IJM, CHEC to develop mixed development and logistics hub in Malaysia

Malaysia’s construction company IJM Corporation Berhad has entered into a strategic partnership with China Harbour Engineering Company Ltd (CHEC) for the development of Malaysia-China Kuantan International Logistics Park (MCKILP), an integrated mixed development and logistic hub in Kuantan.

The JV agreement for a new joint-venture company was signed between CHEC and Asas Panorama Sdn Bhd, IJM’s indirect subsidiary that is owned 60:40 by IJM Land Berhad and Guangxi Beibu Gulf International Port Group Co Ltd. CHEC will hold an equity interest of 51% in the new joint-venture company.

According to IJM, MCKILP will be developed on a proposed 640-acre site in the Malaysia-China Kuantan Industrial Park (MCKIP) 3. It will comprise light and medium industrial, logistics and warehousing, residential and commercial components. This ambitious project will turn MCKIP 3 into a premier industrial and logistics hub in the East Coast Economic Region (ECER) of Malaysia.

MCKILP is set to attract downstream industries in logistics, automobile, marine engineering, advanced steel materials, palm oil processing, petrochemical and e-commerce that could become value chain suppliers to surrounding industrial parks such as MCKIP 1 and 2, Gebeng Industrial Estate and Pekan Automotive Park.

On the same day, a collaboration agreement for a proposed construction JV company was signed between CHEC and IJM Construction Sdn Bhd. The JV company will undertake construction works for the main infrastructure and facilities in MCKILP.

Lee Chun Fai, chairman of MCKIP said, “This marks an important milestone for us as we embark on a strategic partnership with CHEC to design, develop and operate MCKILP. I am excited for the opportunities that MCKILP will bring to the ECER. Its development is extremely timely and will provide critical infrastructure that will enhance the region’s logistics and supply-chain capabilities.”

“Together with MCKIP 1 and 2, we envision MCKILP’s complement to the industrial ecosystem, catalysing more investments to the region in the future,” added Mr Lee, who is also the deputy CEO and deputy managing director of IJM Corporation Berhad.

“We are looking forward to working with IJM and Guangxi Beibu to realise the tremendous opportunities this project offers. Notably, the JV will tap on the expertise of the respective shareholders – we are indeed honoured to have such esteemed partners,” said Ou Weihui, chief financial officer of CHEC. The company is a subsidiary of China Communications Construction Company (CCCC), the main contractor for the East Coast Rail Link (ECRL) project.

“The MCKILP endeavours to provide a trusted multimodal logistic and transportation hub, offering world-class infrastructure and services that can stimulate economic growth and enable strategic integration with the transportation ecosystem that connects the east coast to the economic heartland on the west coast.”

In terms of growth, Kuantan Port, MCKIP and now MCKILP go hand in hand. MCKILP serves as the missing link that would boost the trade distribution network and functions as an intermodal connecting point with Kuantan Port, the national highways, airport and ECRL.

The ECRL, which is planned for completion in 2027, is anticipated to become a land-bridge between the west and east coast, increasing the export of goods from the hinterland, especially containerised cargo. The alignment of the spur line route from the ECRL to pass through MCKIP into Kuantan Port is expected to be finalised in 2023.

MCKILP will be strategically located less than 10 km from the ECRL’s Kuantan Port station, and is 1.7 km from Kuantan Port and 25 km from Kuantan town. The enhanced connectivity of the ECRL provides a viable land route alternative to the traditional and overcrowded shipping routes between the South China Sea and Melaka Straits, positioning Kuantan Port as a major regional shipping hub.

“MCKIP, MCKILP and ECRL are expected to contribute positively to IJM-owned Kuantan Port’s bulk cargo and container throughput. Collectively, these ambitious projects represent one of the most significant integrated industrial, transport and logistics hubs that the east coast region has seen in recent years,” concluded Mr Lee.