activities. A contiguous land area of 5,000 acres has been granted by the State Government of Pahang for the project, which is critical in ensuring full value chain involvement in the development of pineapple production. When fully operationalised by 2020, it will produce 55,000 metric tonnes of fresh pineapple annually and offer employment opportunities to 3,000 workers as well as 50 entrepreneurship schemes under the local contract farmers arrangement. The project will also attract private investment of RM120 million. To ensure the project s sustainability and viability, ECERDC is collaborating with the Malaysia Pineapple Industry Board (MPIB), the lead agency in promoting the pineapple industry in Malaysia, while an appointed Anchor Company will take a lead in spearheading the commercial operations of the plantations for the export market as well as to undertake its social obligation in developing local agro-entrepreneurs and providing employment for local residents. CASSAVA PLANTATION A BSIP was initiated in 2010 for the development of a Commercial Food Industry Plantation (CFIP) in ECER. As an important crop that is significantly being used as a raw material in the manufacturing, food-based and biotechnology-related industrial clusters, cassava has been identified and promoted in the development of CFIP. It is envisaged that 10,000 hectares of land will be developed and planted with cassava in the Region and this could be achieved through strategic collaborations with commercial plantations operated by the Anchor Company, and satellite farmers as contract out-growers through the contract farming arrangement. The project is expected to create 3,000 job opportunities by Demand for cassava starch in the Region is expected to increase with potential foreign investment in the further downstream manufacturing of cassava starch-based products that are used to produce amino acids for animal feed and polyols for food ingredients, which will be located within ECER s Industrial Zones. The entire value chain of the cassava starchbased industry development could attract a substantial private investment of RM3.2 billion. FISHERIES MD2 pineapple. Fish Hatchery & Fish Seed Marketing Centre A Detailed Design was initiated in 2010 for a Freshwater Fish Hatchery & Fish Seed Marketing Centre in Raub, Pahang. It will be a vertically integrated freshwater fish hatchery primarily designed to produce high-quality tilapia fry and fingerlings, and act as a breeding centre to undertake structured breeding and traceability programmes for freshwater fish broodstock. 48 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 49

27 The Centre will produce 20 million tilapia fish fry mainly to support the highly concentrated land-based aquaculture activities in the Region, as well as large scale cage-based aquaculture activities in Tasik Kenyir, Terengganu. By 2020, the Centre is expected to employ up to 85 staff and involve up to 15 contract out-growers to operate the commercial scale nursery as contract growers. Similarly, a Detailed Design was initiated in 2010 for the Merchong Marine Fish & Shrimp Hatchery and Marketing Centre in Pekan, Pahang. Upon completion, the high-tech hatchery, using the state-of-the-art Recirculation Aquaculture System (RAS), will produce 10 million high-quality tiger grouper and seabass fry, as well as 50 million post-larvae shrimp for the domestic markets. It will employ up to 85 workers and work with up to 15 out-growers by Collection, Processing and Packaging Centre (CPPC) & Integrated Fish Processing Parks During the year under review, a Detailed Design was initiated for the Pengkalan Kubor Fish Collection, Processing and Packaging Centre (CPPC) in the district of Tumpat, Kelantan. The project represents the third-tier strategy in the fisheries industry value chain, encompassing downstream processing, packaging, marketing and distribution activities mainly to accommodate the fish-based cottage industry. The fish-based products from this venture will comply with HAACP, GMP and related hygiene requirements, thus upgrading the Centre s market capabilities in penetrating the global halal export market. It is expected to employ up to 40 people by An Interim Report for the Business Study & Implementation Plan (BSIP) for the development of the Tok Bali Integrated Fisheries Park (TBIFP) in Pasir Puteh was completed in November The plan is to develop Tok Bali into an integrated fisheries hub and processing centre as well as one of the premier marine eco-tourism attractions in the East Coast. Ten flagship activities have been identified and focus will be given to leverage on the Joint Development Strategy (JDS) for Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT). This project will employ up to 155 people by Overall planning of TBIFP will take into consideration the Tok Bali Supply Base Terminal project initiated by the State s Government which is located within the vicinity of the development. This coordination and venture could bring private investment of RM2.9 billion to the projects. The Detailed Design for the Kuantan Fish Processing Park (KFPP) was completed in The first phase of construction will be carried out by June Located in Tanah Putih, Pahang and within the vicinity of the LKIM Fish Landing Jetty, it will support the downstream activities of the fish-based processing industry leveraging on the high availability of raw material such as highquality marine fish capture and aquaculture fish produce, targeting the domestic and international cold-storage networks and domestic distribution channels. The Park will employ up to 150 people and work with up to 15 contract manufacturers and vendors by Many of the projects in the Agriculture cluster draw in the people in the vicinity, or through settlers in relocation programmes, to participate in the new ventures. This is part of the social development objective of ECER, providing employment and entrepreneur opportunities that help raise income levels and eradicate poverty. 50 ECERDC 2010 ANNUAL REPORT PROGRESS OF PROJECTS NO. PROJECTS 1. Pusat Penyelidikan dan Inovasi Lembu Muadzam Shah, Pahang. 2. Pusat Pembiakan dan Inovasi Kambing, Kuala Berang, Terengganu. 3. Pembangunan Ladang Pengganda Lembu Tenusu, Kuala Berang, Terengganu. 4. Pembangunan Ladang Multiplier & Ladang Komersial Kambing, Ulu Tersat & Telaga Papan, Terengganu. 5. Taman Pengeluaran & Pemprosesan Bersepadu Ayam, Maran, Pahang. 6. Taman Pengeluaran Bersepadu & Pemprosesan Sarang Burung Walit, Pekan, Pahang. 7. Pusat Pengeluaran & Pemasaran Benih Ikan dan Udang Marin, Merchong, Pahang. 8. Pusat Pengeluaran & Pemasaran Benih Ikan Air Tawar, Raub, Pahang. 9. Taman Pemprosesan Ikan, Kuantan, Pahang. 10. Taman Perikanan Bersepadu Tok Bali, Kelantan. 11. Pusat Pengumpulan, Pemprosesan & Pembungkusan (CPPC) Produk Berasaskan Ikan, Pengkalan Kubor, Kelantan. PROJECT STATUS Construction is at 34% work progress and is expected to be completed in Nov Construction is at 8% work progress and expected to be completed in Sept Detailed Design consultant appointed. Project is completed and commenced operations in Nov BSIP study was completed in March Detailed Design consultant appointed in Sept 2010 and expected to be completed in March BSIP consultant appointed in July 2011 and study is expected to be completed in Dec Detailed Design consultant appointed in Feb Construction work will commence in July 2011 and expected to be completed in July Detailed Design consultant appointed in July Construction work will commence in August 2012 and expected to be completed in Nov Detailed Design consultant appointed in May Construction work will commence in June 2011 and expected to be completed in Sept Detailed Design consultant appointed in Sept Construction work will commence in Aug 2011 and expected to be completed in Aug Ladang Bersepadu Nanas, Rompin, Pahang. Construction is at 5% work progress and is expected to be completed in Dec Taman Herba & Bioteknologi, Pasir Raja, Dungun, Terengganu. 14. Taman Herba & Bioteknologi, Cegar Perah, Lipis, Pahang. 15. Pembangunan Ladang Komersial Industri Makanan (Cassava) di ECER. BSIP consultant appointed in April Interim report has been presented and final report together with the Laporan Cadangan Pemajuan (LCP) will be completed in July BSIP study was completed in Aug Detailed Design consultant appointed in Feb Construction work will commence in Sept 2011 and expected to be completed in March BSIP study was completed in Aug Detailed Design consultant appointed in March Construction work will commence in Oct 2011 and expected to be completed in April BSIP consultant appointed in Feb Interim report has been presented and final report will be completed in July ECERDC 2010 ANNUAL REPORT 51

