Clarify measures to raise Sabah’s GDP through manufacturing industry, Tuaran MP tells Miti

KOTA KINABALU (Jan 28): Tuaran MP Datuk Seri Panglima Madius Tangau has called on the Ministry of Investment, Trade and Industry (Miti) to outline specific measures by the federal government to help Sabah’s manufacturing sector contribute 20 per cent of the state’s Gross Domestic Product (GDP).

He raised the oral question during the Dewan Rakyat sitting, stressing the need for a structured, high-impact approach to drive growth in Sabah’s manufacturing industry.

In a written reply, Miti said Sabah has significant natural resources, including oil and gas, timber, minerals, and palm oil, which can be leveraged through downstream manufacturing.

According to Miti, through the New Industrial Master Plan 2030 (NIMP 2030), the federal government has outlined strategies to encourage investment in downstream activities based on local natural resources in order to enhance the economic value added of states, including Sabah.

“The Fourth Mission of NIMP 2030 emphasises economic security and inclusivity, by ensuring more equitable participation in the manufacturing sector.

“Its implementation is not confined to specific areas alone, but instead encompasses comprehensive development across existing and new economic clusters,” the ministry said.

Miti added that the implementation of NIMP 2030 also supports projects across 21 identified sectors, including new growth sectors such as electric vehicles (EVs), advanced materials, carbon capture, utilisation and storage (CCUS), as well as renewable energy.

At the same time, the federal government remains ready to conduct continuous engagement sessions with the Sabah government to ensure alignment between federal- and state-level development strategies, while leveraging local strengths and capabilities to unlock economic growth potential.

In terms of investment performance, the ministry noted that Sabah’s manufacturing sector recorded encouraging achievements from 2020 to September 2025, with 101 manufacturing projects registered involving a total investment value of RM36.72 billion.

“In 2025 alone, up to the third quarter, a total of 16 manufacturing projects were approved with an investment value of RM7.54 billion, creating 1,728 job opportunities.

“Based on detailed data for 2025, manufacturing activities in Sabah were driven by heavy industries, with the basic metal products sub-sector recording the highest investment at RM6.59 billion, followed by transport equipment at RM586.3 million, and chemicals and chemical products at RM140.4 million.

“Sabah has also continued to attract foreign investors, particularly from East Asia and Asean. For the period 2020 to 2024, China emerged as the largest investor with RM8.5 billion, followed by the Republic of Korea at RM4.37 billion.

“This momentum continued in 2025, with Singapore becoming the main investor with commitments amounting to RM6.59 billion,” Miti added.

To support the growth of the manufacturing sector, the federal government is also focusing on the development of modern infrastructure, including upgrades to roads, electricity supply and clean water in Sabah, with a total development allocation of RM6.9 billion in 2025.

Among the key projects is the upgrading of the Sapangar Bay Container Port, which is expected to be completed in 2027, increasing its annual capacity from 500,000 TEUs to 1.25 million TEUs and strengthening industrial logistics efficiency.

In addition, the government is driving quality and strategic investments by targeting the oil and gas sector, green products, renewable energy and the blue economy, including high-technology downstream development at the Palm Oil Industrial Cluster (POIC) in Lahad Datu.

On incentives, the New Investment Incentive Framework (NIIF), which is expected to be fully implemented in the first quarter of 2026, is anticipated to be a key catalyst, with incentives assessed based on actual outcomes such as the creation of quality jobs, technology transfer and the development of local supply chains.

“The success of increasing the manufacturing sector’s contribution to Sabah’s GDP depends on close cooperation between the federal government and the state government, including efforts to develop local human capital through collaboration between industry and institutions of higher learning.

“This comprehensive approach aims to transform Sabah into a competitive hub for downstream manufacturing and renewable energy, thereby contributing significantly to the economic growth of the state and the nation,” the ministry explained.