JOHOR - SINGAPORE SPECIAL ECONOMIC ZONE (SEZ) - It's special alright - Overview by Nik Zafri

Note and Disclaimer : This article is part of a private online recent discussion between myself and interested parties. No confidential information, such as plans, drawings, or VR simulations or the likes are being disclosed in this article. I am sharing this piece voluntarily to promote Special Economic Zones (SEZ) to professionals and firms who may be exploring opportunities in this area. Additionally, I may serve as a key speaker on the subject. Inquiries and speaking invitations from any party are welcome, subject to terms and conditions.

The Johor-Singapore Special Economic Zone (SEZ) is a proposed cross-border economic zone that aims to integrate the economies of Johor, a state in southern Malaysia, and Singapore. This initiative is meant to promote closer economic cooperation and development between the two regions, capitalizing on their proximity and complementary economic strengths. 

In 2023, total trade between Malaysia and Singapore reached US$79.6 billion. Malaysia’s exports to Singapore were US$ 31.53 billion. The main exported goods were electrical and electronic equipment (US$9.38 billion), mineral fuels, oils, distillation products (US$9.73 billion), machinery, nuclear reactors and boilers (US$2.66 billion), pearls, precious stones, metals, coins (US$1.68 billion), and plastics (US$1.09 billion). 

Meanwhile, in the same year, Malaysia’s Exports to Singapore reached US$48.09 billion, and the main exported goods were electrical and electronic equipment (US$22.20 billion), mineral fuels, oils, distillation products (US$7.82 billion), machinery, nuclear reactors and boilers (US$4.69 billion), optical, photo, technical, medical apparatus (US$1.64 billion), and pearls, precious stones, metals, coins (US$0.89 billion). 

Source : ITC Trade Map

On January 11, 2024, Minister of Economic Affairs, Rafizi Ramli and Singapore’s Trade and Industry Minister signed a Memorandum of Understanding (MoU) outlining proposed joint initiatives to develop the region. The signing was witnessed by Malaysia's Prime Minister YAB Dato' Seri Anwar Ibrahim and Singapore's Prime Minister Lee Hsien Loong.

KEY FEATURES OF SEZ

Cross-Border Integration 

The Johor-Singapore SEZ is designed to foster greater economic integration between Johor and Singapore. This includes encouraging investment, trade, and labour movement across the border.

FOCUS AREAS AND SECTORS

The SEZ is expected to target specific sectors where Johor and Singapore can complement each other.

Manufacturing and Logistics

Johor’s Iskandar Malaysia Region already focuses on these sectors, benefiting from lower land and labour costs compared to Singapore.

Electronics and Electrical (E&E) Manufacturing 

This is one of the largest manufacturing sectors in Iskandar Malaysia, involving the production of semiconductors, consumer electronics, electrical components, and home appliances. For example, companies like Panasonic and Vishay Intertechnology have set up operations in Johor, producing components like capacitors, resistors, and sensors that are exported globally.

Automotive and Aerospace Manufacturing 

Iskandar Malaysia serves as a hub for automotive parts and component manufacturers. The region produces items like engine parts, electronics, tires, and other components. Companies like Berjaya Group and Toyota Tsusho have established facilities in Johor. Aerospace component manufacturers such as Upeca Aerotech also operate in Johor, producing parts for global aerospace giants like Boeing and Airbus. 

Food and Beverage (F&B) Processing

The food processing industry in Iskandar Malaysia involves processing raw agricultural products into packaged foods and beverages for export and local markets. This includes halal food production, given Malaysia's strength in the halal industry. For example, Nestlé has a significant presence in Johor, producing products like Milo, Maggi, and Nescafé for Southeast Asia.

Petrochemical and Chemical Manufacturing 

The region is also home to several petrochemical and chemical manufacturing plants, such as those producing plastics, resins, fertilizers, and industrial chemicals. Companies like Petronas have significant operations in Johor, particularly at the Pengerang Integrated Petroleum Complex (PIPC), which focuses on petrochemical and refinery activities.