28 Agropolitan The Agropolitan project aims to eradicate poverty in ECER and improve the standard of living for its participants, which is in line with the Government s New Economic Model (NEM). This integrated socio-economic project brings about positive changes in their lives through allocation of land for agriculture-related activities, supported by processing and marketing activities and resettlement of poor families. Pekan Agropolitan The Pekan Agropolitan project in Pahang is currently being implemented in three locations, namely Batu 8 in Lepar, Runchang and Tanjung Batu respectively. At Batu 8 in Mukim Lepar, 100 participants moved into their new houses built by ECERDC in September Prior to moving into their current homes, all participants went through induction training to help them adjust to the new surroundings, occupation and lifestyle. Sheep rearing is the primary income generating activity in this location, through which the participants are expected to enjoy a steady income of RM1,000 monthly. For this purpose, 60 Animal Production Units (APU) for Dorper sheep are being built in Batu 8, of which 30 APUs were already completed as at the end of 2010, while the rest will be ready by June Runchang is the site for the Pekan Agropolitan pilot project, which was launched by the Prime Minister of Malaysia, YAB Dato Sri Mohd Najib Tun Razak, in The pilot project involves 30 Orang Asli participants and has been in operation since August Twenty-four new APUs are being built in Runchang since August 2010, in addition to the existing 11 APUs. The new APUs are expected to be ready by December The Pekan Agropolitan project in Runchang has already proven its success by providing a steady monthly income of RM600 to the participants, who are working a minimum of four hours a day. Their allowance is paid through the participants personal bank account, which has helped encourage a healthy savings habit among them. Within a year of the project s launch, the first Pekan Dorper Auction was held in Runchang on 8 August, 2010 and received positive response from the public. The auction successfully generated sales worth RM265,550 and part of the profit from the sale was shared among the participants. 100 participants of Pekan Agropolitan in Lepar were relocated to their new houses in September Animal Production Units (APU) for Dorper sheep. New homes for the 100 participants of the Pekan Agropolitan project in Batu 8, Mukim Lepar. 52 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 53

29 ECERDC s CEO Y. Bhg Dato Jebasingam Issace John during a South Kelantan Agropolitan (SKA) project site visit in Gua Musang. New homes for the 10 pilot participants under the SKA. Cocoa plantation under the SKA. Tanjung Batu, Mukim Bebar is the latest site under the Pekan Agropolitan project. Construction of 213 houses by ECERDC for the project participants commenced in September 2010 and is expected to be completed by December Development works have also begun on a 1,200-hectare oil palm estate in Tanjung Batu, as cultivating the crop will be the primary activity for Agropolitan participants in this location. South Kelantan Agropolitan Under the South Kelantan Agropolitan (SKA) project in Rantau Manis, Gua Musang, 10 pilot participants had already moved into their homes in May They are now earning a steady income of up to RM1,000 a month by working at the oil palm plantation and undertaking cocoa planting activities. The participants and their families have also benefited from the special training and programmes provided by ECERDC, such as the SINAR ECER programme and cocoa planting courses. In March 2010, ECERDC began building 350 new houses in Gua Musang for the relocation of participants under the SKA project. The houses are expected to be ready by June The development in SKA also includes the construction of other facilities such as surau, multipurpose hall, shophouses, office building and kindergarten for the benefit and convenience of the participants. Oil palm plantation is the primary income generating activity for SKA. In 2010, a total of 1,500 hectares of land had been cultivated with oil palm under this project, which includes the rehabilitation and re-planting of oil palm plantations in Rantau Manis, Jeram Tekoh, Sungai Asap and Renok Baru. The SKA will not only benefit the project participants but also the surrounding communities through the upgrading of the Water Treatment Plant in Limau Kasturi, which will cater to the water needs of SKA and its nearby areas. The water treatment plant capacity will be increased to 5.9 million litres a day from 1.9 million litres per day. The construction work was 70% completed as of end-december 2010 and is expected to be ready by June Besut-Setiu Agropolitan At Besut-Setiu Agropolitan, site clearing began in September 2010 for the construction of 100 homes and 50 APUs for project participants, as well as public infrastructure and amenities such as surau, community hall and kindergarten. The primary income generating activity for Besut-Setiu Agropolitan (BSA) will be Boer goat rearing, through which the participants are expected to receive a monthly income of RM1,000. ECERDC s Agropolitan initiative has received strong support from all the parties involved, including the respective State Governments which have granted land approvals for the projects. ECERDC has appointed FELDA as the Implementing Agency for Pekan Agropolitan project, while the South Kelantan Development Authority (KESEDAR) is the Implementing Agency for SKA. The role of the Implementing Agencies is to manage the Agropolitan participants and the economic activities carried out under the project. ECERDC also collaborates with various Management Agents such as the Malaysian Cocoa Board and Universiti Malaysia Kelantan in implementing secondary economic activities for the Agropolitan projects. LIST OF PROJECTS 1. SOUTH KELANTAN AGROPOLITAN PROJECT Package 1 - QuickWin 10 unit houses Package 2 - Water Treatment Plant Limau Kasturi Package unit houses and public amenities Package 5 - Replanting of Oil Palm (599 hectares) Package 6 - Rehabilitation of Oil Palm (591 hectares) Package 7 - Replanting of Oil Palm (325 hectares) BESUT SETIU AGROPOLITAN 100 houses and 50 Animal Production Units PEKAN AGROPOLITAN Package 1 - QuickWin 10 Animal Production Units Pekan Package houses and public amenities Package 4-1 Animal Production Unit Runchang Package 5-60 Animal Production Units Package 6-24 Animal Production Units Package houses and public amenities Completed Construction Progress: 67% Construction Progress: 16% Replanting Progress: 78% Rehabilitation Progress: 90% Replanting Progress: 2% Construction Progress: 1% Completed Completed Completed Construction Progress: 40% Construction Progress: 20% Construction Progress: 2% 54 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 55

30 DEVELOPMENT The development of human capital is vital in ensuring the successful implementation of ECER projects and in attracting more investments into the Region. 56 ECERDC 2010 ANNUAL REPORTHUMAN CAPITAL ECERDC 2010 ANNUAL REPORT 57

31 Human Capital Development Human capital development initiatives introduced by ECERDC are mainly aimed at preparing the local workforce in ECER to meet the needs of the industries. Playing a dual role as an economic driver and a catalyst for growth in the Region, education is also a key enabler that supports other clusters in ECER such as agriculture, manufacturing and tourism by generating a pool of skilled and capable workers. Programmes such as empower and Suri@Home are also implemented to elevate the income of local residents, while the ECER Entrepreneurship Development Programme (EEDP) is aimed at promoting the growth of ECER s Bumiputra commercial community and Small- and Medium-Enterprises (SMEs). EDUCATION ECER s education initiatives include the ECER Centres of Excellence (COE), KerJaya ECER and empower. ECER Centres of Excellence (COE) ECER is currently the home of several universities namely, Universiti Malaysia Kelantan (UMK), Universiti Sultan Zainal Abidin (UniSZA), Universiti Malaysia Terengganu (UMT), Universiti Malaysia Pahang (UMP), Universiti Tenaga Nasional (Uniten) Muadzam Shah, Universiti Sains Malaysia (USM) Kubang Kerian and Universiti Teknologi Mara (UiTM) in Dungun, Machang and Jengka respectively. Fifteen Centres of Excellence (COE) have been established within five public universities in ECER to fulfill their supporting role to the needs of industries, particularly in the areas of tourism, oil, gas and petrochemical, manufacturing, agriculture, Halal products, wood-based products and biotechnology, and hospitality and tourism management. The following programmes were carried out by the COEs during the year under review: Universiti Malaysia Kelantan (UMK) In 2010, UMK undertook a total of four programmes under the COE initiative, namely: Konvensyen Keusahawanan ECER-Kementerian Pengajian Tinggi (KPT) 2010 This convention was held in March 2010 to promote the objectives and functions of the Centre for Industry-Academia Collaboration (CIAC) and to gather ECER entrepreneurs for networking and knowledge sharing purposes. Launch of KerJaya ECER programme in Pahang. Attended by 250 entrepreneurs and 50 agencies, the convention has created the following impacts: Awareness of the functions of CIAC Matching of innovation/research to industry needs and vice versa Matching of innovation/research to entrepreneurs (BCIC and SME) Training for Pekan Agropolitan Participants The training was conducted from 18 October until 22 October 2010 for 200 Pekan Agropolitan participants and their families in Batu 8, Mukim Lepar to enable them to adjust to their new surroundings, occupation and lifestyle upon their relocation to the Agropolitan site. There were two types of training provided for Agropolitan families: the first was technical training on sheep rearing, which is the primary activity of the project; while the second was aimed at motivating and changing the mindset of the Agropolitan families. ECERDC introduced the SINAR ECER programme to support its Agropolitan projects in Pekan and Gua Musang (South Kelantan Agropolitan). SINAR ECER is a dedicated programme that was designed to stimulate the minds and attitudes of nearly 100 Agropolitan children, who are between the ages of 6 and 12 years. The programme also aims to motivate and inculcate strong values and character among the younger generation who will determine the future of our nation. As of December 2010, a total of 2,645 locals have successfully been employed through KerJaya ECER s Graduate Placement Opportunity (GPO) Programme, Employee Placement Programme (EPP) and the Skills Training Programme (STP). It was also aimed at creating awareness of existing financial and non-financial assistance offered to the entrepreneurs by the relevant government agencies and financial institutions. At the same event, the CIAC and its website were officially launched by the Minister of International Trade and Industry, Dato Sri Mustapa Mohamed. Konvensyen Keusahawanan ECER-KPT Motivational programme for participants of Pekan Agropolitan project. 58 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 59

