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Sandakan – East Coast Business Hub

SANDAKAN is blessed with a lot of natural resources. It has one of the best natural habours in Borneo and this coupled with rich biodiversity and well developed plantation industry makes her an ideal port in Sabah.

The coastal town also has a lot to offer as a tourist attraction and it is one of the top exporters of seafood products. For over a century, Sandakan has carried on barter trade with neighboring countries, especially southern Philippines.

Now, it is the top producer of palm oil in the state. The manufacturing sector such as wood-based products, blackboards and particle boards continue to play an important role in State economy.

Sandakan’s strategic geographical location makes it a pivotal point between Sabah and Southern Philippines, positioning it a trading hub in BIMP-EAGA. Due to its very good and logistic location, with Hong Kong, Macau, China, Japan, and Korea in the north east; Thailand, Myanmar, Laos, Cambodia, and Vietnam in the north; Indonesia, Australia and New Zealand in the South, Sandakan was once known as “Little Hong Kong”  

“This has made Sandakan the East Coast business hub,” said Chiang Kwok Kheng and Steven Wong Tien Fatt, the chairman and Secretary of the Sandakan Chinese Chamber of Commerce respectively.

Recalled IJM Plantation Sdn Bhd Chief Executive Officer Velayuthan Tan: “Back in the year 1995, IJM had ventured into huge cultivation of oil palms when the price was as low as RM90 per metric tone.”

He said his friend were laughing at him. Back then, there were poor basic amenities. Infrastructure was poor and there were no electricity and water supplies to their estates.

IJM had to came out with money to build its own roads and arrange its supplies of electricity by building generators. The company had to provide water supply and later built houses within its estates.

“ Palm oil is a long-term product. We are doing our little part to assist the local communities as well as to contribute to the development in Sandakan. The lifespan of oil palm is about 25 years. Therefore, for the first 25 years, we need to develop the land, invest and later do the harvesting,” said Tan.

“IJM covers almost 50 percent of the total cultivation of oil palm plantation in Sandakan. Let us assume that the price of crude palm oil is constant and remain unchanged, then for the next 25 years, IJM has to come out with RM2.25 million in term of labor and service. That means RM2.25 million would be channeled down and would be contributed to the development funds of Sandakan,” said Tan.

Banker Datuk Thomas Lau Chi Kiong said Sandakan paid the highest sales taxes for crude palm oil. “With the huge cultivation of oil palm by big planters, such as IOI, IJM and PPB, the revenues collected from the sales taxes annually would eventually bring a lot of benefits to the local business community in term of development,” he said.

Thomas said the palm oil sector plays an active and important role in bringing revenues and development to Sandakan to Sandakan. As a result, the state and Federal Government are providing loans for their civil servants to own houses. This further pushes the development of housing areas in Sandakan.

Sandakan is one of the top exporters of seafood products. “Doing business not only needs capital, but we must also have the knowledge, the skills and the network,” said one Mr Chua who has his own fleet of fishing vessels off the coast of Kudat.

Sandakan is also blessed with a rich biodiversity and thus contributes a lot to its ecotourism. With her mixture of people, lifestyle, cultures, and faiths, Sandakan in indeed a microcosm of modern Sabah. She has reserves in wildlife, including Sepilok, the world’s famous rehabilitation centre for orang utan, proboscis monkeys, brilliantly hued birds at the Rainforest Discovery Centre (also at Sepilok), crocodiles at Mile 8, Labuk Road , and pyramid elephants at Sukau.

Just off shore from the town is the famous Turtle Island, famously known as Pulau Siligan, where visitors may view rare and endangered marine turtles or indulge themselves in scuba diving at Lankayan Dive Resort.

Nearby are jungle –clad limestone outcrop-s with numerous caves from which bird’s nests have been collected for centuries, especially at Gomontung Caves in Sukau.

“There is still room for improvement in all the various tourist spots in Sandakan. The people here are friendly, helpful and polite. We like the new place,  The Sandakan Harbour Square (SHS), a joint venture redevelopment project between the Sandakan Municipal Council (SMC) and Ireka Charng Sdn.Bhd.

This project was planned as an urban renewal project turning the central business centre into a tourist destination. The SHS entails building features that include a modern central market, a town square for pedestrians, a seafront esplanade, a four-star international hotel, a shopping mall, a multistory car-park (with 1,000 lots) and 129 lots of shop houses and offices all on an area of 12 acres

SHS will be a focus of business activities. It will eventually become a financial centre because banks would move to this new central business districts.

Bank Rakyat Malaysia Berhad has accepted two shop lots and will move to its new place after the completion of the shop offices in December, 2008. Tabung Haji has occupied two shop lots, Guardians and Watson are there and a KFC outlet is enjoying brisk business at the seafront esplanade.

Habour Bristro& Café was set up to provide happy hours for both locals and foreign tourists and visitors. Bayview seafood Restaurant which is just at the other corner of SHS where the central market is situated, is fast becoming an attractive place for dinner functions and seafood hub.

With this urban renewal project, Sandakan town is never the same again as people used to say it is a “dead down” or “old folks town”. Now that SHS has brought some nightlife to the town centre, Sandakan has become alive with business activity running late into the once quite night.

Indeed, SHS is one of a kind town centre that capitalizes an the eco-beauty of the region with strategic location for tourism and commerce. “Due to security reasons, businessmen have moved their business premises from Leila Road to Labuk Road, Sandakan. They have concentrated all their business activities along Labuk Road in Bandar Indah (at Mile 5 ),” said Steven

“The new commercial areas at Bandar Maju (Mile 1.5, Labuk Road) and Bandar Labuk Jaya (Mile 7, Labuk Road) are still awaiting full occupancy,” he said.

“Business in Bandar Ramai Ramai and Bandar Leila have suffered. In order not to over concentrate along Labuk Road, the Government must take the lead by encouraging big companies such TM, DIGI, Celcom and Maxis and other new Government departments and agencies to set up their new offices along Leila Road,” Chiang chipped in.

Sandakan has established longstanding trading and cultural relations with the southern Philippine. For over a hundred years, Sandakan has had barter trade with the southern Philippine and the weekly ferry service between Zamboanga to Sandakan greatly helps to further boost trading activities.

When the University Malaysia Sabah (UMS) Sandakan campus is completed, Sandakan will also became an educational hub in the East Coast.

Sandakan has the potential to become the East Coast business hub and is set to be a harbour city in the near future.                       

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