IJM ties up with CHEC for mixed development, logistics hub in Kuantan

by S BIRRUNTHA / pic mckip.com.my

IJM Corp Bhd has entered into a strategic partnership with China Harbour Engineering Co Ltd (CHEC) for the development of Malaysia-China Kuantan International Logistics Park (MCKILP).

The integrated mixed development and logistic hub in Kuantan will be IJM’s first foray into the industrial and logistics market to meet the growing logistics demands in the east coast region.

The companies said the agreement for a new joint-venture (JV) company was signed between CHEC and Asas Panorama Sdn Bhd, IJM’s indirect subsidiary that is owned 60:40 by IJM Land Bhd and Guangxi Beibu Gulf International Port Group Co Ltd.

CHEC, a subsidiary of China Communications Construction Co Ltd, will hold an equity interest of 51% in the new joint-venture company while Asas Panorama will hold the remaining 49% equity interest.

MCKILP will be developed on a proposed 259ha site in Malaysia-China Kuantan Industrial Park (MCKIP3), comprising light and medium industrial, logistics and warehousing, residential and commercial components.

In a joint statement today, IJM, CHEC and MCKILP said this ambitious new development will turn MCKIP3 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 MCKIP1 and 2, Gebeng Industrial Estate and Pekan Automotive Park,” they noted.

Additionally, they also highlighted that a collaboration agreement for a proposed construction JV company was signed between CHEC and IJM Construction Sdn Bhd, whereby the purpose of the JV company is to undertake construction works for the main infrastructure and facilities in MCKILP. 

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. 

It will be strategically located less than 10km from the ECRL’s Kuantan Port station, and is 1.7km from Kuantan Port and 25km from Kuantan town.

IJM deputy CEO and deputy MD Lee Chun Fai said the MCKILP’s development is timely and will provide critical infrastructure that will enhance the region’s logistics and supply-chain capabilities. 

“Together with MCKIP1 and 2, we envision MCKILP’s complement to the industrial ecosystem, catalysing more investments to the region in future,” he said. 

Lee is also the chairman of MCKIP, who signed the agreement on behalf of Asas Panorama.

He said MCKIP, MCKILP and the East Coast Rail Link (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,” he added.

Meanwhile, CHEC CFO Ou Weihui said notably, the JV will tap on the expertise of the respective shareholders and the company is honored to have such esteemed partners.

He added that MCKILP aspires 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.

The ECRL, which is planned for completion in 2027, is anticipated to serve as 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.

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.