·........

AN EMPIRICAL ANALYSIS OF THE PRODUCTIVITY OF SARA WAK'S MANUFACTURING S~CTOR

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He 110 M3 T384

Catherine Then Fui Yean

- Kota Samarahan

2004

P.KHIDMAT MAKLUMAT AKADEMIK UNIMAS

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KbJl!bDzt ~labmml ,m MALAYSIA SARAw'

94"'00 Kota Samaraban

AN EMPIRICAL ANALYSIS OF THE PRODUCTIVITY OF SARAWAK'S

MANUFACTURING SECTOR

By

Catherine Then Fui Yean

A Research Paper Submitted in Partial Fulfilment of the Requirement For the Degree of Corporate Master in Business Administration

Faculty of Economics and Business Universiti Malaysia Sarawak

2004

APPROVAL PAGE

I certify that I have supervised and read this study and that in my opinion it conforms to acceptable standards of scholarly presentation and is fully adequate, in scope and quality as a research paper for the degree of Corporate Master in Business and Administration

Name : Mr. Hamri Tuah

Supervisor

This research paper was submitted to the Faculty of Economics and Business, UNIMAS and is accepted as partial fulfillment of the requirements for the degree of Corporate Master of Economics and Business .

..­Name:

Dean, Faculty . conomics and Business (FEB)

UNlMAS

ii

OfOJ -18bbD

DECLARATION AND COPYRIGHT

Name Catherine Then Fui Yean

Matric Number 02-02-0705

I hereby declare that this research is the result of my own investigations, except where otherwise stated. Other sources are acknowledged by footnotes giving explicit references and a bibliography is appended .

Signature:

Date

"

............ . ~.: .................. .

~ %. 0 b· JOO~

Copyright by Catherine Then Fui Yean and University Malaysia Sarawak

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ACKNOWLEDGEMENT

The completion of this research thesis was made possible through the generous, continuous and untiring efforts of many people. In particular, I wish to thank the Supervisor of the thesis paper, Mr. Hamri Tuah for being so patient and painstakingly guiding and advising me throughout the year of writing this research.

I would also like to take this opportunity to thank Dr Rujhan Mustapha, for his advice and guidance in the early days of my research and not forgetting Associate Professor Dr. Shazali Abu Mansor, the Dean of the Faculty of Economics and Business for his support.

Last but not least, I wish to extend my appreciation to all family members who have helped in one way or another as well as to many of my colleagues and friends who have given me a lot of moral support during the course of my CMBA study.

ABSTRACT

This research paper is an empirical study on the productivity of the manufacturing sector in Sarawak. The manufacturing sector is an important source of Sarawak's revenue. Therefore, it is important to identifY the factors that contribute to the productivity of this sector to enable the optimum use of resources and to optimize output.

The study proved that Sarawak had an input-driven economy in the nineteen eighties and the nineteen nineties as labour and capital productivity were important sources of productivity. However, the economy of Sarawak is moving towards a productivity-driven trend as technical advancements are making greater impacts on the economy. It is also proven that labour productivity is more important than capital productivity in Sarawak's Industrial Chemicals Industry, Wood and Wood Products Industry and the Food Industries.

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ABSTRAK

Kertas kajian ini merupakan satu kajian mengenai produktiviti Sektor Pembuatan di Sarawak. Sektor Pembuatan merupakan satu sektor yang semakin banyak menyumbangkan kepada Keluaran Dalam Negara Kasar (KDNK) Sarawak. Maka ia harus diberikan perhatian supaya dapat menambahkan lagi kepada pertumbuhan ekonomi Sarawak.