Pharmaceutical and Biotechnology Manufacturing 

Iskandar Malaysia has been growing its footprint in pharmaceuticals and biotechnology, with companies involved in the production of generic medicines, medical devices, and biotech research. Biocon, an Indian biopharmaceutical giant, has established a large facility in Johor to manufacture insulin products for global markets.

LOGISTICS OF ISKANDAR MALAYSIA

Logistics involves the transportation, warehousing, distribution, and supply chain management of goods. The region benefits from its strategic location next to Singapore, access to ports, highways, and railways, and a growing network of logistics hubs.

E-COMMERCE FULFILLMENT CENTRES

The rise of e-commerce has led to the establishment of fulfillment centers in Iskandar Malaysia, where goods are stored, packed, and shipped to customers in Malaysia, Singapore, and the broader Southeast Asian region. Companies like Lazada and Shopee have invested in logistics infrastructure in Johor to support their operations.

Singapore and Malaysia are distinguished as leading mature e-commerce markets in Southeast Asia, characterized by high internet and smartphone penetration, affluent and tech-savvy consumer bases, sophisticated logistics and payment infrastructure, and supportive government policies. The e-commerce sector in Singapore is projected to grow at a Compound Annual Growth Rate (CAGR) of 11% over the next five years, while Malaysia's market is expected to experience a 14.32% growth rate during the same period.

Source : Growthops.Asia

TECHNOLOGY, SYSTEM AND PLANNED IMPLEMENTATION

Technology and Innovation - Leveraging Singapore’s status as a tech and innovation hub.  Technology and Innovation are key drivers of growth in both Johor’s Iskandar Malaysia and Singapore. Each region leverages its unique strengths to foster technological advancements and innovation, often complementing one another in areas like digital transformation, smart cities, artificial intelligence, and green technologies.

Data Centers and Cloud Computing - Iskandar Malaysia is emerging as a hub for data centers, benefiting from its strategic location, lower operating costs, and availability of land. Companies such as Bridge Data Centres and Keppel Data Centres have established facilities in Johor to cater to growing demand from Southeast Asia. These data centers support cloud computing, data storage, and disaster recovery services, catering to regional businesses and multinational corporations.

Smart City (Urban Intelligence) Initiatives - The Iskandar Malaysia is implementing smart city with elements of Urban Intelligence initiatives to improve urban living through technology. The Smart City Iskandar Malaysia (SCIM) framework focuses on smart governance, smart economy, smart mobility, and smart environment. Examples include the use of intelligent traffic management systems, energy-efficient buildings, and smart waste management solutions.

Innovation and Research Centres - Several innovation hubs and research centres in Iskandar Malaysia focus on advanced technologies. For instance, the Crescendo-HELP International School's Innovation Center fosters research in robotics, artificial intelligence (AI), and STEM education. The University of Southampton Malaysia Campus in Johor is involved in research and development (R&D) in engineering and technology.

Green Technology and Sustainability - Iskandar Malaysia promotes sustainable development and green technology through initiatives such as the Iskandar Malaysia Low Carbon Society project, which aims to reduce carbon emissions through the adoption of renewable energy, green building practices, and sustainable transport systems. The region also hosts solar panel manufacturers and other companies focused on clean energy solutions.

Advanced Manufacturing and Automation - The region is home to advanced manufacturing plants that use automation, robotics, and the Internet of Things (IoT) to enhance productivity and reduce costs. For example, companies in sectors like electronics, automotive, and aerospace are adopting Industry 4.0 technologies, such as D&S Solution (M) Sdn Bhd, which focuses on precision engineering and automation solutions.

Smart Nation Initiative - Singapore’s Smart Nation Initiative aims to transform the city-state into a leading digital economy and smart city through the integration of technology in governance, healthcare, transportation, and urban planning. Examples include a nationwide network of sensors and smart devices for public safety, autonomous vehicle trials, and digital payment systems.

Artificial Intelligence (AI) Development - Singapore is a regional leader in AI development, with government-led initiatives such as AI Singapore driving innovation. AI Singapore works on projects ranging from natural language processing to AI-driven healthcare solutions. Companies like Grab use AI to optimize ride-hailing and food delivery services.

