Labuan needs to become multi-user logistics support base

Harris (right) talking with a conference delegate, Johari Abidin (left) during the New Dimension in Logistic; Shaping and Achieving Optimization at the Asian Business Conference 2016 Dorsett Grand Hotel Labuan recently. — Bernama photo

November 25, 2016, Friday, LABUAN: Labuan needs to change from being an oil and gas (O&G) dependable to a multi-user logistics support base.

Asian Supply Base Sdn Bhd (ASB) Chief Executive Officer Dato' Hj Harris Hj Annuar Tan said the changing economic climate in Labuan warrants industry players to seek change and diversification, new policies and incentives.

“Variables to be discussed include port sector trends, information technology, transport model integration, quality management, state regulations and such,” he said in a presentation at the recent Asian Business Conference (ABC) 2016 here.

Asian Supply Base is the Sabah state government’s investment arm and known as a One-Stop Logistics Hub for Labuan’s Oil and Gas industry.

Harris said it was important for a change in mindset of industry players  to be more global thinking and able to explore new potentials.

“We should go for innovative changes and equip ourselves with a strategic approach,” he added.

He also stressed the need for policy, government support and governance, cost visibility, bench-marking, innovation and a dedicated team be in place.

“Labuan has been a vital trading post, a military base and a duty free port from the time the British took over 170 years ago.

“It is in a strategic position, an all-weather port and minerals found within its shore and offshore, has elevated its role into an important port of call and distribution centre for the region.

“Much has changed geopolitically and economically and today, the oil and gas sector has thrived and is still, even at this challenging time, a key driver of the local economy.

“However, globalisation, geopolitical and economic factors, technology and competition, among others, requires an injection of new ideas, managerial expertise and astute leadership to sustain growth and overcome challenges,” he added.

Harris said given the many advantages Labuan is blessed with, it is vital for those in power and key players in the industry, to ensure the island grows into an integrated distribution and trading hub in the region.

He noted that Labuan is potentially a vibrant economic destination in being strategically located within the Brunei, Indonesia, Malaysia and the Philippines – East Asean Growth Area (BIMP-EAGA), while supported by industrial facilities, investment and business incentives as well as financial services.

“All these factors will eventually make Labuan a strategic platform connecting the Asia Pacific.

“It is the ideal location for access to many markets within the Asia Pacific region with a well-regulated income tax regime, advantage of a benign income tax regime, and being a  duty-free and bonded island.

“It also has a strong economy, offering low operating costs to industry players, the ship registry matter is under the Labuan Financial Services Authority (LabuanFSA), while the available offshore funds will help Labuan become an attractive investment destination,” Harris said.

He outlined several key factors to achieving optimisation (Labuan’s economic development).

It includes a technology approach by developing a deep understanding associated with multiple logistics partners, products and technology tools, combining industry specific analytics frameworks, using the right technology tools and logistics processes engineered for effectiveness and greater efficiency.

“To develop the future of Labuan, we must continue to encourage trading activities, boost up economic activities, while creating initiatives to improve and upgrade existing facilities.

“We must able to provide logistics assistance for traders as a one-stop logistics hub, provide value added services, including upgrading existing facilities such as airport, ferry terminals and hospitals.

“We must continue to promote partnerships and build networks. As a centre, Labuan should build partnerships and execute public-private partnership development that creates backward-forward linkages and markets to grow in Labuan,” said Harris, who is also a director of the Sipitang Oil and Gas Industrial Park (SOGIP). — Bernama