Kajian ini dijalankan untuk menentukan faktor-faktor yang mempengaruhi produktiviti Sektor Pembuatan di Sarawak. Hasilnya, Sektor Pembuatan di negeri ini banyak dipengaruhi oleh produktiviti buruh dan modal pada tempoh masa lapan puluhan dan sembilan puluhan. lni menunjukkan bahawa ekonomi Sarawak lebih dipengaruhi oleh sumber input pada masa itu. Walau bagaimanapun, ekonomi Sarawak kini lebih dipengaruhi oleh produktiviti daripada input. Dalam kajian untuk Industri Kimia Industri, Industri Kayu dan HasH Kayu serta Industri Makanan, didapati produktivit modal lebih penting daripada buruh.

T ABLE OF CONTENTS

Approval Page ....................................................... : 11

Table of Contents ............... ... ....... ......... ........... ...... VB

List of Figures ............................ .. ........................ Xl

Declaration and Copyright Page ................................... 111

Acknowledgements ................................................. IV

Abstract ............................................................. v

Abstrak ..................................... ......................... VI

List ofTables ..................................................... ... x

Abbreviations ...................................................... xu

1.0 INTRODUCTION 1.1 Background of Study. . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . 1 1.2 Problem Statement ..................................... 3 1.3 Objectives of the Study ................................. 3 1.4 Theoretical Framework................................. 4 1.5 Scope of Study .......................................... 4 1.6 Significance of Study ..................................... 5 1.7 Limitations of Study ...................................... 5 1.8 Organization of Chapters ................ ....... ...... ... 6

2.0 THE MANUFACTURING SECTOR OF SARA W AK 2.1 Types of Industries ....................................... 7 2.2 Industrial Zones .................................. .. 7 2.3 Industrial Development .... . . . . . . . . . . . . . . . . . . . . . . . . . .. 8 2.4 Contribution of the Manufacturing Sector to GDP ... 9 2.5 Contribution of the Manufacturing Sector to Employment 9

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2.6 Trend in the Manufacturing Sector ofSarawak ............ 11 2.7 Contribution of the Manufacturing Sector to Exports 12 2.8 Investments in Sarawak ... ... ........ ....... ... ..... .... 13 2.9 The Future of the Manufacturing Sector ......... .... 16

3.0 LITERATURE REVIEW 3.1 Productivity Studies in Other Countries ...... .... 16 3.2 Studies on the Productivity of Malaysia ......... 19 3.3 Productivity Studies on Sarawak ...... . . . . . . . . ... 24

4.0 RESEARCH METHODOLOGY 4.1 Data .................. ..... ....... ...... ... ... ......... ..... 24 4.2 Definition ofVariables ................... .............. 25

4.2.1 Labour Productivity .............................. 25 4.2.2 Capital Productivity .............................. 26 4.2.3 CapitalIntensity ................................ ... 26 4.2.4 Wage-Labour Ratio .............................. 26 4.2.5 Total Factor Productivity ........................ 26

4.3 The Specification Model .............................. 27 4.4 Model Analysis ........................................ 27

5.0 RESEARCH FINDINGS AND DISCUSSIONS 5.1 Introduction ............................................ . 28 5.2 The Productivity of the Manufacturing Sector ..... . 28

5.2.1 Gross Domestic Product ....................... . 28 5.2.2 Employment Creation .......................... . 29 5.2.3 Salaries and Wages ............................. . 29 5.2.4 Value Added .................................... . 29 5.2.5 Labour Productivity ............................. 30 5.2.6 Capital Productivity ........................ . 30 5.2.7 Capital Intensity ................................. . 31 5.2.8 Wage-Labour Ratio ........................... . 31

5.3 Factor Productivity of the Manufacturing Sector .. 31 5.3.1 Modell ........................................... . 32 5.3.2 Model2 .................................................. . 33 5.3.3 Model3 .......................................... . 34

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5.3.4 Model 4 ................................ .... ....... 35 5.4 The Productivity ofThree Main Industries ... ...... 36

5.4.1 The Industrial Chemicals Industry ............ 38 5.4.2 The Wood and Wood Products Industry ..... 40 5.4.3 The Food Industry ............................... 42

