A Malaysian construction firm Southrise, which has operations in Senai, Johor, has similarly seen a 15 to 20 per cent increase in tenders commissioned to it since January. Its administrative manager Cassie Tiong attributed the rise to the increased interest in the special economic zone.
Banks have also taken steps to promote the project and have indicated their willingness to lend to smaller firms within the zone.
United Overseas Bank in February launched a Green Lane with Invest Johor to fast-track investments into the zone.
Three months later, Maybank announced that it had partnered with ASME to facilitate Singapore-based SME financing and access to the zone as well. The Malaysian bank also facilitated S$709.6 million (US$545 million) in client investments to the economic zone last week – from Thomson Medical Group, Centurion Corporation, as well as Alpine Renewables and Edible Oils.
Though the zone is still very much in its infancy, larger firms that have taken the leap to expand into Johor have also benefited from being part of it at the moment.
Singapore-based agricultural-technology firm Archisen recently completed its development of a 52,000 sq ft smart indoor vertical farm located in Iskandar Puteri, a joint venture with Malaysia’s state-owned agri-food company FarmByte.
Archisen’s chief executive officer Vincent Wei said his firm, which offers an end-to-end solution to design, build and operate urban farms, has seen an uptick in interest from collaborators and clients who are keen to work with the company in the economic zone.
Mr Wei said that Johor has, for many years, been known for having lower costs of production.
“What was lacking is the security and the know-how of getting business approvals and permits,” he added.
“Furthermore, there will also be a series of tax incentives, which are in the process of being implemented – so that further attracts companies’ interests.”
Data centres aplenty have also entered Johor in recent years.
Princeton Digital Group, a Singapore-based internet infrastructure firm, officially launched its data centre campus in Sedenak Tech Park in July last year.
Its chief technology officer Asher Ling said although it was still too early to provide an update on the benefits to his company from being a part of the zone, it is optimistic of the potential to deliver long-term advances to the industry, particularly in terms of regulatory efficiency, improved cross-border connectivity and access to skilled talent.
In essence, while the benefits of Johor’s comparatively lower costs for labour and land are not new, the formalisation of the economic zone signals a new level of political will that attracts investment from both regional and global players, businesses said.
Mr Marcus Sia, managing director of advanced manufacturing firm Applied Total Control Treatment, said that Singapore’s appeal as a hub by itself is no longer what it used to be, owing to its reputation as an expensive city.
However, the symbiotic nature of the JS-SEZ acts as a counter to that reputation.
“Whatever we can offer, many other countries can also offer today … In business, people want choices, so you need to know how to position yourself,” he said.
Since 2017, Mr Sia’s firm has had operations in the Senai town of Johor, now a part of the zone.
Owing to the appeal of the zone, his company, which primarily focuses on manufacturing for the aerospace and semiconductor industries, now sees positive interest from “seven out of 10” clients that they approach, Mr Sia said.
HURDLES AND LINGERING DOUBTS
Despite the early gains for some businesses, trade associations from both countries agreed that there is still much to be done.
Industry players in Singapore told CNA in January that they were concerned about several issues, including a lack of skilled labour in Johor and congestion along the Causeway – and some of these concerns remain.
