Kertih Polymer Park

www.ecerdc.com.my MALAYSIA’S FIRST FULLY INTEGRATED POLYMER HUB

Contents

The East Coast Economic Region: Poised For Transformation 3

ECER At A Glance 4

Overview of the Petrochemical and Polymer Industry in Malaysia 6

World-Class Petrochemical Hubs in the Malaysia 8

Kertih Polymer Park: Malaysia’s First Fully Integrated Polymer Hub 10

Myriad of Polymer Products 13

The ECER Incentives Package - Kertih Polymer Park 14

Contact Us 17
The East Coast Economic Region: Poised For Transformation

3
The ECER At A Glance

The vision is for the ECER to be a developed Region by 2020

The ECER’s vision is defined by three main characteristics: Scope of ECER

Land Area : 66,736 sq km (51% of Peninsular Malaysia)
• Distinctive • Dynamic • Competitive Total Population : 3.9 million (2005), or 14.5% of Malaysia’s total population
Total Initiatives : 189 projects
Total Investment : RM112 billion (2008 – 2020)

Key Clusters

Mission Key Clusters Key Enablers

• To move the economy up the value chain • Tourism • Social & Human Capital Development
• To raise the capacity for knowledge and innovation and to • Oil, Gas & Petrochemical • Transportation
inculcate a “first class” mentality • Manufacturing • Infrastructure
• To address persistent socio-economic inequalities, • Agriculture • Property
constructively and productively • Education
• Environment
• To improve the standard and sustainability of the quality of life
• To strengthen the institutional and implementation capacity

Key Enablers

ECEr Projected Growth under the 10th Malaysia Plan (10-MP)

2005 2015
GDP growth (in %) 5.7 6.1
GDP growth (in RM billion) 23.1 67.1
GDP per capita (in RM) 5,860 15,720
Total Population (million) 3.9 4.3

Source: ECERDC
Derived from the 10th Malaysia Plan (10-MP)

4 5
Overview of the Petrochemical and Polymer Industry in Malaysia

The oil, gas and petrochemical industry

is one of the leading industries in
Malaysia, with significant hydrocarbon
reserves located in offshore Terengganu,
contributing significantly to the nation’s
gross domestic product (GDP).

In the ECER, there exist two major

downstream clusters located in Kertih,
Terengganu and Gebeng in Pahang.
Although major facilities are already in
operation, there still exist opportunities to
strengthen linkages with other sectors.
World class petrochemical manufactures have established plants
in Malaysia, providing a steady supply of feedstock material for the
These sector seek to expand the activities
polymer industry, leading it to become one of the most dynamic
of the industry in the downstream and
industries in Malaysia’s manufacturing sector.
manufacturing related sectors, to add
more value to existing output.
Polymer products manufactured locally range from common
household items, packaging materials and conveyance materials,
to parts and components for the electrical and electronics,
automotive, office automation, computer and telecommunication
industries.

Key Statistics of Polymer Industry in Malaysia

Total no. of manufacturers Approx. 1,500

Total no. employed
Total sale (2007)
Total resin consumption (2007)
Approx. 95,000 people
RM 16 billion (up 2.6% from
2006)
1.9 million tonnes

Per capita resin consumption

75 kg
(2007)
Total exports (2007) RM6.8 billion
Plastic industry sub-sectors • Packaging
• Electrical & electronics
• Household
• Automotive
• Construction
• Agriculture
• Others