6.0 CONCLUSIONS AND RECOMMENDATIONS 6.1 Conclusions .............."............................. 45 6.2 Recommendations ................................... 47

6.2.1 Implement PLWS ............................ 47 6.2.2 Implement Higher Value Added Activities 47 6.2.3 Development of Supporting Industries ... 47 6.2.4 Emphasis on Research and Development. 48 6.2.5 Multi-Skilling ................................ 48 6.2.6 Quality Control Circles..................... 48 6.2.7 Education & Training of the Workforce 49 6.2.8 IT/AMT Grants for SMis ................... 49 6.2.9 Improved Infrastructure .......... ........ ... 50 6.2.10 Collect Up-To-Date Data ...... ... .. . ....... 50

6.3 Policy Implications .................................. 50 6.4 Direction for Future Research ...................... 51

6.4.1 Study the Agricultural and Services Sectors 51 6.4.2 Compare the Growth and Productivity of the

Manufacturing Sector . . . . . . . . . . . . . . . . . . . . . . 51 6.4.3 Measure and Compare the Marginal Labour

Productivity and Capital Productivity. . . . . . 52

BIBLIOGRAPHY

IX

LIST OF TABLES

Table No. Page

2.1 The Manufacturing Sector's Annual Growth and Contribution to GDP 9

2.2 The Manufacturing Sector's Workforce 10

2.3 The Components of the Manufacturing Sector 11

2.4 The Contribution ofManufactured Goods to Exports 12

2.5 Domestic and Foreign Investments in Sarawak 13

2.6 I CA and I CC Investments in Sarawak 14

2.7 Foreign Investments in Approved Projects 15

5.1 The GDP, Value Added, Fixed Assets, Wages of the Manufacturing Sector 27

5.2 The Productivity of the Manufacturing Sector 28

5.3 The Industries of the Manufacturing Sector 37

5.4 The Productivity of the Industrial Chemicals Industry 38

5.5 The Productivity of the Wood and Wood Products Industry 41

5.6 The Productivity of the Food Industry 43

LIST OF FIGURES

Figure No Page

2.1 No of Workers in the Manufacturing Sector 10

5.1 The Productivity of the Industrial Chemicals Industry 39

5.2 The Productivity of the Wood and Wood Products Industry 42

5.3 The Productivity of the Food Industry 44

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ABBREVIATIONS

AMT BDA FDI GDP ICA ICC IT LNG MIDA MID MITI MSC NIC NPC OLS PLWS QCC R&D SEDC SPSS SMI STIDC

TFP TNC

Advanced Manufacturing Technology Bintulu Development Authority Foreign Direct Investment Gross Domestic Product Investment Council Authority Investment Council Committee Information Technology Liquified Natural Gas Malaysian Industrial Development Authority Ministry of Industrial Development Ministry of International Trade and Industry Multimedia Super Corridor Newly Industrialized Country National Productivity Centre Ordinary Least Squares Productivity-Linked Wage System Quality Control Circle Research and Productivity Sarawak Economic Development Corporation Statistical Package for Social Science Small and Medium Industries Sarawak Timber Industry Development Corporation Total Factor Productivity Transnational Companies

1.0 INTRODUCTION

1.1 Background of Study

The Malaysian economy was predominantly dependent on the primary sector during the 1950s and the 1960s. However, the instability of primary products forced the government to look to an alternative to boost the country's economic growth. The manufacturing sector was seen as a better alternative to primary products.

The industrial development of Malaysia started in the 1960s. The emphasis then was on the processing of natural resources and simple consumer goods for domestic consumption. In the 1970s, there was a significant shift from import-substitution to the promotion of exports as evident in labour-intensive industries such as textiles and electronics, rubber and palm oil processing and wood-based industries. Thus, in the 1970s, the manufacturing sector became the leading sector in the expansion ofthe Malaysian economy in terms of growth of output, exports and employment. Value added in the manufacturing sector grew by 16.1 per cent between 1971 and 1973 but fell to 14.3 per cent between 1976 and 1978 due to the crude oil crisis and the world recession. The manufacturing sector grew at an average rate of 11.7 per cent between 1970 and 1980 due to the rapid growth of resource-based industries.