32 SINAR ECER Modules and Goals SINAR ECER MODULE 1 Exposure MODULE 2 Education MODULE 3 Expansion In 2010, SINAR ECER was implemented in Pekan Agropolitan and South Kelantan Agropolitan (SKA) from the months of July to December. Ninety-five children took part in the programme, of which 69 were from Pekan Agropolitan (Runchang) while another 26 were from South Kelantan Agropolitan (Gua Musang). Develop Greater Focus & Self- Confidence The impact of the programme is already evident, as reflected in the Ujian Penilaian Sekolah Rendah (UPSR) 2010 results which saw Juyana Teor Bak Song of Sekolah Kebangsaan Runchang scoring 5A s in the exam. Juyana, a SINAR ECER participant, created history by becoming the first ever Orang Asli child from Runchang to achieve straight A s in the UPSR. The Development of Aquaphonics System in South Kelantan Agropolitan (SKA) During the year under review, the Pilot Development of the Aquaphonics System was carried out in South Kelantan Agropolitan by 10 Agropolitan participants with the aim of increasing their household income. Become Motivated and Outcome Oriented Building Foundation Learning Skills Achieve Excellent Grades Become Mature & Responsible Strive for Excellence in their Lives Launching Ceremony of the Pahang Biodiversity-Biotechnology Strategic Action Plan. UiTM Machang UiTM Machang embarked on a different mode for its batik development programme in 2010 by engaging a foreign partner, namely Shuxing Silk Sichuan, a textile producer from Chengdu, China. Under the collaboration, Shuxing Silk Sichuan trained six industrial trainees from ECER in Chengdu for a period of six months. Upon completion, the industrial trainees will be appointed as mentors to further train six mentees in the incubator established in UiTM Machang. The mentees are chosen among local youth and single parents. While in Chengdu, the industrial trainees were exposed to design and printing techniques, colour coordination and the formulation of five prototypes comprising kimono, sari, scarf, shawl and cloth yard. This programme also involved exposure to selected mentors and their products at the Shanghai Fair in China, which promotes textiles from all around the world. Commercially, aquaphonics is still in its infancy, but as the technologies relating to aquaphonics farming are constantly being developed and refined, it has the potential of becoming a more efficient and space-saving method for rearing fish and growing vegetables or even herbs. Universiti Malaysia Kelantan undertook the project by educating and training the SKA participants on the technology and skills related to modern aquaculture and agriculture farming. The university also encouraged the development of a selfmotivated and self-reliant community, which will help increase local employment opportunities particularly in catfish and vegetable production, as well as in other related aquaculture and agriculture industries. Universiti Sultan Zainal Abidin (UniSZA) Children showing keen interest in the Sinar ECER programme. UniSZA was appointed by ECERDC as the Centre for Halal Certification and Herbal Registration in The Centre serves several main functions, namely: The services provided by the Centre include consultation support, product testing, training, workshops and seminars. In 2010, the Centre provided its services to about 60 SMEs and 300 individuals in the Region. To further elevate the standard of its services, the Centre is currently in the process of obtaining the accreditation of the laboratories from Standard Malaysia, which is expected to be completed by KerJaya ECER As part of its Education initiatives, ECERDC has developed the KerJaya ECER programme that was originally formulated to mitigate unemployment problems caused by the previous global economic crisis. The programme consists of the Skills Training Programme (STP), Graduate Placement Opportunity (GPO) Programme and Employee Placement Programme (EPP). ECERDC launched KerJaya ECER in Terengganu in January 2010 and in Kelantan in March the same year, following the successful launch of KerJaya ECER in Pahang in December KerJaya ECER is part of the RM7 billion economic stimulus package announced by the Government in November 2008, of which RM40 million has been allocated for skills training within ECER under the Ninth Malaysia Plan. The STP saw 13 Training Providers providing training to 1,771 trainees throughout the year, of whom 1,268 have successfully secured job placements. This represents 72% of the total Registration trainees who graduated, thus exceeding the 70% target rate. The training conducted by To assist the SMEs in meeting the Halal and HACCP requirements in order to market their products the Training Providers include Product Development & Engineering, Automotive Medium & Large Die Design Engineering, Plant Design Automation Programme for Oil & Gas Industry, Process Plants Safety & Health, Fibre Optic & Mobile Communication Network, Wireless & Data Communication, and Welding Skills Enhancement Programme, among others. The trainees were hired by companies such as Mydin, Genting Highlands Resort, Perwaja Steel Sdn Bhd, Hyatt Resort Kuantan, Primula Beach Resort Terengganu, Vistana Kuantan and Sanctuary Beach Resort Kuantan. 60 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 61

