The Johor-Singapore Special Economic Zone (JS-SEZ), launched with considerable fanfare by the prime ministers of the two neighbouring nations last month, is gaining momentum as leading private enterprises step up to play rainmaker roles. On Feb 19, United Overseas Bank (UOB) launched a “green lane” with Invest Johor to fast-track investments in the JS-SEZ.
The “green lane” was one of the outcomes that stemmed from the memorandum of understanding (MOU) signed between the bank and Johor’s investment agency at the Asean conference held in Singapore in August 2024.
The “green lane” will see UOB undertake the pre-qualification assessment for the bank’s customers’ applications for Johor’s Super Lane approval. The applications will be determined by the criteria set out by Invest Johor. At the same time, UOB introduced a fast lane account opening service for its Singapore-based customers looking to expand into the JS-SEZ.
For Ng Wei Wei, CEO of UOB Malaysia, the green lane goes beyond the discussions that have taken place so far. “The green lane… allows us to put in place the right building blocks and infrastructure to accelerate investments going into the SEZ."
UOB Malaysia is the group’s largest subsidiary outside of Singapore; the bank’s contribution to the group’s topline in 2023 was around 11%.
The bank offers conventional and Islamic banking services such as transaction banking and foreign direct investment (FDI) advisory across the bank’s wholesale banking, global markets, and investment banking segments. Its retail arm includes deposit accounts, bancassurance, mortgages and wealth management services.
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“From our perspective, [the] JS-SEZ is coming up, right? We can see [that] in the amount of interest coming in… not just from Singapore-based companies, [but] also from China, North Asia, Japan [and] Korea… We are also getting interest from Europe [and the] US,“ she says.
Ng was speaking to the media on the sidelines of the Johor business mission held at Sunway Big Box on Feb 19. The business mission was organised by the Singapore Business Federation (SBF) and jointly supported by UOB, Rajah & Tann and RSM Singapore.
Ng adds that so far, UOB is the only bank assisting potential investors in expediting the investment process in the JS-SEZ. “As far as I know, we are still the first and only bank that Invest Johor signed an MOU with.
“We believe both Johor and Singapore coming together gives a lot of opportunity and we genuinely feel that we can help,” she continues.
According to Ng, the bank was so convinced of the potential of the JS-SEZ that it immediately contacted the Johor chief minister’s office when the JS-SEZ was announced last year.
The UOB team also brought the chief minister, Onn Hafiz bin Ghazi, and his team to Shenzhen to introduce them to potential investors, who eventually committed to an investment amount of some $550 million.
Just as excited about the JS-SEZ is Onn Hafiz whose team was moving “at lightning speed” to secure ease of movement as well as business and talent development as soon as they found out about the agreement being signed.
A few initiatives are already being set up. For instance, Johor has implemented QR codes for passengers travelling by bus and motorcycles, which will go live by March this year. The state has also added more auto gates and is investing heavily in technologies to ensure smoother traffic between Johor and Singapore, says Onn Hafiz in a fireside chat with Ng at the conference.
As part of a key way to improve its infrastructure, Johor is widening stretches of the highways running through the state. The link from Johor to Kuala Lumpur is being widened “as we speak”, says Onn Hafiz. About 20km of works will be done by the end of this year while the balance will be completed in 2026. The roads in Johor Bahru will also be upgraded.
“We have this vision, this great goal that we want to become a developed state by 2030,” says Onn Hafiz. “This vision has been shared [with] me by the Sultan himself and also the Regent [Ismail Idris, who is also the crown prince].”
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In its bid to transform Johor, Onn Hafiz says the Johor government is coming up with a master plan, which will be finalised in June this year. He adds that the government aims to turn Johor into a smart city and make it the most liveable city in Malaysia.
While he did not directly address Ng’s question on security, the chief minister said that the government intends to invest in artificial intelligence (AI), smart TVs, command centres and work with relevant agencies. He adds that the government intends to spend over RM60 million ($18.15 million) to upgrade Johor’s tourism facilities, such as Kampung Sungai Melayu, the botanical gardens and parks so that locals and visitors can have a good time in Johor.
“I am accountable to the four million Johoreans who live in Johor and I’m responsible [for coming] up with policies that can make their lives better, [with] more affordable housing, better education, better infrastructure; and the only way I can do this, I believe, is by working with people from all walks including our friends in Singapore,” says Onn Hafiz. “It is not a zero-sum game. The economic pie is huge; it’s really a win-win situation for all.”
Based on conversations with potential investors, which are companies that have opened accounts with UOB so far, Ng says the indicative amount these investors are looking at putting into the JS-SEZ runs up to billions of ringgit.
On whether the new Donald Trump administration will affect investment interest in the JS-SEZ, Ng believes that there is a “silver lining” in terms of trade diversification. “Trade diversification will continue as what it did in Trump 1.0. Probably, it will accelerate even more… We feel Asean is well-positioned.”
From left: Natazha Hariss, CEO of Invest Johor; Onn Hafiz bin Ghazi, Johor’s chief minister; and Ng Wei Wei, CEO of UOB Malaysia, at the launch ceremony of UOB-Invest Johor Green Lane / Photo: UOB
UOB signs first customer under ‘green lane’
UOB, on the same day, presented a letter of intent (LOI) to Hong Kong-listed battery technology and energy storage solutions provider Gold Peak Technology Group. The bank will facilitate the company’s investment in the JS-SEZ; Gold Peak, which has a Singapore-listed subsidiary GP Industries, intends to invest RM670 million ($202.4 million) in the JS-SEZ by establishing a state-of-the-art manufacturing and a research and development facility producing batteries with next-generation technologies.
Gold Peak, which has three plants in Malaysia, is also expected to play a pivotal role in advancing sustainable energy storage solutions, mainly for data centres.
With data centres becoming a mega trend, it became “very obvious” that the group needed to have a “China+1” production line. “So when the JS-SEZ plan came out, we were very encouraged by it, and that’s where we started working with global and that’s where we are today,” says Daniel Chua, senior vice-president at GP Energy Tech International. Gold Peak is the parent company of GP Energy Tech International.
He adds that the JS-SEZ presents a “very big opportunity” for the group to “scale up our production and at the same time to be able to address the global market, other than just the China market”.
With Trump’s tariffs imposed on several Chinese goods, Chua acknowledges that the “uncertainty” will “help us to alleviate some of the issues.”
Thilan Wickramasinghe of Maybank Securities calls UOB the “Asean connector”, a role that is presumably more valuable with the US-China trade war accelerating corporate shifts to Asean. “Unlike past MNC relocations, who moved with their entrenched global banking relationships, the current crop of relocators have fewer relationships. This gives UOB’s integrated Asean platform an advantage,” he adds.