In the 1980s, the manufacturing sector was boosted by the Industrial Master Plan (1986). The introduction of the Promotion of Investments Act (1986) and the amendments made to the Income Tax Act provided liberal investment opportunities for potential investors. From 1981 to 1990, the manufacturing sector grew at an average rate of9.2 per cent per annum. The main contributors to growth were the electrical and electronics industry as well as the textile industry.

In the 1990s, further measures were taken to enhance the growth of the manufacturing sector. These include encouraging selective investments, setting up of the Industrial Adjustment Fund (1991) and the Domestic Investment Initiative as well as to vigorously pursue Foreign-Direct Investments. The chemical and chemical products, petroleum and petrochemical products, electrical and electronic products and basic metal products industries received the most Foreign Direct Investments in 1998.

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Sarawak is predominantly an economy which is highly dependable on primary products. In 1995, the primary sector still accounted for 35 per cent of its Gross Domestic Product. The manufacturing and construction sector is just beginning to gain its threshold In

Sarawak's economy and is projected to increase its contribution to the Gross Domestic Product.

From 1950 to 1970, the major exports from Sarawak included petroleum and petroleum products, forestry products and agricultural products. The contribution of the manufacturing sector to the Gross Domestic Product of Sarawak was almost negligible during that period.

From 1971 to 1980, there was the development of resource-based industries. This includes the downstream processing and manufacturing of Sarawak's agricultural and mineral products. Structurally, there was a shift from agricultural to mining and manufacturing. In 1979, manufacturing contributed 8.1 per cent towards Gross Domestic Product growth but by 1980, it had increased to 16.7 per cent.

By 1995, the manufacturing sector of Sarawak became the second largest contributor towards the Gross Domestic Product of Sarawak at 23.7 per cent and 21 per cent in 2000. Employment in the manufacturing sector had increased to 63,000 workers or 9.1 per cent in 1990 and 14 per cent in 2000. This has been made possible due to the large amount of Foreign Direct Investment flowing into the state of Sarawak. Between 1980 and 1995, Sarawak attracted over seven billion Ringgit of foreign direct investment. According to the Malaysian Industrial Development Authority (unpublished data), four industries, namely the wood and wood products, food manufacturing, mineral and non-metallic mineral products and chemical and chemical products received the most investments.

In view of the growing importance of the manufacturing sector towards the economy of Sarawak, this research aims to examine the productivity of the manufacturing sector in greater detail so that optimum output can be achieved.

1.2 Problem Statement

It has been observed that the structure of Sarawak's economy has undergone tremendous changes in the last two decades. One of the most significant changes is that the economy is no longer dependent on primary commodities as its main exports. Today, products such as rubber, cocoa and palm oil are not very significant exports. It has also been seen that the State's Gross Domestic Product was growing at a very healthy level in the 1980s up to the time before the fmancial crisis which affected the economy from 1997 to 1998. In fact, Sarawak was badly affected by that financial crisis and registered a negative growth of7.3 per cent in 1998.

In contrast, the contribution of the secondary sector to the State's Gross Domestic Product has been increasing since 1980. This is mainly due to the rapid growth of the manufacturing sector especially during the industrial phases of development which began in 1971. The emphasis on export-led industrial development met with much success during this period. The contribution of the manufacturing sector to Gross Domestic Product increased tremendously from 12.3 per cent in 1980 to 30 per cent in 1999. This proves that the manufacturing sector is the catalyst for growth in Sarawak's economy.