Source: MIDA

6 7
World-Class Petrochemical Hubs in the Malaysia

Potential Sources Products Applications

Feedstock

Petrochemical Plants in Kertih

On-Site Utilities

Polyethylene Polyethylene (PE), incl. - General purpose films - Electricity

(M) Sdn Bhd high density (HDPE) & - Heavy-duty films - Nitrogen
linear low density - Cast-stretch films - Steam
(LLDPE), specialty - Blending partners
compounds and - Environmental friendly products - Potable water
enviromentally - Demineralised
degradable polymer water
- Cooling water
Petlin (M) Sdn Bhd Low density - Mono & multi layer films
polyethylene (LDPE (food packaging, zipper bags, - Waste water
shrink wrap, heavy-duty bags, Treatment
film for agriculture produce - Pressurised air
& industrial packaging film)
- Condensate return
Vinyl Chloride Polyvinyl chloride (PVC - Pipe
(M) Sdn Bhd - Flooring
- Wire & cable
- Building/construction On-Site Services
- Film & sheet
- Automotive parts - Polymer technology
centre
Petrochemical Plants in Gebeng
- Emergency &
fire fighting
There are two integrated petrochemical complexes currently in Polypropylene Polypropylene (PP) - Automotive parts services
(M) Sdn Bhd - Appliances
operations in the ECER: - Film
- Laboratory
- Fiber & filaments - Medical
• The Kertih Integrated Petrochemical Complex (KIPC) - Centralised
Eastman Chemicals Polyester copolymers - Automotive warehousing
in Terengganu. Situated within the PETRONAS Petroleum (M) Sdn Bhd - Bottles
for raw materials &
Industry Complex (PPIC), KIPC focuses on ethylene based - Sheets & films
products
products. Kaneka Paste Polymers Dispersion polyvinyl - Construction - Maintenance
Sdn Bhd chloride - Electrical cable insulation services
- Portable electronic accessory
• The Gebeng Integrated Petrochemical Complex (GIPC) in - Toys - Administrative
- Erasers - Railway
Pahang is also an integrated petrochemical complex focusing
- Port (bulk liquid
on propylene based products. Kaneka Malaysia Methyl methacrylates - Coating
& containerised
Sdn Bhd copolymers - Acrylic plastics
facilities)
PPIC is home to 41 plants and facilities with investments from PolyPolymerAsia Pacific Polyacetals - Automotive & electronic parts - Tankage
Sdn Bhd - Telecommunication & office
Malaysia’s national oil company PETRONAS alone amounting equipment
- Pipe rack
to RM70 billion. It not only offers world-class infrastructure and - Cosmetics containers
facilities, including logistics and distribution system to support - Mechanical appliances &
equiment
downstream manufacturing activities, but also extensive products - Household electrical appliances
to be used as feedstock, particularly in the development of a wide Toray BASF PBT Resin Polybutylene - Automotive & electronic
range of polymer resins and materials. Sdn Bhd terephthalate (PBT) equipment and parts
- Computer parts
- Household appliances
In addition to the varied on-site suppliers, polymer manufacturers
close to PPIC are also able to import feedstock from external BASF PETRONAS Chemicals Acrylic monomers, - Impact modifier, speclalty
Sdn Bhd. plasticiser and adhesives (laminating, packing),
providers by utilising the nearby Kuantan Port and the Kertih– intermediates construction
Kuantan Railway System (KKRS) as part of their distribution (e.g. tetrahydrofuran) - PVC industries (film & sheets,
wire & cable, packaging,
system. footwear)
- PVC adhesives
With PETRONAS having laid the foundations with substantial
investments over 35 years in its integrated petrochemical
complex, the nearby Kertih Polymer Park (KPP) provides the best
opportunity for investors to reap maximum benefits in terms of
cost savings and reduced capital outlay.
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Kertih Polymer Park: Malaysia’s First Fully Integrated Polymer Hub

A key initiative in the development of the country’s downstream

TO PAKA 15 KM
petrochemicals industry, Kertih Polymer Park (KPP) is the first fully
integrated polymer hub in Malaysia. KERTIH POLYMER PARK (KPP)
RADIUS MAP
Located within the PETRONAS Petroleum Industry Complex
(PPIC), KPP will be supporting polymer and polymer-related
manufacturing activities and services providers within a specified
locality measuring 140 hectares in Kertih.
UTILITIES
5.73 KM

KPP
The Park takes on an attractive plug-and-play development model, KIPC E
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whereby the requisite support facilities and common services K
PAR ITY L CLU
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INDUS E
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EXIST IAL
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will be put in place, allowing investors to immediately start their SEC IND

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operation upon relocating to the KPP. RAC
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With an objective to promote further downstream investments in

IND

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PHASE 2
KERTIH AIRPORT

CTR
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UST
the polymer and polymer-related industries, KPP will be tapping

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PANTAI MA’DAERAH

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into the potential synergies from integration with nearby Kertih

LTA
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ING IN
CLU

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Integrated Petrochemical Complex (KIPC).

UST
4.47 KM

H IG
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2.88 KM
The Park’s development will also be supported by world-class

RIAL
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PHASE 1

UST
research and development input from the PETRONAS Polymer

ZONE
IND
BANDAR SERI KERTIH
Technology Centre (PPTC), a market-driven technology research HEALTH CENTRE • RETAIL TE
IND RRA
& development (R&D) centre to enhance customer technical MASJID TG. MIZAN • SERVICES US CE
TR
IES
1.43 KM • BANK
services and product improvement and development for polymer UT
KERTIH POLICE STATION
applications.
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CL UST
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PPTC aims to spur the growth and global competitiveness of 3.5 KM PU MUL
RP TI
the polymer industry in the KPP by carrying out R&D for polymer ZO OSE
NE D
MA P AR
application, joint venture projects with manufacturers and end MANPAARK
ZONAGE K
ZO NG R
NEE ER
users and offering technical services including product testing,
PETRONAS COMPLEX
technology development and training. The Centre will also foster
a closer working relationship between polymer producers and 1.46 KM

manufacturers in KPP to raise the standards of the polymer industry PETRONAS GOLF COURSE LOG
IS
HU TIC
in Malaysia. B
1.65 KM