Fintech and Digital Banking - Singapore is a global fintech hub, fostering innovation in digital banking, blockchain, and payment systems. Startups like Revolut, Nium, and TransferWise operate in the city, and major banks such as DBS and OCBC have launched digital banking platforms and robo-advisors.

1) Collaborative R&D and Innovation

Johor can serve as an extension of Singapore’s innovation ecosystem by providing space and cost advantages for research and development (R&D) facilities. For example, joint research initiatives in areas like AI, advanced manufacturing, and biotechnology could benefit from the resources and talent pools in both regions. 

2) Cross-Border Digital Economy

The close proximity and digital connectivity between Singapore and Johor enable cross-border digital trade, e-commerce, and fintech innovation. Singaporean startups and companies can leverage Johor’s infrastructure and workforce for regional expansion.

3) Smart City Development/Urban Intelligence 

Both regions can share best practices and collaborate on smart city solutions, such as intelligent transport systems, sustainable urban planning, and energy-efficient technologies, creating a seamless cross-border smart city ecosystem.

4) Supply Chain Optimization

Manufacturing and logistics hubs in Johor can support Singapore’s technology and innovation ecosystem by providing supply chain and distribution solutions for high-tech products, enabling cost-effective and efficient regional supply chains.

5) Education and Healthcare

Johor can serve as an expansion area for Singapore's education and healthcare services.

6) Tourism

Both regions aim to enhance tourism through shared marketing and improved connectivity. This will make the SEZ more viable, there are plans for infrastructure projects that improve connectivity between Johor and Singapore. For example:

 7) The Johor Bahru-Singapore Rapid Transit System (RTS) Link

A rail link connecting Johor Bahru and Singapore, set to ease traffic congestion and promote daily commuting.

8) Enhanced Road and Port Facilities

Upgrades to current road networks and port facilities to facilitate the movement of goods and people.

9) Simplified Regulations and Incentives

As a special economic zone, the SEZ may offer unique incentives to attract investors, such as tax breaks, streamlined regulations, and ease of doing business. These incentives would be designed to attract businesses that can benefit from a cross-border operational model, leveraging the advantages of both jurisdictions.

10) Labor Market and Workforce Synergy

The SEZ will likely include policies to promote the efficient movement of labor between Johor and Singapore, such as simplified visa processes or special permits for cross-border workers. This could help both regions address labor shortages and create a more dynamic workforce.

RELATION TO ISKANDAR MALAYSIA

The Johor-Singapore SEZ concept is closely related to the Iskandar Malaysia development, which is already a significant economic growth corridor in southern Johor. Iskandar Malaysia’s focus on industrial development, logistics, property development, and international education aligns well with the objectives of the SEZ, positioning it as a key component of this larger cross-border strategy.

CURRENT STATUS

While the idea of the Johor-Singapore Special Economic Zone has been discussed and promoted in various bilateral forums, it is still largely in the conceptual stage. Key projects like the RTS link are already underway, but a comprehensive, formal agreement defining the specifics of the SEZ, such as its regulatory framework, incentives, and governance structure, has not yet been finalized.

CONCLUSION

The Johor-Singapore Special Economic Zone is a proposed initiative to create a tightly integrated cross-border economic region between Johor in Malaysia and Singapore. It aims to capitalize on their geographic proximity and economic complementarities to drive growth, enhance connectivity, and foster bilateral cooperation. While the concept is promising, its full realization depends on continued negotiations and strategic planning between both governments.

ELMINA RIDGE LANDSLIDE

https://www.linkedin.com/feed/update/urn:li:activity:7239271557565427712/

Quote : 

SHAH ALAM: Two Bangladeshi construction workers died after being buried in a landslide in an incident at a concrete drain construction site in Elmina Ridge, Section U15 here today.

In the incident at about 10 am, the victims were working on the construction of a 0.3 m deep drain in the housing area.

Upon inspection, firemen found that the victims were buried by earth and concrete of the U box culvert while they were doing drainage construction work.

Meanwhile, Shah Alam district police chief ACP Mohd Iqbal Ibrahim said his investigation found that at the time of the incident, there were three workers who were installing concrete drains at the location involved.