Although a few studies have been done to examine the growth of Sarawak's economy, they were not exhaustive studies because they were merely to examine the growth rates. It is important to determine the growth rate of Sarawak in the last decade and examine the specific factors that affect the growth of the manufacturing sector so that Sarawak can sustain its high-profile economic growth for the next decade in this challenging era of globalization. It is commonly acknowledged that productivity-driven growth is more sustainable than input-driven growth. An empirical analysis is necessary to ascertain the real productivity performance of the manufacturing industries for future policies in both the private and private sectors.

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1.3 Objectives of the Study

The objectives of this study are as follows: i) To detennine the productivity of the Manufacturing Sector

of Sarawak from 1980 to 2000 and ii) To examine the productivity of the Industrial Chemicals

Industry, the Wood and Wood Products Industry and the Food Industry in Sarawak from 1990 to 2000

1.4 Theoretical Framework·

There have been many studies done on the productivity and growth of the manufacturing sector in Malaysia. Among them are articles by Singh and Maisom (2001), Tham (1995) and Elsadig Musa, Khalid and Zakariah Abdul Rashid (2002).

In general, it was found that the manufacturing sector plays an important role in the growth of the Malaysian economy. However, the productivity is not always in tandem with the economic growth. The sustainability of high economic growth depends greatly on productivity which emphasizes on the quality of he workforce, technical progress and research and development. The Cobb-Douglas Production function will be used to analyze the growth and productivity of the manufacturing sector of Sarawak. The dependent factor is output measured as value added while the independent variables include fixed assets proxy to capital productivity and number of employees proxy to labour productivity and output per employee proxy to wages.

1.5 Scope of Study

This study will examine the productivity of the manufacturing sector of Sarawak from 1980 to 2000. For growth, the Gross Domestic Product of Sarawak will be used as a proxy while productivity will be studied in terms of labour productivity, capital productivity, capital intensity and wage-labour ratio.

There will also be an analysis of three industries in the manufacturing sector. The industrial chemicals industry, the wood and wood

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products industry as well as the food industry will be examined in tenns of their respective productivity.

1.6 Significance of Study

This research study will provide an overview of the, economic growth of Sarawak, particularly in the manufacturing sector, in the last decade or two. It will enable economic planners to grasp the overall situation for the past ten to twenty years and may enable them to use it for planning the future economic status of Sarawak .•

In particular, the study on the productivity of Sarawak will be very useful as there are not many previous studies done on the productivity of the sectors in Sarawak. Specifically, the factors that contribute to productivity will be of interest to economic planners in enhancing the productivity of the manufacturing sector of Sarawak.

The economic development of Sarawak will be analyzed to determine the pace of development in the state. In particular, the different factors that contribute to the development process will be examined and their performance improved if necessary.

This research will also serve as a guideline to economic policy makers in Sarawak so that our resources will be utilized to the optimum. It will also enrich the literature on the productivity of the manufacturing sector of Sarawak.

1.7 Limitations of the Study

The gross domestic product is used to measure economic growth. In tenns of productivity, very limited data can be obtained. Labour productivity is measured using the figures for the total number of employed persons and the value added from the Sarawak Statistics Yearbook. Likewise the capital productivity is estimated from the value of the fixed assets and the value added.

As far as the manufacturing Sector is concerned, the industries in this study will include only those which are licensed. Those that do not apply for licenses will not be included because they are not recorded.

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Some of the data for the years 2001 up to 2003 could not be obtained and thus this study is done only up to the year 2000.

1.8 Organization of Chapters

Chapter one provides the background, objectives, scope and coverage of the study. Chapter two will examine the status of the manufacturing sector in Sarawak. Chapter three presents the existing literature review on the economic growth, productivity and development of with special emphasis on the manufacturing sector. Chapter four discusses the research methodology used in this study. Chapter five presents the research fmdings and discussions. Chapter six will highlight the conclusion and recommendations.