MESRA MALL
The overall strengthening of the sector in the ECER will allow The Kertih Polymer Park (KPP) Master Plan. Upon
investors to participate in a host of support services, such as 1.65 KM
completion, KPP is projected to attract over RM2 billion
the supply of materials, technical and lab services, warehousing, PEKAN KEMASIK worth of investments.
distribution and wholesaling activities, as well as retailing.
1.22 KM
PANTAI KEMASIK
Key Statistics of Kertih Polymer Park
2.56 KM
Development Phase 1 70 hectares
Development Phase 2 53 hectares HOTEL AWANA KIJAL

Total Projected Investment RM2.5 billion

Total Projected Number 10,500
TO KUANTAN PORT 70 KM TO KUANTAN 238 KM
of Employment

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Kertih Polymer Park: Malaysia’s First Fully Integrated Polymer Hub Myriad of Polymer Products

Key Supporting Infrastructures in KPP

• PETRONAS Polymer Technology Centre (PPTC)
• Kertih–Kuantan Railway System (KKRS)
• Kertih Port (for liquid cargoes)
• Kuantan Port (for dry and bulk cargoes)
• Kertih Terminal for Centralised Tankage
• Centralised Emergency & Fire Fighting Services
• Centralised Utility Facilities

Benefits to the Industry and Local Populace

• Add value to national hydrocarbon resources by moving up the
product value chain and expanding downstream activities in the
petrochemical industry into Polymer and its related industries
• Capture more resource-based value domestically through the
manufacturing of finished products locally
• Enhance the competitiveness of Malaysian polymer industry and
provide a focused development to cater for specific needs
• Ensure a competitive base for local producers via:
- the tapping of on-site operational and infrastructural synergies
- efficient supply of ra w materials (just-in-time) and
- economies of scale and direct cost savings (centralised services,
freight savings, etc.)
• Expand employment and entrepreneurship opportunities as well as
creates demand for other ancillary services
• Facilitate the transfer of technology, knowledge and skills to local
small and medium enterprises (SMEs) involved in polymer and its
related industries and
• Attract domestic and foreign investments in polymer and its related
industries

Participation Opportunities
The Kertih Polymer Park is open to local and foreign investors in the
following areas:
• SMEs in polymer manufacturing with the following profile:
- export-oriented domestic manufacturers
- companies aspiring to reach global markets
- companies seeking expansion
• Foreign-based companies seeking overseas ventures in Malaysia
• Specialty or high-end polymer compounders and manufacturers
• Other manufacturers and suppliers supporting the polymer industry
(e.g. speciality packaging, pallet, specialty chemicals including
pigments, dyes, additives, antioxidants and UV light stabilizers)
• Packaging manufacturers (e.g. specialty packaging, pallet suppliers)
• Logistics and other special service providers (e.g. Health, Safety &
Environment (HSE), waste management, R&D, etc.)

