By Datuk Ts Dr. Hj Ramli Amir, former President of the Chartered Institute of Logistics and Transport (CILT) Malaysia and Vice-President of CILT International for Southeast Asia
KOTA KINABALU: The formation of the Sabah Unity Government has introduced a transformative governance structure with the appointment of Datuk Ewon Benedick as Deputy Chief Minister III and Minister of Industry, Entrepreneurship and Transport.
This consolidation represents what the Chartered Institute of Logistics and Transport Malaysia (CILTM) Sabah Section, led by Chairman Ts Daniel Doughty, has termed a “strategic inflexion point” for the state.
By clustering three previously distinct but deeply interdependent portfolios—Industry, Entrepreneurship, and Transportation—Sabah has moved away from fragmented governance toward a unified ecosystem capable of accelerating economic development.
This narrative explores how this new ministry serves as the engine of Sabah’s economic modernization, leveraging the synergy between industrial growth, grassroots entrepreneurship, and the logistics infrastructure required to connect them to the world.
The Strategic Logic of Integration
The decision to house industry, entrepreneurship, and transportation under a single ministry addresses a longstanding structural inefficiency.
Historically, transport planning in Sabah has often been reactive—addressing congestion or freight bottlenecks only after they impede growth—rather than proactive.
By integrating these sectors, the state acknowledges that logistics and transportation form the circulatory system of the economy, essential for sustaining industrial zones and empowering entrepreneurs.
This “cluster” approach allows for synchronized planning. Industrial parks can now be developed in tandem with the requisite road and port connectivity, ensuring that manufacturing hubs do not face logistical strangulation.
Similarly, entrepreneurs, particularly those in rural areas, can be better integrated into the state’s supply chains through improved transport networks.
The endorsement of this structure by professional bodies like CILTM underscores its potential to professionalism the sector, linking policy directly with industry realities.
Pillar I: Industrial Development as the Growth Engine
Sabah’s industrial sector is currently experiencing a robust upward trajectory, driven by strategic investments and a shift toward downstream processing.
In 2023, the manufacturing sector contributed RM6.03 billion to the state’s GDP, marking a 7.3% increase and positioning Sabah as a leader in manufacturing growth nationwide.
This momentum has accelerated further into 2025, with the state attracting RM11.37 billion in approved investments across primary, manufacturing, and service sectors, creating thousands of high-value jobs.
The ministry’s role is to steward this growth through key assets like the Kota Kinabalu Industrial Park (KKIP) and the Palm Oil Industrial Cluster (POIC) Lahad Datu. These are not merely zones for factories, but specialized hubs designed for global competitiveness.
POIC Lahad Datu, for instance, has achieved HALMAS status as a premier halal-certified park, focusing on high-value downstream activities such as oleochemicals and biofuels.
Within this industrial framework, the Sabah Oil and Gas Industrial Park (SOGIP) in Sipitang serves as the critical anchor for the state’s heavy industry and downstream energy strategy. Unlike general manufacturing zones, SOGIP is purpose-built to monetize Sabah’s natural gas reserves domestically, shifting the economic model from raw export to high-value processing.
By hosting integrated petrochemical complexes—including ammonia and urea production facilities and upcoming floating LNG initiatives—SOGIP drives the ministry’s objective to capture higher value across the supply chain. Its strategic location and specific infrastructure needs exemplify why the new ministry’s cluster is vital: SOGIP’s success depends entirely on synchronized industrial policy and specialized port logistics to ensure Sabah’s energy products remain competitive in the global market.
Under the New Industrial Master Plan 2030 (NIMP 2030), the ministry is tasked with diversifying this base further.
The development of new industrial parks in Kimanis and the Kota Marudu-Kota Belud corridor reflects a strategy to decentralize economic benefits, ensuring that industrialization is not confined to the west coast but spreads opportunities throughout the state.
Pillar II: Entrepreneurship and the “Sabah First” Agenda
Central to Minister Ewon Benedick’s vision is the “Sabah First” agenda—a commitment to building an economy where Sabahans are active participants rather than passive observers. The ministry views Micro, Small, and Medium Enterprises (MSMEs) not just as businesses, but as the backbone of the state’s socioeconomic stability.