33 As for GPO and EPP programmes, ECERDC has successfully placed 1,379 graduates and non-graduates within various companies in ECER, exceeding the target number of 1,350 placements. These companies include HICOM Automotive Sdn Bhd, Hi Essence Cable Sdn Bhd, Atostech Fibreglass Sdn Bhd, Koperasi Setia Maju Kuala Terengganu, Sri Baru Fast Automobile Sdn Bhd, Smart Tech Innovative Sdn Bhd and Watson s Personal Care Store Sdn Bhd. empower Bentong empower is another education initiative by ECERDC which was launched in Bentong Pahang in July 2010, as part of the Council s efforts to boost the academic achievement and employability of the locals, as well as creating entrepreneurship opportunities for them through the skills training provided. The idea for empower was originally mooted by YAB Dato Sri Diraja Haji Adnan Bin Haji Yaakob, the Menteri Besar of Pahang who had requested ECERDC to look into the development of the Indian community in Pahang and identify relevant programmes that can help enhance the socio-economic status of the community. This original idea was then expanded to include all races in line with the 1Malaysia spirit. empower uses a community development approach in realising its objectives. This approach has several distinguished features in terms of: guidance Giving and motivation in changing the participants mindset and improving their income Training modules are preceded by a survey to determine the needs and interests of the community and participants Flexible teaching method and timetable Syllabus is to cater to participants comprehension level and according to the scenario within the community Bringing the training facilities to the participants/community. There were two types of programmes introduced for the people of Bentong, Pahang, comprising Academic Training for 400 students and Skills Training for 600 adults. empower has already shown positive impact in terms of improvement in the academic area, whereby 163 UPSR students and 119 PMR students among its participants managed to score 100% passes in all subjects taken. They have also exceeded ECERDC s set targets, as reflected below: Examination & Actual No. of Students Targeted No. of Students Minimum Grade & Percentage (%) & Percentage UPSR (min. 2A & 3B) 67 students (41%) 17 students (10%) PMR (min. 3A & 4B) 16 students (13%) 12 students (10%) As of 31 December 2010, while the Skills Training courses were still ongoing, a total of 180 adult participants have managed to be placed within companies in ECER or embarked on their own entrepreneurship ventures. They are now earning additional incomes of between RM800 and RM1,000 per month, with some getting even more. SURI@HOME The Suri@Home Programme is part of ECERDC s social development programme which is specially tailored for the women of ECER. This programme focuses on home-based activities or businesses, such as handicraft-making as well as agriculture-related and product processing as the primary activity for the target group, to help them earn a regular income. Among the projects that have already started are Mushroom Farming and Vermicompost in Kelantan; Tenun Weaving in Pahang; and most recently, Songket Weaving in Terengganu with a total of 60 participants. Fifteen participants are currently taking part in mushroom farming in Kota Bahru, Kelantan. The Vermicompost project is currently being implemented in Bachok, with the participation of six women from several villages surrounding the area. Tenun weaving projects in Pahang are currently being implemented in Kuantan and Pekan with 14 participants taking part in this highly artistic activity. For Songket weaving, three participants in Kuala Terengganu area have been chosen from the e-kasih database to participate in the programme. The Suri@Home Programme has helped reduce the level of unemployment among the local women and it has also provided employment opportunities for those with mobility constraints, while increasing their families household income as a whole. These women are now earning additional incomes of about RM700 a month. ECER ENTREPRENEURSHIP DEVELOPMENT PROGRAMME (EEDP) ECER Entrepreneurship Development Programme (EEDP) was created to develop and promote a competitive Bumiputera Commercial and Industrial Community (BCIC) and Small- and Medium-Enterprises (SME) via collaboration with related Government agencies as well as the private sector. Two pilot projects have been implemented in Mersing, Johor under EEDP, namely the Vendor Development Programme-Sewing Project and Boat Building and Repair Centre (BBRC). The projects involved the partnership between ECERDC and GIATMARA Sdn. Bhd, with the support of the Mersing District Office. Vendor Development Programme-Sewing Project Under ECERDC s Vendor Development Programme, the pilot Sewing Project was launched with the involvement of 20 participants who were chosen from among Mersing residents and subsequently trained to meet tailoring orders. The Vendor Development Programme-Sewing Project sees the participation of Koperasi Usahawan Giatmara Johor (Ko-GIAT Johor) as the pilot vendor that undertakes the production and marketing of products from Terminal Jahitan, the sewing centre which is the fruit of ECERDC s involvement. ECERDC provided the initial capital for the set-up of the sewing centre. Graduate Placement Opportunity programme. Initiatives under the KerJaya programme. Training modules under empower programme. 62 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 63

34 STATUS OF HUMAN CAPITAL DEVELOPMENT PROJECTS IN ECER AS OF END DECEMBER 2010 No. Projects/Programmes Status 1. Skilled and Re-skilled Training Programmes & Placements (STP) Completed: 1,771 (100%) trainees completed the training courses. 1,268 (72%) of the graduated trainees have secured work. 2. Graduate Placement Opportunity Programme (GPO) Completed: 1,089 (109%) from the targeted placement of 1,000 have secured work. 3. Employee Placement Programme (EPP) Completed: 1,089 (109%) from the targeted placement of 1,000 have secured placement of work. 4. empower Programme Phase 1 - Bentong On-going: The training programmes are targeted to be completed by February 2011 and followed by placement process for 3 months (May 2011). As of Dec. 2010, the progress of placement was 184 trainees (equivalent to 38.3% of 480 placements). 5. Suri@Home On-going: This programme is targeted to end by 2013 with a total of 60 participants, particularly women in the rural landscape, embarking on economic activities. As of December 2010, 38 participants were enrolled in this programme and have made an additional income of RM700 per month. Through this project, the Vendor Company with the guidance of GIATMARA, will be able to ensure sustainable production, while the participants will receive an additional monthly income of RM700. Through their involvement in this project, the participants are also exposed to the latest designs, marketing and branding techniques in clothing products, with the aim of creating more entrepreneurs among them. Boat Building and Repair Centre (BBRC) EEDP s Boat Building and Repair Centre (BBRC) project in Mersing is currently being undertaken by ECERDC in partnership with GIATMARA Sdn. Bhd, which has been appointed as the Implementation Agent for the project. GIATMARA is responsible for running the centre which will see participation from local entrepreneurs, while providing the expertise and services for the building and repair of boats. Two local entrepreneurs with the required expertise in this field will be running their business at BBRC under the supervision of GIATMARA. BBRC is expected to serve the boat owners and fishermen in Mersing, as well as its surrounding areas. At the same time, GIATMARA will be managing the training centre for GIATMARA trainees, to help create job opportunities in this sector SINAR ECER 2010 Development of Aquaphonics System for 10 Agropolitan participants in South Kelantan Agropolitan Development of Training and Research Centre for Livestock in Universiti Malaysia Kelantan (UMK) Motivational and Technical Training for Agropolitan Participants (Pekan Agropolitan, Lepar) Industrial Skills for Enhancement Training and Development of textile-based products and batik for youth and single parents in ECER. Completed: A total of 95 Agropolitan children (100%) in South Kelantan Agropolitan (SKA) and Pekan Agropolitan (PA) completed the programme. On-going: The construction of the system is still on-going and is expected to provide extra income to participants from the production of vegetables and fish. On-going: 50% of the development of the centre has been completed. Planning for the development of Small Ruminant Operating Procedures (goat and sheep) was underway. Completed: A total of 200 participants and their dependants completed the training in October On-going: A total of six trainees (100%) completed their training in Chengdu, China. Planning for the development of a Batik Incubator Centre is undertaken to train another six industrial trainees (mentor-mentee) to produce batik. 11. Vendor Development Programme (VDP) Mersing-Sewing Project Pilot Project EEDP No.1 On-going: The VDP Sewing Project commenced operations on 1 November 2010 and will end by 30 October 2013 (3-year project). There are 15 participants (workers) involved in the project (75%) as opposed to the targeted 20 participants from the e-kasih list. 12. Boat Building and Repair Centre (BBRC) Mersing Pilot Project EEDP No.2 On-going: The construction of BBRC is at 53% progress. The construction work has been scheduled for completion by 30 April The operation of BBRC is scheduled in July ECER Entrepreneurship Development Programme (EEDP) On-going: The implementation of EEDP has been approved by the ECER Development Council on 16 December EEDP offers two types of packages, namely access to financial assistance and soft development such as training, R&D and marketing to entrepreneurs of ECER. The arrangement with Financial & Strategic Partners is scheduled for completion by June EEDP is expected to be implemented by July Menteri Besar Johor Dato Haji Abdul Ghani bin Othman being briefed on the Boat Building and Repair Centre project. 64 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 65

35 ENABLING SUSTAINABLE DEVELOPMENT: ENVIRONMENT In carrying out the projects in ECER, special emphasis is being placed on conserving the environment to ensure sustainability for years to come. This is to maintain the integrity of the natural environment alongside development for the benefit of future generations. 66 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 67