He said the ground at the side of the drain suddenly collapsed causing the concrete wall of the drain to break and fall on one of the workers and the other was buried by the falling earth.

Photo Source : Bernama

MY PERSONAL OPINION

Let's first look into the typical construction methodology (excerpt from a method statement)

TYPICAL RISK, DANGERS AND HAZARDS DURING U-BOX CULVER INSTALLATION

1) Trench Collapse

The sides of the trench may collapse, especially if the soil is unstable or the trench is deep.

1.1  Preventive Measures

Use trench shoring, trench boxes, or sloping to prevent collapse. Workers should avoid working in trenches without proper protective systems.

2) Heavy Equipment Hazards

Risks associated with the operation of heavy machinery like cranes, excavators, and trucks. These include crushing, falling objects, and equipment malfunction.

Note : Please be aware that limited working space between heavy equipment, such as a crane, and the excavation area can impact the soil load and potentially lead to a collapse.

2.1 Preventive Measures

Ensure proper training and certification of operators, maintain equipment, and establish clear communication and signaling protocols.

Ensure the placement of heavy equipment such as cranes are placed at the appropriate position during excavation. The working space between the crane and the excavation area must be adequate.

3) Falls

Workers can fall into the trench or off equipment.

3.1 Preventive Measures

Install guardrails, barriers, or fencing around open trenches, and ensure workers use harnesses or fall protection gear when necessary.

4) Water Accumulation

Water can accumulate in the trench, leading to slippery conditions or creating a drowning hazard.

4.1 Preventive Measures

Ensure proper drainage and dewatering systems are in place before excavation begins.

5) Exposure to Hazardous Materials

Workers may be exposed to hazardous materials such as contaminated soil or underground utilities.

5.1 Preventive Measures

Conduct a site survey for potential hazards and use appropriate personal protective equipment (PPE).

6) Utility Interference

Risk of damaging underground utilities (like gas, water, or electrical lines) during excavation.

6.2 Preventive Measures

Conduct a utility survey and mark utility locations before excavation. Follow local regulations for safe digging.

INCLEMENT WEATHER

During the rainy season, the ground becomes saturated with water, which can reduce soil stability. This makes the soil more prone to collapsing, especially if the trench walls are not properly supported or shored. Saturated soil can be heavier and less cohesive, increasing the risk of a trench collapse, which poses a safety hazard and can delay the installation process.

Water Accumulation in Trenches

Rainwater can accumulate in the open trenches, creating additional challenges for the installation of the culvert. Waterlogged trenches may require dewatering before installation can proceed, which can add time, effort, and cost to the project.

Difficulties in Compaction and Backfilling

Proper compaction of the backfill material is essential for ensuring the structural stability and longevity of the culvert. However, wet conditions make it difficult to achieve the required compaction levels. Wet or muddy soil may not compact well, potentially leading to settlement issues in the future.

Logistical Challenges

Heavy rain can disrupt transportation of materials and equipment, affect worker safety, and make the construction site more challenging to navigate.

Damage to Installed Structures

Rain can cause erosion around the newly installed culvert if drainage and runoff are not adequately managed, potentially undermining the structure before it is fully set.

DO IT DURING DRY SEASON

Benefits

Reduced Water Interference During the dry season, there is minimal or no water flow in the drainage channel, making it easier to excavate, place, and align the culvert without the risk of flooding or waterlogging.

Improved Safety

Lower water levels reduce the risk of trench collapse and other water-related hazards, such as slippery conditions or equipment getting stuck in mud.

Better Soil Conditions

Dry soil is generally more stable, making excavation and backfilling easier and more effective. It also reduces the risk of soil erosion or settling, which could compromise the culvert's installation.

Efficient Construction

Work can proceed faster in dry conditions since there are fewer weather-related delays, allowing for a more efficient and timely installation.

Typical Safety Slope for Trench Walls

To prevent trench collapse, especially in deeper trenches or in unstable soil conditions, the trench walls should be sloped or benched according to safety standards. The appropriate angle of the slope depends on soil type:

Stable soil

A slope of 1:1 (45 degrees) is typically used.

Less stable soil: A slope of 1.5:1 or even 2:1 (about 33 to 27 degrees) may be necessary.