2.0 THE MANUFACTURING SECTOR IN SARAWAK

Sarawak's economy had always depended on the primary sector from the 1960s through to the 1970s and even up to the 1980s. For instance, in 1980, the manufacturing sector contributed a mere 7.7 percent to the state's Gross Domestic Product. However, the government was far-sighted enough to begin a series of restructuring in the early 1980s to enable the State's economy to diversify from being merely producing primary commodities to that of being able to produce manufactured products.

2.1 Types of Industries

There are a total ofnineteen different types of industries in Sarawak's manufacturing sector. In the year 2000, the food manufacturing industry has the most number of establishments with a total of 334 establishments. In second place is the manufacture of textile and wearing apparel sub sector with 326 establishments followed closely by the manufacture of fabricated metal products sub sector with 278 . establishments. In fourth place is the manufacture of wood, wood and cork products industry with 242 establishments. (Yearbook of Statistics, Sarawak, 2000)

The timely establishment of the Ministry of Industrial Development in 1987 enhanced the development of the manufacturing sector. Initially the development was mainly towards the resource-based industry as Sarawak is endowed with a vast amount of rich resources. The contribution of the manufacturing sector towards the State's Gross Domestic Product was 8.6 per cent in 1987 and it improved to 22.5 per cent in 2000.

2.2 Industrial Zones

Samajaya Free Industrial Zone which has an area of 813 hectares, was established in 1991. This project was significant as it set the pace for the growth and development of non-resource based industries such as electronic industries, high-tech industries as well as knowledge-based industries . . The Kuala Baram Industrial Estate which has an area of 1564 hectares provides for wood based, shipbuilding repairs and engineering works. The Tanjung Kidurong

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Industrial Area with an area of 91 hectares is meant for petroleum, petrochemicals and heavy industries.

The other industrial estates found in Sarawak include the Sejingkat Industrial Park, the Demak Laut Industrial Estate and the Kota Samarahan Industrial Estate developed for mixed industries. There are also two areas marked for mixed light industries. They are Sarikei and Mukah Light Industrial Areas.

2.3 Industrial Development

In the 1960s, the manufacturing industry was insignificant, growing at about three per cent per annum and contributing to only 2.5 per cent of the Gross Domestic Product (Jackson, 1968). Most of the manufacturing activities were carried out by small, private establishments based on local raw materials such as rubber and pepper processing, sago and copra milling, timber processing and oil refining. The industries were labour intensive and orily simple production methods were used. Sawmilling was the most important industrial activity at that time.

In the late 1970s, a few organizations were set up to provide the impetus for industrial development in Sarawak. They include Sarawak Economic Development Corporation (SEDC), Malaysian Industrial Development Authority (MIDA), Ministry of International Trade and Industry (MITI), Sarawak Timber Industrial Development Corporation (STIDC) and Bintulu Development Authority (BDA).

The new industrialization policy emphasizes on value added and export-oriented industries. Thus, the manufacturing industry gained significance and was growing at about eight per cent during this period. However, most of the industries were centred in the major towns ofKuching, Sibu and Miri.

In 1981, Sarawak entered the third phase of its industrial development that is known as the export-led phase. The main objective is to attain competitive-advantage through foreign direct investment by Transnational Companies to produce manufactured goods for the international market. A total of 168 projects with total capital investment of RM 1,227 million were approved between 1981 and 1988 giving employment to 13,892 persons. By 1995, the

manufacturing sector had become the second most important contributor towards Real Gross Domestic Product at 23.7 per cent.

The manufacturing sector will continue to be one of the key sectors providing the growth impetus to the State's economy under the Eighth Malaysian Plan. The resource-based industries that will be promoted will include food processing industry, oil palm based industry, wood based industry, petrochemical industry, ceramic industry and biotechnology industry. The non-resource based industries will include the shipbuilding industry, electrical and electronic industry and some heavy industries.

2.4 The Contribution of the Manufacturing Sector to Sarawak's Gross Domestic Product (GOP)

It can be seen from the table below that the manufacturing sector's annual growth is rather unstable with the highest annual growth recorded in 1987 and high growth in the manufacturing sector for the year 2000. However, the growth of the manufacturing sector for the years 2001 and 2002 were rather low.

