Sarawak reboots industrial parks for green‑future clusters

Sarawak is revamping its master plan for industrial parks to concentrate on next-generation industry clusters that focus on low-carbon technologies. The state aims to achieve this by grouping industries such as renewable energy, manufacturing, and information and communication technology services.

This new approach will ensure that carbon reduction targets, renewable energy infrastructure, and green certification standards are factored into the design of each park to ensure that development is competitive and sustainable. It is believed that this new approach will attract high-value investments, create skilled employment, and make Sarawak a model for sustainable industrial development in the region.

Incubators for ‘future‑oriented’ sectors

The move is to re‑engineer the state’s network of industrial parks so that they become incubators for ‘future‑oriented’ sectors while anchoring a transition to a low‑carbon economy. The Premier points out that the traditional resource‑driven model—anchored on timber, oil and gas—can no longer sustain Sarawak’s ambition to become a ‘green, digital, and resilient’ hub in the broader Borneo region. The industrial parks are to evolve from spaces that merely host factories to ecosystems that nurture innovation, clean‑technology, and high‑value talent.

The roadmap for the redevelopment of the new industrial parks is based on three pillars. First, it seeks to develop the next generation industries that will determine the future of the economy of the region. Second, it seeks to develop low carbon infrastructure, which will ensure that the infrastructure, energy, and transport sectors are highly sustainable. Finally, the roadmap includes the people pillar, which will ensure that the region has a highly skilled workforce, a thriving community, and facilitates collaboration among the stakeholders.

Implementation will be overseen by a newly formed Sarawak Industrial‑Park Transformation Unit (SIPTU), which will coordinate land‑use planning, environmental impact assessments, and investor outreach. Early adopters like the Malaysia‑Japan Joint Venture on hydrogen‑fuel cells have already signalled interest, citing Sarawak’s abundant hydro‑resource base and its strategic position along the “Blue Pacific” maritime corridor.

Response to global supply chains

Analysts view the move as a pragmatic response to shifting global supply chains and tightening carbon regulations. If Sarawak can lock in green‑tech investments now, it will not only diversify its export basket but also future‑proof its economy against the inevitable decline of fossil‑fuel revenues.

In light of this, the Premier is urging both private investors and community stakeholders to join the ‘great transformation’ that will see Sarawak’s industrial parks become beacons of sustainable growth for the next generation.

The Sarawak industrial parks are on the verge of a growth spurt as the state is making efforts to ensure that its economy is not dependent on timber and oil and gas. In 2025, the Sarawak Corridor of Renewable Energy (SCORE) alone had more than 120 operational projects, which collectively attracted an investment of RM 8.7 billion and generated more than 35,000 jobs.

Magnet for high-value industries

The industrial parks are now a magnet for high-value industries such as electronics, agro-processing, renewable energy equipment manufacturing, and data center services due to the availability of tax incentives, 230kV power from the state’s hydro-electric power grid, and an emerging logistics support infrastructure.

The Sarawak industrial parks have become an integral part of the state’s diversification efforts, accounting for about 15 % of the Gross State Domestic Product and attracting over RM 10 billion of cumulative private investment since 2015.

The Samalaju Industrial Park, which is the country’s first fully-fledged petro-chemical industrial park, is currently operating at 85 % capacity, while other new industrial parks like the Bintulu Integrated Industrial Park (BIIP) and the Mangku Digital & Green Technology Park have already attracted anchor tenants in the renewable energy, electronics manufacturing, and agritech industries.

The industrial parks have created more than 25 000 direct jobs and have also created a multiplier effect in the logistics, services, and community development sectors. They are also very important to the state’s ambition of becoming a manufacturing centre in Southeast Asia, but they are faced with a number of challenges that are interconnected.

Challenges

First, the geographical size of the region presents logistics problems. Most of the industrial parks are situated very far from the deep-water ports, and the existing transportation infrastructure is not adequate for the heavy traffic generated by the petrochemical, wood processing, and electronics industries.

Second, the absence of skilled manpower presents a challenge to productivity. The local human resource is still in the process of shifting from the conventional agriculture and resource extraction sectors to the more lucrative manufacturing sector, resulting in a gap in engineering, quality control, and IT skills.

Third, the stringent environmental standards, particularly those concerning the protection of Sarawak’s rainforests and riverine ecosystems, present additional costs to the developers, apart from heightening local community concerns about pollution and land use. Finally, the competition from the more developed industrial estates in Peninsular Malaysia and Indonesia presents pressure on the industrial parks in Sarawak to be more competitive and to achieve projects faster.

The government of Sarawak and the private sector have adopted a comprehensive approach to overcome logistics, talent, and regulatory issues in industrial parks. The most significant initiatives include accelerated infrastructure projects such as the extension of the Pan-Borneo Highway, which has improved transit times and costs. To overcome talent issues, collaborative training initiatives with universities and companies have been adopted to emphasize advanced manufacturing and green technology.

‘Green park’ standards a competitive tool

The Sarawak Digital Economy Strategy has adopted IoT and smart logistics, which improve efficiency and minimize carbon emissions. The environmental regulations are being used as a competitive tool with ‘green park’ standards, which promote environmentally responsible branding for companies. Fiscal policies such as tax holidays and simplified procedures have been adopted to encourage investment while benefiting society.

Taken collectively, these efforts are slowly working in tandem with each other to remove logistical hurdles, improve the capabilities of human capital, and make processes easier, all of which is putting Sarawak's industrial parks in a better position to compete regionally.