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GROUND BREAKING CEREMONY FOR HUCHEMS MALAYSIA PROJECT IN KIDURONG,

BINTULU, SARAWAK

29^th July, 2015 (Wednesday) 10.00 a.m.

First of all, I would like thank HUCHEMS for inviting me to officiate the Ground Breaking Ceremony for their Proposed Huchems Malaysia Project here in Bintulu, Sarawak.

• I am very honoured to be invited and delighted to be here in this auspicious event. I believe you all feel the same.
• This project is another important milestone in our efforts to industrialise the State. 

1.             Sarawak Economy

• Sarawak aspires to be a developed State by the year 2020 together with the rest of other states in Malaysia. This is indeed a tall order as we are left only with another 5 years to reach the destination. For us in Sarawak, the formula is none other than rapid industrialisation capitalising on the natural resources that are available in the State.  
• Currently, our economy is the third largest in the Country after Selangor and Federal Territory of Kuala Lumpur. In 2014, our Real Gross Domestic Products (RGDP) was RM78.6 billion.
• We have successfully diversified or broaden our economy from agriculture based to manufacturing and services. In 2014, the contribution of the services sector was the largest at 37.6%, followed by manufacturing sector 26.6%, mining and quarrying sector 21.0%, agriculture sector 11.2% and construction sector 3.6%.
• In order to expand our economy further, we need to add more value or deepening our economic activities in all sectors of the economy. This will be done through industrialisation by shifting to higher value added activities, undertaking productivity driven growth initiative and application of higher levels of technology.
• To realise this objective, we are also focusing on the downstream development of one of the key economic sectors of the State’s economy, which is the oil and gas sector. In fact, oil and gas has been identified as one of the 10 priority industries in SCORE. This is important because Sarawak contributes 26% of the national petroleum production and 56% of the natural gas production.

2.          Contribution of the Oil and Gas Sector

• In 2014, the oil and gas sector contributed 44% to the State’s economy.
• In terms of export receipts in 2014, 76% was contributed by the oil and gas sector.
• Of this 76%, 55% was contributed by the Liquefied Natural Gas and 21% from crude petroleum and petroleum products.

3.             Shift towards Higher Value Added Petro-Chemicals Industries

• We are not contented with the development of oil and gas industry in the State. The reason being, our oil and gas products are still commodity base meant for exports. For example the production of Liquefied Natural Gas, ammonia and urea utilising natural gas as the feedstock for the industry. The irony is that the value added activities are done abroad utilising our natural gas as raw materials in their petro-chemical industries.
• We want to maximize the oil and gas sector's contribution to the State’s economy. In doing so, we want Bintulu to be the petro-chemical hub in Malaysia by inviting petro-chemical industries to set up their plants in Sarawak.
• To do this, we will be intensely involved in developing the high value downstream products of oil and gas industries such as specialised and fine chemicals. In this regards, we will consider all feasible proposals to establish petro-chemical industries in the State and will facilitate them accordingly.  

4.          Partnering with Huchems Malaysia for Petro-Chemical Project

• As part of our industrialisation agenda, we want to make high value petro-chemicals industry as one of the key drivers for the growth of the State’s manufacturing sector.
• The decision made by HUCHEMS of South Korea to invest in the State is an important step in realising this objective. For that reason, we welcome HUCHEMS to invest in Sarawak. Indeed you are our partner or our brother in developing the State of Sarawak as highlighted in your video. I quote “Brothers Fly Together”.
• HUCHEMS, established in 2002, has its origin in the fine chemical business and ammonia production is now one of the largest players in South Korea.
• Undoubtedly, the presence of HUCHEMS will further enhance our petro and fine chemical industry value chain to include high value added downstream products and to establish itself for expansion into hybrid chemical industry.
• I was informed that HUCHEMS’ vision is to expand their current industry value chain and to establish one of the largest fine chemical Parks in ASEAN region to be sited in Sarawak. This will contribute significantly towards the State’s economic growth.

5.             State Committed to Supply Natural Gas

• The State has the competitive advantage in the development of the high value added petro-chemical industry especially with the availability of natural gas as feedstock.
• To show our strong support, we will endeavour to make available the supply of natural gas needed by Huchems to ensure the successful operation of the proposed HUCHEMS Chemical Complex in Kidurong, Bintulu.
• For this reason, I have written a letter and spoken personally to the Prime Minister on this matter and he has agreed for PETRONAS to supply natural gas to HUCHEMS according to the Principle Agreement that we had signed with HUCHEMS on 1^st December 2014.
• Therefore, I want PETRONAS to conclude the Master Agreement with the State Government on the supply of natural gas for both power and non-power sectors and to expedite the signing of the Gas Supply Agreement (GSA) with HUCHEMS. The signing of the GSA is critical as HUCHEMS is expected to commence the construction of their plant by August 2015. 

6.             Impact of HUCHEMS’ Project

• The proposed investment by HUCHEMS in the high value added petrochemical industry will create both business and employment opportunities in the State. The private sector in the State will also have the opportunity to participate in whatever business spin-offs created by HUCHEMS.
• The young and talented Sarawakians will have the opportunities to work in the proposed manufacturing plant and other related industries supporting the plant.
• For this purpose, the State Government is also emphasising the technical and vocational education to ensure that there are enough skilled workers especially technicians to meet the workforce requirement of HUCHEMS.

7.             Conclusion

• This project is one of the mega projects that are being implemented to ensure rapid and sustainable economic growth in the State.
• I want to assure HUCHEMS that we will provide you the necessary assistance required to ensure the success of this project.
• With this remark, I therefore, officially declare the launching of the Ground Breaking Ceremony of HUCHEMS Malaysia Project in Kidurong, Bintulu.
• Thank you.