To realize this, the ministry is fostering an “investor-friendly and entrepreneur-friendly” ecosystem. This involves moving beyond basic grants to comprehensive capacity building. A historic milestone was reached in May 2025 with the launch of the first MSME Hub in East Malaysia.
Located in Penampang, this hub serves as a centralized resource centre offering training, financing guidance, and market access support, effectively bridging the gap between informal micro-trading and competitive SME operations.
Federal collaboration amplifies these efforts. With substantial allocations from the Ministry of Entrepreneur Development and Cooperatives (KUSKOP)—over RM813 million for Sabah’s SMEs in 2024—the state ministry acts as a crucial coordinator, ensuring these funds reach the right target groups. Programs like the GrowBiz initiative and Ehsan@KUSKOP are specifically tailored to uplift rural entrepreneurs, integrating them into the broader economy. The minister’s pledge to dedicate weekly sessions to stakeholder engagement further signals a hands-on approach to removing bureaucratic hurdles for local business owners.
Pillar III: Transportation as the Critical Enabler
The third pillar, transportation, is the catalyst that activates the potential of the first two. Without efficient logistics, industrial goods cannot reach markets, and rural entrepreneurs remain isolated. The new ministry creates a unique opportunity to finally develop a comprehensive Sabah Transport Masterplan—a unified blueprint that coordinates road, sea, and air networks with economic priorities.
Three major infrastructure projects define this era of connectivity:
The Pan Borneo Highway: As the spine of Sabah’s land transport, this 706km project (Phase 1) is nearing completion. It promises to revolutionize domestic logistics by linking major population centres and industrial zones with a continuous, high-quality corridor. This will drastically reduce travel times and logistics costs, effectively shrinking the distance between producers in the interior and ports on the coast.
Sapangar Bay Container Port (SBCP) Expansion: The partnership between Sabah Ports and global logistics giant DP World is a game-changer. The expansion aims to more than double the port’s capacity to 1.25 million TEUs. By leveraging DP World’s global network, SBCP is transitioning from a feeder port to a premier regional transshipment hub.
The recent introduction of direct shipping routes to China exemplifies this shift, bypassing traditional detours and lowering freight costs for Sabah’s manufacturers.
Air Connectivity: Tourism and high-value cargo rely on air links. The state has aggressively pursued new routes, aiming for five million arrivals in 2025. Strategic partnerships with airlines are opening direct connections to key markets in North Asia and ASEAN, supporting both the tourism service industry and the rapid movement of perishable goods.
Regional Integration: The BIMP-EAGA Gateway
Sabah’s economic narrative is incomplete without its regional context. Geographically positioned at the heart of the Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA), Sabah is the natural logistical gateway for a market of 80 million consumers.
The ministry’s integrated structure allows Sabah to fully exploit this advantage. POIC Lahad Datu is strategically located along the Lombok-Makassar shipping straits, offering a viable alternative to the congested Straits of Malacca for regional trade consolidation. By aligning industrial output with port capacity and trade agreements, the ministry can position Sabah as the “Rotterdam of the East”—a central hub for aggregating resources from across Borneo and the Southern Philippines for global export. This vision transforms Sabah from a peripheral state into a core node of ASEAN trade.
Conclusion: A Blueprint for Prosperity
The creation of the Ministry of Industry, Entrepreneurship and Transport is more than an administrative reshuffle; it is a strategic realignment of Sabah’s economic machinery. By placing the engines of production (industry and entrepreneurship) under the same roof as the mechanisms of movement (transportation), the state government has created a framework for rapid, synchronized decision-making.
With Sabah’s GDP reaching a historic high of RM84.30 billion and investment inflows surging, the fundamentals are in place. The challenge now lies in execution.
The ministry’s mandate is clear: to construct a “Sabah First” economy that is industrialized, interconnected, and inclusive. Through the successful delivery of critical infrastructure like the Pan Borneo Highway and the Sapangar Bay expansion, combined with unwavering support for local entrepreneurs, this new ministry is poised to drive Sabah into a golden era of sustainable development. As stakeholders have noted, the planning phase is over; the real work of transformation has begun.
With that said, perhaps it is timely for Sabah to have its very first Total Transport Masterplan.