36 Enabling Sustainable Development: Environment The East Coast Economic Region (ECER) is rich in biological resources comprising large expanses of forests, wetlands and thriving marine ecosystems. The Region is endowed with rugged terrain and scenic heritage and it is also home to unique species which cannot be found elsewhere. ECER S ENVIRONMENTAL POLICY ECERDC places the utmost importance on safeguarding the Region s environment quality and resolutely subscribes to the principles of sustainable development of stewardship to the environment, contribution to society and the creation of economic value and progress. The Environmental Strategies drawn for ECER are based on the Fourth Thrust of the National Mission, which is to improve the standard and sustainability of the quality of life, and to ensure that the development activities in the Region are undertaken in a sustainable manner. As such, the natural resources in the ECER will be utilised wisely within the framework of socio-economic viability so as to meet the needs of the present society, while respecting the ability of the future generations to meet their needs. ECERDC is committed to:- Maintain and preserve areas of environmental importance and of high conservation value and to realise their own distinctive socio-economic potential so as to facilitate learning and appreciation of these sites and ensure that natural resources are not depleted Establish and implement a conscientious system of environmental management for effective protection of the environment in all our project initiatives Identify and adhere to all environmental laws, regulations and contractual requirements applicable to our projects Advocate the adoption of clean technologies to promote optimisation and sustainability in the use of natural resources impact at all our project sites Cultivate environmental awareness amongst all employees and provide adequate training on matters pertaining to environmental protection and management. ECERDC will take the necessary measures to ensure that sufficient resources are available for pursuing the above commitments. The Council will also ensure that all its employees, consultants, contractors, sub-contractors and businesses abide by all legal requirements and implement all possible measures to alleviate environment impacts associated with our projects. ECERDC S ENVIRONMENT INITIATIVES Tasik Chini Rehabilitation and Conservation During the year under review, a Strategic Implementation Plan (SIP) study was carried out for Tasik Chini State Park which will undergo integrated rehabilitation and conservation works. Recognised by UNESCO as the first biosphere reserve in Malaysia, Tasik Chini has been identified as one of the ecotourism attractions in ECER. Lojing Highlands Integrated Management Plan ECERDC has undertaken the Integrated Management Plan study for Lojing Highlands in Kelantan, which had been identified as a Special Management Area under the National Physical Plan and the ECER Master Plan. This study aims to produce the Environmental Management Guidelines for major sectoral activities in the area, particularly forestry, agriculture, tourism, urban development and infrastructure. Four principles will guide the study team throughout the plan preparation. They will also guide the process under all circumstances in making evaluations and planning recommendations and actions, including the planning strategy, development proposals and mitigating measures. The guiding principles are: Delivering sustainable land use planning and development Protecting heritage areas and avoid disrupting ecological stability Promoting active local participation and social inclusiveness. The study has adopted an issue-solving approach based on river catchment basins. Effective planning in the environmentally sensitive Lojing Highlands area involves both top-down and bottom-up approaches, as well as cross-sectoral integration. In preparing the IEMP, a central feature is the application of a discursive and consultative approach with all relevant public agencies and interested stakeholders, especially the local Orang Asli communities, at significant stages throughout the plan-making process to enhance urban governance and participatory planning. Kampung Penarik/Setiu Wetlands The Kampung Penarik Mainland Coastal Tourism Development and the Setiu Wetlands State Park have been identified as a potential sustainable economic catalyst through the creation of innovative tourism activities within the area. These tourism activities will be packaged and promoted with an enforceable Management Plan in managing the Setiu Wetlands State Park, which is regarded as an environmental and economic asset for the state of Terengganu. The Setiu Wetlands State Park is envisioned to become the premier wetlands in the East Coast, which will be supporting sustainable economic development for Terengganu. This development concept is based on conservation which would attract tourism into the area, with culture and nature-based tourism being the main thrusts of the development proposal. Hence, it would balance between the needs of the environment, and the economic and social needs of the people living in the area. The study area identified and recommended for this project covers 1,025 square km. Three categories of internal management zones were created for Setiu Wetlands State Park, namely Strict Protection Zone which encompasses sites of highest biodiversity value in the park, River Restoration Zone which focuses on rehabilitation of the largest rivers in the park, and Sustainable Use Zone which identifies areas for sustainable economic development and community use. 68 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 69

37 Transportation & Infrastructure Improving the Region s connectivity and infrastructure has been a key part of ECER s development strategy. Infrastructure projects covering master plans, roads, seaports, water supply, coastal protection and rail are currently in various stages of implementation. KUANTAN PORT CITY DEVELOPMENT & KUANTAN PORT EXPANSION Kuantan Port City (KPC) has been identified as one of the major Focus Nodes for the ECER Special Economic Zone (ECER SEZ). It will be developed as a vibrant and dynamic regional capital and will establish itself as the eastern gateway of Malaysia. Once completed, the KPC development is expected to create new jobs for up to 44,000 people by The KPC Integrated Master Plan was completed in the first quarter of 2010 and is currently being incorporated into the Kuantan Local Plan. The Master Plan includes several major land use components, namely the expansion of Kuantan Port, as well as the development of new areas for industries, residences, commercial, tourism, institutional and open spaces. Kuantan Port expansion will include the construction of a new deepwater port that will allow the berthing of larger and more modern vessels and promote transshipment activities. The expanded Kuantan Port is expected to be the catalyst for the development of the hinterland region. During the year under review, a financial study was carried out to determine the most viable port model. Terengganu State ICT Centre A BSIP Study was commissioned for the proposed Terengganu State ICT Centre at the end of The objective of the study is to determine the suitability of the site and viability of the project, and also to develop the strategies to promote it as an ideal ICT centre. The development of Terengganu State ICT Centre will be a catalyst that will drive the ICT industry growth in Terengganu and ECER. The study is expected to be completed in the third quarter of Kuala Terengganu City Centre During the year under review, the Integrated Master Plan study for Kuala Terengganu City Centre (KTCC) was in its final stage. KTCC development will be the catalyst project that will spur the development of tourism in the state of Terengganu. The project is expected to create up to 82,591 jobs by 2020 and 105,128 new employment opportunities by From the Integrated Master Plan of KTCC, Muara Utara and Muara Selatan, the reclaimed pieces of land strategically located at the estuary of Sungai Terengganu, have been identified for immediate development. The Muara Utara and Muara Selatan Layout Plan was approved by the Terengganu State EXCO in November. Subsequently, a detailed design study of the infrastructure works for the area will commence in April 2011 for implementation. Water Works The immediate projects identified in the KPC Integrated Master Plan include the upgrading of the water supply. The construction of a 2-km water pipeline to improve the water quality in Gebeng Industrial area was completed in the first quarter of To improve the water supply to Gambang and Kuantan areas, the construction of Panching Water Treatment Plant (Package 1) commenced in August 2010 and is anticipated to be completed in August The design works for the R2 and R8 new water storage tanks to supply uninterrupted water to the Gebeng Industrial Area was initiated in the first quarter of 2010 and are expected to be completed by the second quarter of The design consultant for Ganchong Water Works was appointed in May, with design works expected to be completed in mid 2012 and construction scheduled for early Road Works To improve the traffic flow to Kuantan Port, the existing FR3 road from Jabor-Jerangau Interchange to Sungai Ular Interchange will be upgraded to two lanes. The design for the road was completed and handed over to the Public Works Department (JKR) in May for implementation. The construction of KPC Port Link Road, complete with a new interchange at the East Coast Expressway Phase 2 will provide a high speed and reliable link from the industrial areas in Terengganu and Kelantan to Kuantan Port. The design works are currently being carried out and are expected to be ready by the end of ECERDC has also been given the task of providing the external infrastructure works for Tanjung Agas Oil, Gas & Logistics Industrial Park, such as Ganchong Water Works and Pekan Coastal Road & Bridge. The design consultant for Pekan Coastal Road & Bridge was appointed in March and design works are expected to be completed by the end of The design for road improvement works from Sg. Emas to Kampung Peta in Taman Negara Endau-Rompin has been completed and the construction works will commence in The Detailed Design for the Southern Package from Kahang to Sg. Emas will also be completed in The improvement works when completed will provide uninterrupted access into the national park as the road will be raised above the flood level. Following the completion of the design for the Mersing to Kg. Sedili Besar New Coastal Road, the land acquisition exercise was initiated and is targeted to be completed in The upgrading of the Central Spine Road (CSR) from Kuala Krai to Simpang Pelangai into a two-lane dual carriageway was also in progress, with the implementation of two construction packages. Once completed, the CSR would spur the growth of the small towns along the road, thus improving the socio-economic conditions of the local residents. Once completed, the Kuantan Port City development is expected to create 44,000 new jobs by ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 71

