Is it logical to have a Proton factory in Sabah?

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Sabah’s Chief Minister wants a Proton fabrication plant in Sabah as part of his growth strategy for the state. He says that the state would benefit because:

  1. It would position the state close to Japan, China, Hong Kong and soon-to-be-relocated Indonesian capital in Kalimantan.
  2. Sabah ‘is to have an international harbour’ in Kudat and this would make Sabah the most suitable state to have a Proton factory.
  3. With the existence of a fabrication factory, there will be numerous job opportunities.

If these are reasons for the Proton plant to be located in Sabah, then the Chief Minister had better think twice.

One would wonder if the chief minister had thoroughly thought through the plan before issuing the ‘forward-looking’ statement. Was it done to impress Sabahans? In fact, issuing such a statement merely reflects his lack of understanding of the subject matter. Why?

Proton made its debut in China way back in 2007 and established a CKD plant through its partnership with a local Chinese partner. Back in 2018, through the collaboration between Proton Holdings and Zhejiang Geely Holding Group, a joint venture was established to set-up a manufacturing and assembly plant in China. So, what is the CM talking about penetrating China?  

Similarly, does it make sense for Proton to enter the highly saturated and competitive vehicle markets like Japan, Korea and Hong Kong (if it is not already there)? Save for Hong Kong, which is accustomed to luxury models like Rolls Royces, Bentleys, Lamborghini and so forth, why go into markets that are already global manufacturers of top-notch models?  

And what has the Jakarta’s capital relocation to Kalimantan got to do with increased Proton car sales? How can Sabah bring value when Proton has already established collaborations in Indonesia more than a decade ago? 

Kudat, an international harbour? In October 2018, the Brunei Darussalam-Indonesia-Malaysia-Philippines East Asean Growth Area (BIMP-EAGA) Business Council (BEBC) invited China to invest in making Kudat Port a transhipment port for BIMP-EAGA.

The Council’s Datuk Roselan Johar Mohamed invited China to submit a proposal to design, construct and manage a new container cum general cargo port for 21 years and thereafter to hand over the port to the Government for RM1. The outcome was not clearly communicated although it was mentioned that the project failed because of funding reasons.

So, one year later the port remains status quo. Where is the planned international harbour?  

On employment, if Proton were to establish an assembly plant in Sabah and assuming the creation of value supply chain, etc. job creation will be insignificant because of new technologies and automation at the plant.

The chief minister should instead commission a comprehensive study on Sabah’s economic growth potentials – medium and long term to determine the investment strategies and markets to develop, with particular emphasis on ‘Green’ economy. In the long term this would position Sabah as a state with foresight and driven by sustainable fundamentals and resources for the benefit and well-being of all Sabahans.

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