KOTA KINABALU: POIC Sabah Sdn Bhd has signed a leasing agreement with South Korean conglomerate Dongnam A Circular Co Ltd (Dongnam) to set up a logistics base in Lahad Datu.
The deal is for the leasing of 1.82 hectares of land for a tenure of 20 years, with an option to continue for another 20 years.
The agreement was signed between POIC Sabah chief executive officer Datuk Fredian Gan and Dongnam president Hwang Su Man at the POIC Sabah head office in Kota Kinabalu on Sept 30.
It was witnessed by state Industrial Development Ministry deputy permanent secretary Benedick Bisoni, Dongnam international sales director You Jang Woo, POIC Sabah chairman Datuk Seri Panglima Yong Teck Lee and its board of directors.
POIC Sabah Sdn Bhd is the developer for POIC Lahad Datu.
Gan described the agreement as a recognition by Dongnam toward POIC Lahad Datu and the Sabah east coast as an ideal staging post for markets in East ASEAN, and the overall economic potentials of the region.
"The entry of Dongnam is timely and points to the immense potentials to further strengthen the involvement of Korean companies on Sabah's east coast.
"We look forward to facilitating the entry of consortium members of Dongnam into Lahad Datu," said Gan.
He was referring to Dongnam being a consortium of 30 companies involved in a diversified range of businesses from shipping to manufacturing.
The signing marked the conclusion of a negotiation which began in 2019, and was interrupted by two years of Covid-19 restrictions.
The Dongnam group is currently developing the Busan New Port West Container Complex Logistic Terminal.
Its shipping and logistics network worldwide will be an asset to POIC Lahad Datu, which, being a relatively new port in operation since 2013, is developing its shipping connectivity.
The Korean government last year granted Dongnam permission to operate the POIC-Busan shipping route.
This significantly granted Busan as being one of the most important ports in Korea.
Aside from cargo storage, assembly and distribution, Dongnam intends to use Lahad Datu to develop a trading system linking Korea's industrial prowess with the renowned vast natural resources in Sabah and the surrounding territories of Philippines, Indonesia and Brunei.
Some resources on the export list include frozen seafood, palm kernel shells and sludge oil (residue from palm oil refineries, wood pellets and wood furniture).
POIC has been informed that some of Dongnam's member companies are already planning to set up factories at POIC Lahad Datu, and ship to Sabah Korean products such as food and construction materials.
This near future development will contribute to greater cargo throughout via POIC Lahad Datu Port comprising POIC's liquid, dry and container terminals, said Gan.