38 To ease the daily traffic congestion, the existing Bukit Kuang Bridge would be replaced with a four-lane bridge. Construction works for the new bridge started in July 2010 and are expected to be completed by Other Infrastructure Works The feasibility study for the East Coast Rail Route was also ongoing and is expected to be completed by Discussions with various stakeholders were held to confirm the alignment of the rail route from Kuala Lumpur to Tumpat. Due to the serious erosion along the Teluk Lipat coastal area in Dungun, a design for coastal protection works was initiated. The design will be completed in 2011 for construction. STATUS OF TRANSPORTATION & INFRASTRUCTURE PROJECTS IN ECER AS OF END-DECEMBER 2010 No. Projects Status as of 31 December KPC Integrated Master Plan Completed and handed over to Majlis Perbandaran Kuantan for incorporation into the local plan 2. KTCC Integrated Master Plan 80% completed 3. Terengganu ICT Centre BSIP Principal consultant for BSIP appointed end-september 4. 2 km Water Pipeline Works Completed ahead of schedule in February 5. Panching Water Treatment Plant (WTP) Construction for Package 1 6. R2 & R8 Water Storage Tanks Detailed Design consultant appointed 7. Tg. Agas Infra-Ganchong WTP Detailed Design consultant appointed 8. Tg. Agas Infra-Coastal Road & Bridge Detailed Design consultant appointed 9. KPC Port Link Detailed Design consultant appointed 10. KPC FR3 Road Detailed Design is ongoing and was handed over to JKR in May 11. Mersing-Sedili New Coastal Road Detailed Design is ongoing 12. Kahang-Endau/Rompin Road Upgrading Detailed Design for Northern Package completed; Detailed Design for Southern Package is ongoing 13. Central Spine Road (CSR) Handed over to JKR in 2009 Two (2) construction packages were awarded 14. Bukit Kuang Bridge Handed over to JKR in 2009 Construction started July 15. Teluk Lipat Coastal Protection Works Detailed Design is ongoing 16. East Coast Rail Route (ECRR) Feasibility Study is ongoing 17. KPP Phase 1 Construction of Phase 1 commenced and ongoing REAL ESTATE Property and construction-related activities are vital in the Region to ensure sufficient supply of residential, leisure, commercial and industrial properties to meet the Region s economic demands and growth. A key element in real estate development projects in ECER is that they must take into account the surrounding natural environment as well as the local culture and heritage, to ensure that these elements are not endangered. ECERDC s Real Estate Corporation (REC) & Real Estate Trust Fund (RETF) To unlock the value of Malay Reserve Land into commercially viable real estate ventures that will benefit the local populace, ECERDC has established the Real Estate Trust Fund with an initial fund of RM100 million. The fund was set up in October 2009 in accordance with Schedule 3 of ECERDC Act (Act 688). During the year under review, ECERDC had appointed PriceWaterhouseCoopers Capital Sdn Bhd, in collaboration with ZulRafique & Partners, to undertake a detailed study on the formation and operationalization of ECERDC s Real Estate Corporation (REC) and the utilisation of Real Estate Trust Fund using the REC framework. The study is ongoing and scheduled to be completed by the middle of Among the identified projects for RETF are the Mainland Tourism Coastal Development of Pantai Sepat and Cherating in Pahang, as well as Teluk Bidara in Terengganu. OBJECTIVES OF THE REAL ESTATE TRUST FUND promote To and increase Bumiputera ownership in the local real estate market undertake To an integrated approach towards the creation and development of businesses among the Bumiputera Commercial and Industrial Community (BCIC) boost To the value of Malay Reserve Land through the land s development give To a steady and sustainable return to the owners of Malay Reserve Land, who will act as shareholders in REC through profits derived from the development of the land fully To realise the optimal development potential for Malay Reserve Land 72 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 73

39 THE REVIVAL OF FORMER DARA & LKWJ AREAS Following the dissolution of the Development Authority of Pahang Tenggara (DARA) and Jengka Regional Development Authority (LKWJ), no focused effort has been made in the development and maintenance activities of the areas formerly under DARA and LKWJ administration due to the lack of specific funding. Based on the findings of the Strategic Review of the Dissolution of DARA and LKWJ undertaken by ECERDC and PricewaterhouseCoopers Advisory Sdn Bhd in December 2009, it was recommended that a Special Fund be allocated to the former DARA and LKWJ areas to implement development and maintenance activities. Subsequently, the Federal Government has agreed to channel the Special Fund through ECERDC. On 31 March 2010, ECERDC s Council Members gave the approval for ECERDC to utilise part of the funds allocated to the statutory body under the 9th Malaysian Plan to undertake general maintenance works, micro development projects and socioeconomic programmes in the former DARA and LKWJ areas. The projects include the upgrading of hawker stalls, surau and sports facilities for the benefit of the local residents. Given the specific allocation, it is expected that the pace of development and frequency of maintenance at the former DARA and LKWJ areas will be enhanced and improved. The Special Fund was channelled by ECERDC directly to the six respective local authorities in the former DARA and LKWJ areas comprising the districts of Temerloh, Jerantut, Maran, Pekan, Rompin and Bera. The Pahang State Economic Planning Unit plays a role as the body which coordinates all the general maintenance works, micro development initiatives and socio-economic programmes at the state level, particularly in terms of interacting with all the relevant local authorities. It will ensure the prioritisation of projects in order to accelerate the maintenance works, development and socioeconomic programmes in the former DARA and LKWJ areas. The Federal Government has agreed to continue allocating the Special Fund to the former DARA and LKWJ areas via ECERDC under the 10th Malaysian Plan (2011 and 2012). In 2011 and 2012, strategic projects will be added as part of the projects to be implemented, in addition to the general maintenance works, socio-economic programmes and micro development projects. CRITERIA FOR PROJECT SELECTION The projects selected under this initiative must fulfil several criteria, which include: 1) Safeguarding the security of the public and crime prevention measures 2) Promoting a healthy lifestyle 3) Enhancing public transportation 4) Promoting sustainable development 5) Developing a progressive society 6) Providing good public amenities. PROJECT IMPLEMENTATION FOR 2010 The Pahang State Economic Planning Unit and the local authorities of the former DARA and LKWJ areas have identified 107 projects to be implemented in 2010 under the Special Fund. These projects cover socio-economic community programmes, infrastructure projects, general maintenance projects and micro development projects. ECERDC has channelled a total sum of RM49.5 million in 2010 to the six local authorities for the implementation of these projects. They include: 1) Construction of roads and upgrading works at Felda 21 (Temerloh), Felda Gelanggi (Jerantut) and Rantau Perintis (Jengka) 2) Construction of road and drainage system at Bandar 32, Jengka and Chini 3) Purchase of equipment and machinery to carry out maintenance works at Bera, Maran and Rompin 4) Construction of tennis court at Bandar Tun Razak, Rompin 5) Upgrading of park facilities at Kota Perdana, Pekan 6) Construction of shop lots at Pekan, Chenor and Maran 7) Installation of street lights at Kota Shahbandar and Felda Keratong 2, Rompin 8) Mosque and community hall upgrading works at Paloh Hinai, Pekan. IMPACT OF PROJECTS ON DARA AND LKWJ AREAS The revival of former DARA and LKWJ areas has already brought positive impact to the local community. For instance, the upgrading of the public amenities under the Special Fund has already benefitted 24,400 residents from 24 villages. The construction of roads and the drainage system and upgrading works have improved the road conditions within the areas and reduced the rate of accidents, while alleviating the issue of the poor drainage system for 28,000 residents from 26 villages. The purchase of equipment and machinery for general maintenance works has enhanced the cleanliness and conditions of the areas involved, benefitting some 659,000 local residents. 74 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 75

40 Upgrading of Road and Related Works (Felda Jengka 21) Upgrade the facilities of the surau in the area of Chini, Pekan, Pahang IMPACT: Added comfort for road users Reduced the number of road accidents caused by potholes as well as water retention on roads that pose a danger to the public during the night 1,000 Aboutfamilies have been enjoying the improved facilities. Upgrade the lighting for the public in the area of Bandar 32, Bera, Pahang IMPACT: Upgrading the surau s facilities would make it more comfortable for visitors when performing their prayers is Surau equipped with facilities for ablution and toilet visits project This is expected to more than 800 visitors each month. It will also be beneficial to the 100 worshippers in the vicinity be Will operational on 31 May Upgrade community hall in Paloh Hinai, Pekan IMPACT: Provide comfort to visitors when engaging in recreational facilities with their families Ensure the safety of users especially children when playing project This has 500 families. IMPACT: Has with the increase in capacity from 300 people to 500 people Enables local residents to organize family activities such as weddings, talks and community gatherings. 76 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 77