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The ECER Incentives Package - Kertih Polymer Park The ECER Incentives Package - Kertih Polymer Park
Ecer Incentives
Activity ECER Incentives Package
(To qualify for these incentives, companies must commence
operations before 31 December 2015)
Petrochemical and Industrial Park Development projects indesignated Companies developing infrastructure of industrial park:
locations in the ECER Master Plan
• Income tax exemption of 100% for 10 years commencing
• Kertih Polymer Park, Terengganu from the year company derives statutory income, or
• Investment tax allowance (ITA) of 100% qualifying capital
expenditure for 5 years
• Stamp duty exemption on instruments of acquisition or for the acquisition of craft, supervisory or technical skills related to the
leasing of property relating to industrial park
Companies undertaking promoted activities in the park:-
• Customised incentives based on merit of each case, or
• Income tax exemption of 100% for 10 years commencing Research and Development R&D
from the year company derives statutory income, or
• Investment tax allowance (ITA) of 100% on qualifying • Payments made for the use of the services of approved • Double deduction on payments for services rendered
capital expenditure for 5 years
Application to be submitted to ECERDC
• Import duty and sales tax exemption on raw materials,
components, machinery, equipment, spare parts and
consumables that are not produced locally and used directly
in the activity.
Other Incentives
Activity Incentives
These incentives are mutually exclusive/to be utilised
upon expiry of ECER Incentive Package
Training
• Investment in building used for industrial, technical or • Industrial Building Allowance: Initial allowance of 10%, and an
vocational training approved by the Minister annual allowance of 3%.
• Cash contribution to non-statutory income oriented vocational training • Single deduction
institutions and those established and maintained by a statutory body
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Other Incentives
Activity
Training
• Royalty payments to non-residents (franchisors) for franchised
education programmes approved by the Ministry of Education
• Training of employees for the purpose of upgrading and d e v e l o p i n g
the employees’ craft, supervisory and technical skills or increasing the
productivity or quality of its products, in approved training institutions
• Pre-operational training by companies (which do not contribute to HRDF)
production of their products
• Pre-operational training of potential employees withinone year before
commencement of business
• Cash contribution to approved research institutes
research institutes and companies
• Research on commercialization of research findings
Reinvestment & Promotion
• Reinvestment in petrochemical and manufacturing activities
• Promotion of industrial park overseas
Export Promotion
• Expenditure incurred for the promotion of export by resident companies
• Export Credit Insurance Premiums paid to approved local insurance
companies
• Premiums paid to local insurance companies for cargo exported or
cargo imported
• Promotion of Malaysian Brand names by Malaysian companies (at least
70% Malaysian-owned) which are registered proprietor of the brand
• Investment in buildings used as bonded warehouses for storage of
goods for exports and re-export
• Certification for recognized quality systems and standards, and halal
certification
Incentives
These incentives are mutually exclusive/to be utilised
upon expiry of ECER Incentive Package
• Withholding tax exemption
• Double deduction on training expenses incurred
• Double deduction on training expenses incurred in the year of
assessment in which the gross income first arises
• Single deduction on training expenses incurred
• Double deduction on cash contribution
• Reinvestment allowance (RA) of 60% of qualifying capital
expenditure incurred to be offset against 100% of statutory income
in promoted areas for 15 years from the year of assessment of first
claim
• Double deductions on expenditure incurred
• Double deduction for expenses incurred on:
- registration of patents, trademarks
- product licensing overseas
• Double deduction on payments of premiums
• Double deduction on payment of premiums
• Double deduction on expenses incurred in advertising the brand
• Industrial building allowance of 10% on qualifying expenditure
for each year of assessment
• Double deduction on expenditure incurred
The above claims to be submitted to the Inland Revenue
Board (IRB)
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Contact Us

If you are an investor planning to establish or expand your business opportunities in the
East Coast Economic Region (ECER) we will provide you with professional assistance. We will
be the first point-of-contact for all your investment inquiries.

Companies planning to start or expand operations in the ECER can obtain information and
assistance from the East Coast Economic Region Development Council. We will help you
harness the ECER’s competitive edge and capabilities to achieve your business objectives.

East Coast Economic region Development Council (ECErDC)

Tel : +603 2035 0021/22
Fax : +603 2035 0020
E-mail : secretariat@ecerdc.com.my
Website : www.ecerdc.com.my

Kuala Lumpur Office Kelantan State Office

Level 69, Tower 2 Ground Floor & Mezzanine

PETRONAS Twin Towers Lot 137 & 138 Bangunan Sutera Inn Prima
50088 Kuala Lumpur Jalan Dusun Muda off Jalan Bayam
MALAYSIA 15200 Kota Bharu, Kelantan, MALAYSIA
Tel : +603 2035 0000 Tel : +609 746 0021
Fax : +603 2035 0020 Fax : +609 746 0020

Terengganu State Office Pahang State Office

Ground Floor & 1st Floor B8002 Sri Kuantan Square
100B Jalan Sultan Zainal Abidin Jalan Teluk Sisek
20000 Kuala Terengganu, 25050 Kuantan, Pahang
Terengganu, MALAYSIA MALAYSIA
Tel : +609 620 0021 Tel : +609 565 0021
Fax : +609 620 0020 Fax : +609 565 0020

ECER/01.042010
© East Coast Economic Region Development Council (ECERDC) 2010
All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any means (electronic, mechanical, photocopying, recording or otherwise) without the
permission of the copyright owner (ECERDC).
Disclaimer: While every reasonable care has been taken in preparing this document, ECERDC cannot be held responsible for any inaccuracies. All information and specifications are current at the time
of preparation and are subject to change as may be required. Renderings and illustrations are artist’s impressions only and cannot be regarded as representations of fact.

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