This article first appeared in The Edge Malaysia Weekly on January 18, 2021 - January 24, 2021

THE Negeri Sembilan state government has come up with a plan, spanning the next 25 years, to give its economy a shot in the arm. As a precursor to this, the state government launched in mid-December last year Invest NS Year 2021, but it gained little traction because of the pandemic.

Datuk Mohamad Rafie Ab Malek, chairman of NS Corporation, the government agency responsible for the investment and economic affairs of Negeri Sembilan, sheds some light on the state’s ambitious plans.

“We will finalise things soon. This is our economic blueprint. [The] Negeri Sembilan state government has prepared its own master plan for the entire development until 2045. The gross development, the targeted value that we plan for the whole thing, is about RM468 billion,” Mohamad Rafie tells The Edge in an exclusive interview.

Mohamad Rafie is tight-lipped, however, on much of the plan, with many of the proposals still being firmed up and partners still being roped in.

“We have a number of players coming in … It won’t work with one single player. You see, the whole development involves a number of players,” he says.  

While several key clusters are being mooted, the one for industrial development — which is concentrated in the eastern part of the state, and spans Seremban to Port Dickson, within the Malaysia Vision Valley 2.0 — seems to be the most interesting, with part of the plans already laid out and the agency willing to share some details.

Mohamad Rafie further breaks down the MVV2.0 region into four clusters (see map), situated on a 33,227-acre site. He explains that the 2,838-acre Parcel A, on the North-South Expressway (NSE), is where a Tech Park is slated to be built; and the 8,796-acre Parcel B — what he calls a Smart County — comprises a residential development and a transit-oriented development. The Kuala Lumpur-Singapore High Speed Rail (HSR), which has been terminated, was to have passed through this area.

While the termination of the HSR is a dampener, studies are being undertaken to build an HSR in Malaysia, and there is every possibility of a rekindling of talks with Singapore.  

Then there are Parcel C, which is about 15,400 acres and slated for an aerospace and logistics hub called NS Aerospace Valley; and the 6,220-acre Parcel D, which entails the development of an integrated maritime hub and a waterfront corridor.

The 33,227 acres allotted for the four parcels are to be acquired from Sime Darby Bhd and its units, Sime Darby Plantation Bhd and Sime Darby Property Bhd.  

“We are still talking to Sime Darby. Basically, all three Sime Darby units agreed [for us] to develop the land. [So,] we already have an understanding with all the landowners. Some land is under TH Properties [Enstek],” Mohamad Rafie says.

While partners for all the four parcels have been identified, Parcel C seems to be the most intriguing (see “Can Uni Wall deliver?”).

Parcel C entails the development of an aerospace valley and a logistics hub, and is expected to do well, given its strategic location, which offers land, air and sea connectivity as well as proximity to the Kuala Lumpur International Airport, Port Klang and the NSE.

With its proximity to KLIA, NS Aerospace will be able to tap the airports customer base. In 2018, KLIA handled close to 60 million passengers and more than 700,000 tonnes of cargo and facilitated close to 400,000 aircraft movements, making it among the world’s top 25 airports in terms of size. Also in the mix is KLIA2, the world’s largest purpose-built terminal dedicated to low-cost carriers. It has a capacity for 45 million passengers.

With Port Klang and the NSE close by, the aircraft component manufacturers can export their products with ease.   

Mohamad Rafie says, “The federal government is doing the feasibility study for Parcel C (NS Aerospace). [The feasibility study] is ongoing; the whole project is being studied by the EPU (Economic Planning Unit). We are expecting to get the study by April or May this year; the EPU has started on the studies already.”

He adds that the federal government is offering tax incentives to make things more attractive to potential investors of Parcel C.

Prior to the global lockdown, he had met with many aviation and aerospace industry players and even travelled to France.

“I went to Paris to talk to potential investors … They loved the idea. You can imagine the shipping costs [they have to endure to send their parts to various locations around the world]. Having the aviation industry [consolidated] in one area (NS Aerospace), imagine how much costs we can cut.”

While the aerospace industry has seen better days, it is expected to rebound eventually, adds Mohamad Rafie.

Explaining NS Aerospace’s business model, he says: “What we [NS Corp and Uni Wall APS Holdings Bhd] as the developer are doing is we provide the buildings according to [the users’] specifications, and then they will lease the building from us … This is one of the ways to attract them, [as there is low capital outlay for them].”

NS Corp hopes to attract local players such as CTRM Sdn Bhd (formerly Composites Technology Research Malaysia), a unit of diversified DRB Hicom Bhd and UMW Aerospace Sdn Bhd, which supplies fan cases for Rolls Royce’s aircraft engines and is wholly-owned by UMW Holdings Bhd.

Other players that could be interested to shift to NS Aerospace Valley include Safran Landing Systems Malaysia Sdn Bhd in Sendayan, Negeri Sembilan, and part of French giant Safran group.

As to the revenue such an initiative can generate, Mohamad Rafie says Singapore’s Seletar Aerospace Park, which is located on less than 800 acres, generates a revenue of S$11 billion annually (RM33.5 billion).

Are the state government’s plans realistic? Recall that the original MVV2.0, which was mooted more than 10 years ago, with Sime Darby Property as the master developer, has started to take off only in recent years.

To this Mohamad Rafie says, “That was a different management, this is a new management … and there was no real master plan for the development.”

On NS Corp’s partner Uni Wall being a smallish company, Mohamad Rafie says: “There is nothing wrong with being small. Jack Ma and Alibaba [Group Holding Ltd] started out small, but look at them today … We would rather work with small companies that are capable than with giants that are not dependable.

“The commitment is important.”

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