41 SPECIAL ECONOMIC ZONE The ECER Special Economic Zone (ECER SEZ) acts as a catalyst for concentrated decentralisation of economic activities, in line with the New Economic Model. It will accelerate growth with focused concentration, where manufacturing and commercial activities are promoted and conducted on preferential excise terms, supported by good infrastructure development as well as knowledge-based and capacity-building programmes. 78 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 79

42 ECER Special Economic Zone: Accelerating Growth With Focused Concentration Although the zone physically covers only six percent of the total ECER area, its economic impact is very big, including in its capacity to contribute 50 percent of the employment opportunities in ECER and 80 percent of the economic output from the whole Region. EAST COAST ECONOMIC REGION (ECER) The ECER SEZ is expected to generate approximately 220,000 new jobs and investments of - Dato Sri Mohd Najib Tun Abdul Razak, Prime Minister of Malaysia, at the launch of ECER Special Economic Zone on 4 August, 2009 The ECER Special Economic Zone (ECER SEZ) is a concentration of high-impact projects located within an integrated zone at the nucleus of ECER. ECER SEZ was launched by the Prime Minister of Malaysia, Dato Sri Mohd Najib Tun Abdul Razak in August 2009 and it is set to be a powerhouse of growth, generating approximately 220,000 new jobs and investments of RM90 billion (USD26.4 billion) by year The ECER SEZ s significance to investors lies in its mix of unique attributes which include strategic position, availability and close proximity to raw materials, established infrastructure, competitive human capital, investment-friendly business policies, strong Government support and favourable socio-economic conditions. The 25-km by 140-km strip that extends from Kertih in Terengganu to Pekan in Pahang includes four ports, two airports and innovation zones to support development in manufacturing, oil, gas and petrochemical, agriculture, tourism and education. The Focus Nodes and Free Zones in ECER SEZ, together with the projects, are as listed below: Kota Bharu The KPC development involves the expansion of Kuantan Port and the development of new areas for industries, residences, commercial, tourism, institutional and open spaces. Kuantan Port Expansion Kuantan Port is being upgraded to a deepwater harbour and is poised to become a centre for manufacturing and commercial services while also serving as a regional distribution and international procurement centre. billion Rantau Panjang Bukit Bunga Kuala Besut Gua Musang TERENGGANU 90 by year Kuala Terengganu KELANTAN Dungun Kertih Kuantan Port City (KPC) Kuantan Port City (KPC) has been identified as a Major Focus Node for ECER SEZ and will establish itself as the eastern gateway of Malaysia. RM Pengkalan Kubor Kuala Lipis PAHANG Bentong Temerloh Mentakab It is envisaged that Kuantan Port will become a major eastern port and a gateway for Asia Pacific trade due to its strategic location, which allows easy access to the Asia Pacific markets with a total population of 2 billion. Cukai Kuantan Gambang Pekan Tanjung Agas Kuala Rompin Mersing, Johor The ECER Special Economic Zone (ECER SEZ) 80 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 81

43 FOCUS NODES AND FREE ZONES IN ECER SEZ NETWORK CONNECTIVITY WITHIN ECER SEZ To Dungun/K.Terengganu Dungun Paka Focus Nodes and Free Zones Project PAKA KERTIH Bandar Al-Muktafi Billah Shah Kg. Air Putih Ketengah Jaya Bandar Seri Bandi Kertih Kemasik Kijal Cukai Port City Industrial Parks Free Zones (FZs) Tourism Zones Kuantan Port City (Integrated Development) Kertih Integrated Petrochemical Complex Kertih Polymer Park Kemaman Heavy Industrial Park Kemaman Boat Building & Repair Park Palm Oil Industrial Cluster, Kuantan Gambang Science & Halal Park Pekan Automotive Park Tg. Agas Maritime Industrial Hub Kemaman Port - FZ Kuantan Port - FZ Kuantan Airport - FZ Tg. Agas - FZ Cherating Tourism Town Pantai Sepat Tourism Town Kuala Pahang Tourism Zone Kemasik-Kijal Tourism Zone To Kuala Lumpur Major Urban Nodes Industry Nodes Tourism Nodes GAMBANG Cattle Integration in Oil Palm Plantations (Kemaman) Kuantan-Maran Agro Valley Agropolitan Project EAST COAST EXPRESSWAY (LPT 1 & 2) SEZ CENTRAL LINK TEMERLOH-MENTAKAB/KT RAIL EAST COAST EXPRESSWAY (LPT 4) UMP KIJAL TELUK KALONG/ KEMAMAN PORT CUKAI CHERATING KUANTAN PORT CITY KUANTAN PANTAI SEPAT KUALA PAHANG Bandar Cheneh Baru Cherating PERAMU PEKAN To Johor/Singapore TG. AGAS Sg. Lembing SEZ Link Kuantan Port City Palm Oil Industrial Cluster (POIC) The Palm Oil Industrial Cluster (POIC) is an initiative by ECERDC that is aimed at accelerating the development of the palm oil industry in the region. Gambang Kuantan Pantai Sepat Located in Kuantan in the state of Pahang, POIC takes advantage of its proximity to Malaysia s major palm oil producing areas, petrochemical feedstock and easy accessibility to palm oil mills that produce sufficient feedstock for the downstream activities. It is also part of the larger Kuantan Port City development that allows POIC to benefit from the available support services in logistics and transportation, as well as bulking and distribution facilities. Kuala Pahang The POIC includes facilities for both upstream and downstream industries. The upstream industries include the plantation industry, milling and bulk transport of milled products, while the downstream involves the development of the oleochemical industry to cater for food and non-food based manufacturing activities. Pekan Tanjung Agas Among the promoted sectors of the POIC are surfactant, biodiesel, food, biofertiliser, animal feedmeal, biomass, phytonutrient and polyutherane. To encourage investments in the ECER s palm oil cluster, special incentives and tax breaks will be offered. These companies also have an opportunity to tap into the Region s halal trade. To Rompin 82 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 83

44 High Res Pic INTERNATIONAL, REGIONAL AND NATIONAL POSITIONING OF ECER SEZ Hinterland to East Asia Inter-regional hub for Asia Pacific Integrated industry clusters Low cost of doing business Busy nautical routes Free Zones Eastern gateway of the country Promoting international/regional trade linkages and investment Pekan Automotive Park The Pekan Automotive Park (PAP) is envisioned to become a national and regional hub for car assembly, manufacturing of automotive parts and components, as well as automotive R&D activities. Equipped with plug-and-play infrastructure provided by ECERDC, the Park is estimated to generate some RM4.5 billion in investments throughout its three stages of development, with a total of 10,580 jobs to be created. It is expected to contribute RM12 billion to the Gross National Income (GNI) by ECERDC intends to position the Pekan Automotive Park as the eco-friendly, first mover in the production of environmentally-friendly vehicles, which include electric vehicles and related technologies, such as battery suppliers, transportation infrastructure and renewable energy providers. Well-known investors that have already made their presence in PAP include DRB-Hicom, Mercedes Benz and Volkswagen. Kertih Polymer Park (KPP) Kertih Polymer Park is Malaysia s first fully integrated plastics and polymer park and is wellpositioned to leverage on ready feedstock from the nearby Kertih Integrated Petrochemical Complex and Gebeng Integrated Petrochemical Complex. KPP offers vast investment opportunities in the midstream to downstream petrochemical activities mainly in ethanol, methanol, methane, ammonia, polyethylene and polycarbonate. Kemaman Heavy Industrial Park Kemaman Heavy Industrial Park will focus on the development of heavy industries, particularly the iron and steel making industry, mechanical and electrical industries, steel industry and petrochemical industry, as well as other supporting industries. Gambang Halal Park The 200-acre Gambang Halal Park was planned in response to the overwhelming global demand for Halal products. The Park will leverage on the abundance of resources available in the hinterland area and focuses on both food and non-food industries. The Park will act as a downstream processing centre for ECERDC s other initiatives such as fisheries, crops, herbal, meat and poultry, as well as palm oil downstream products coming from POIC. Focus will also be given to the ingredients industry, healthcare and cosmetic products. 84 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 85