In contrast, the manufacturing sector's contribution to the State's gross domestic product was rather impressive increasing from 8.6 per cent in 1987 to 21.2 per cent in the year 2002. This shows that the manufacturing sector should be given proper recognition in view of its contribution to the State's Gross Domestic Product.

Table 2.1 The Manufacturing Sector's Annual Growth and Contribution to GDP

Year Annual Growth (%) Contribution to GDP (%) 1980 n.a. 6.8 1987 14.0 I 8.6 1990 n.a. 12.9 1997 10.7 i ,)

I 22.1 1998 2.0

. 22.1I I

1999 6.5 I 22.4 2000 10.5 I 22.5~-

2001e 05 (." .

21.8 2002f 1.7 21.2

Source :(www.sarawakchambers.netlscn/docllb.htm Note: e- estimate f-forecast n.a.- not available

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2.5The Contribution of the Manufacturing Sector to Employment The Manufacturing Sector plays an important role in its contribution towards providing employment for the people of Sarawak. In 1990, this sector employed 29,047 people which amounted to 3.75 per cent of the total work force. By 1996, it had doubled to 71,807 workers and contributed to 8.26 per cent of the total work force. By the year 2000, there were 76,712 workers representing 12.6 per cent of the total workforce.

Table 2 2' .. The Manufacturing Sector's Workforce ,

Year Total Workforce

No of Workers in Manufacturing Sector

% of Total Workforce

1990 775,400 29,047 3.75 1991 773,250 33,730 4.36 1992 771,100 41,431 5.37 1993 810,200 51,112 6.31 1994 819,900 59,069 7.20 1995 828,600 64,725 7.81 1996 869,500 71,807 8.26 ,

1997 864,900 73,884 8.54 1998 868,100 74,098 8,54 1999 906,900 74,312 8,19 2000 935,200 76,712 12.60

Source: AkaWl Keluaran dan PerbelanJaan Negara TahWlan: Sarawak 1987-2001 and Yearbook of Statistics: Sarawak 1996,2000

Figure 2.1: Number of Workers in the Manufacturing Sector

80,000

70,000 00,000

50,000

No of Workers 40,000

30,000

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1990 1992 1994 1996 1998 2000

Year

2.5 The Trend of the Manufacturing Sector of Sarawak

The manufacturing sector of Sarawak experienced tremendous growth. In 1994, the total value of this sector was merely RM8,754 but it grew to RM27,127 in the year 2000. This represented an increase of about 210 per cent. The industrial chemicals sub-sector grew at the fastest rate of 442 per cent from RM2,846 in 1994 to RM 15,438 in 2000. The wood based industries were in second place growing from RM2,941 in 1994 to RM4,670 in the year 2000. This represented an increase of 59 per cent. The food and beverages industry is in third place with an increase of 134 per cent rising from RM805 million to RMl,880 million in the year 2000. All the other types of industries namely, petroleum and petroleum products, electric and electronic, basic metal and metal fabrication, non­metallic products as well as other manufactured products experienced increases too for the period 1994 to 2000.

Table2.3: The Components of the Manufacturing Sector of Sarawak

Types 1994 1996 1999 2000 Food and Beverages 805 1,164 2,188 1,880 Wood-Based 2,941 3,788 4,256 4,670 Industrial Chemicals 2,846 5,165 9,798 15,438 Petroleum & Petroleum Products

1,063 1,384 1,150 1,696

Electric & Electronic 97 402 1,222 1,575 Basic Metal & Metal Fabrication

312 523 562 787

Non-Metallic Mineral Products

360 518 433 564

Other Manufactured Products

330 366 476 517

Total 8,754 13,3101 20,085 27,127 Source: www.sarawakchambers.netlscnJdocllh.htm

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