45 ECER: The Investors Gateway With its strategic location facing the South China Sea, ECER is poised to become a major trade and industrial gateway, offering investors access to the vast, burgeoning markets of the Asia Pacific with a total population of 2 billion. In addition to its distinctive, dynamic and competitive attributes, ECER has also attracted investors through its investment-friendly policies and incentives. Between the period of 2008 and December 2010, ECER managed to attract RM36.5 billion worth of investments, compared with RM28.3 billion as of end Of the amount, RM15.3 billion worth of investments have already been received. Among the promoted key projects in ECER are the Pekan Automotive Park, Kertih Polymer Park, Kemaman Heavy Industrial Park, Gambang Halal Park, Palm Oil Industrial Cluster, Pantai Sepat Mainland Coastal Tourism, ECER Herbal Cluster Development and Cherating Mainland Coastal Tourism. ECER: YOUR UNIQUE INVESTMENT DESTINATION To enhance ECER s appeal as an ideal investment destination, a package of attractive fiscal and non-fiscal incentives have already been put in place for investors who choose ECER as their base. ECER fiscal incentives include: Ten years income tax exemption from the year a company derives its statutory income Five years Investment Tax Allowance (ITA) of 100 percent on qualifying capital expenditure Import Duties & Sales tax exemption Customised incentives to companies based on the merit of each case Non-fiscal Incentives The respective State Governments of Kelantan, Terengganu, Pahang and Johor also grant non-fiscal incentives to approved companies. These include discount rate for land premium, quit rent and land assessment, guaranteed land lease periods for a specific time period and flexibility in the employment of expatriates. Investors can also benefit from the special flexibility in foreign exchange administration under Bank Negara Malaysia, exclusively granted to companies accorded ECER status with fiscal incentives. RM 15.3 billion worth of investments have already been received. These incentives are awarded to projects that commence operations before 31 December ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 87

46 ONE-STOP CENTRE FOR INVESTORS To facilitate the needs of investors in the Region, ECERDC continues to serve as a One-Stop service centre which handles the coordination between ECER and Government entities, especially in fast-tracking investors applications. The tasks of ECERDC s One-Stop Centre are: Acting as a single point of contact for all investors who are interested to invest in ECER and provide advisory services for investors Simplify and shorten procedures and guidelines for issuance of business approvals and planning permits, as well as authorisation Process and coordinate and incentive applications for ECER projects Coordinate and approve the application for manufacturing license (ML) and expatriate positions INVESTMENT PROMOTION Through our participation in the Kelantan Cheng Ho Expo in November 2010, ECERDC managed to reach out to the Chinese community who were made aware of the investment opportunities in the Region. ECERDC s participation in the World Chinese Economic Forum held in Kuala Lumpur in December 2010 has resulted in a reciprocal visit by 50 high net worth individuals from the global Chinese diaspora to the State of Pahang in 2011, with potential investments exceeding RM2 billion. ECERDC also participated in various investment missions organised by the Malaysian Industrial Development Authority (MIDA) to other key markets such as Korea and Singapore, in its effort to create ECER brand awareness and ensure continuous promotion of the investment opportunities in the Region, especially in ECER SEZ. ECER s investment promotion drive was intensified during 2010 with activities undertaken to draw investors from key focus markets such as China, the Middle East, India, Singapore and Korea, as well as Malaysia. In May 2010, ECERDC organised an investment mission to the United Arab Emirates and the Kingdom of Saudi Arabia, led by the National Corridor Development Adviser, Y.A. Bhg Tun Abdullah Haji Ahmad Badawi. During the mission, the ECERDC delegation met with potential investors in both countries to promote the available investment opportunities in ECER, especially in the ECER Special Economic Zone (ECER SEZ). The mission resulted in the signing of an MOU in July 2010 to set up a joint venture for the development of a Common User Supply Base within the Tanjong Agas Oil & Gas and Logistics Industrial Park. ECERDC reached out to Chinese investors through three events in 2010, namely, the China International Fair for Investment & Trade 2010 (CIFIT) in Xiamen, China, the Kelantan Cheng Ho Expo in Kota Bharu and the World Chinese Economic Forum in Kuala Lumpur. At CIFIT, ECERDC secured a RM116 million investment from an investor in Chongqing for the manufacture of Ferro Manganese. An MOU was also signed with investors in Xiamen to set up a refinery in the Palm Oil Industrial Cluster, with an estimated investment amount of RM100 million. 88 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 89

47 ECER in the News Throughout 2010, ECER was prominently featured in both the national and international media. 90 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 91

48 ECER in the News 92 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 93

49 ECER in the News 94 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 95

50 ECER in the News 96 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 97

51 CALENDAR OF EVENTS 98 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 99

52 Calendar Of Events Calendar of Events February 2010 January Jan-4 Feb ECER Familiarisation Visit to Manama, Bahrain 12 January 1st Terengganu Implementation and Coordination Committee (ICC) meeting in Kuala Terengganu March March ECER-KPT Entrepreneurial Convention, Kota Bahru 12 January Launch of KerJaya Terengganu January Prime Minister of Malaysia s Investment Mission to India, including the Malaysian Property Expo, Chennai 20 March ECER KerJaya Launch, Kelantan 100 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 101

53 Calendar of Events 31 March 1st Council Meeting in Parliament, Kuala Lumpur June June 1st Kelantan ICC meeting in Kota Bharu, Kelantan May June 1st Pahang ICC meeting in Kuantan, Pahang 7-17 May ECERDC Investment Mission to the Middle East 14 June 2nd Terengganu ICC meeting in Kuala Terengganu, Terengganu 102 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 103

54 Calendar of Events July June MOU Signing Ceremony on Telaga Papan & Ulu Tersat Multiplier Farms 19 July 26 July MOU Signing Ceremony for the Development of Supply Based Facilities between Tanjung Agas, OSC & ECER July Visit by His Highness Prince Faisal Al Saud to Malaysia 12 July 1st Johor ICC meeting in Kota Iskandar Nusajaya, Johor 31 July Launch of empower Programme, Bentong, Pahang 104 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 105

55 Calendar of Events August 2010 September August ECERDC s participation in MIDA Trade Investment Mission to Singapore 4-12 September ECERDC s Participation at CIFIT 2010 China: Investment Mission & MOU Signing 8 August ECERDC s Inaugural Dorper Sheep Auction, Agropolitan Pekan, Pahang 25 September Re-location of 100 Participants to Agropolitan Batu 8, Mukim Lepar October August Launch of Pahang Biodiversity Strategic Action Plan, Pahang 1 October Maya Hotel, Kuala Lumpur 106 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 107

56 Calendar of Events 7 October Open House 18 October 2nd Kelantan ICC meeting in Kota Bharu, Kelantan 7 October 3rd Terengganu ICC meeting in Kuala Terengganu, Terengganu 26 October 2nd Pahang ICC meeting in Kuantan, Pahang November October JV Agreement Signing Ceremony between Tanjung Agas & OSC in Kuantan Pahang 108 ECERDC 2010 ANNUAL REPORT November ECERDC s participation in Cheng Ho Expo 2010, Kelantan ECERDC 2010 ANNUAL REPORT 109

57 Calendar of Events December Nov-5 December ECERDC s Participation in the Monsoon Cup 2010, Pulau Duyung, Terengganu 2 December Menteri Besar Johor s working visit to ECER pilot projects under the Vendor Development Programme-Sewing Project and Boat Building and Repair Centre (BBRC), Mersing, Johor 11 December Tanjung Agas Ground Breaking Ceremony 1-3 December ECERDC s Participation in the 2nd World Chinese Economic Forum, KL Convention Centre 16 December 3rd Council Meeting in Parliament, Kuala Lumpur. 110 ECERDC 2010 ANNUAL REPORT ECERDC 2010 ANNUAL REPORT 111