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HAJIJI's biggest breaking news on Sabah’s revamp of GLCs.

Please google these topics: 

[1] Hajiji to revamp Sabah’s GLCs.

[2] Hajiji says non-performing GLCs may be closed down.

No other CM before Hajiji has done these. He must have been encouraged by the results of his and Masidi’s initial turnaround on some Sabah GLCs which have improved quite impressively. The latest is Sedco. Against intense opposition, Hajiji appointed James Wong as GGM to transform Sedco. Lo and behold! after less than 12 months, Sedco is able to repay RM10 million of its loan from the Government and RM2 million dividends! SMJ Energy and Innoprise have made records profits. This initial revamp has produced excellent results.

Fantastic for Sabah’s future. GLCs with good governance, creditable management and financial performance can contribute great positive impacts on Sabah’s economy. Its proven.

GLCs have mushroomed and morphed into great liabilities.

[i] Harris, when he was CM, established several GLCs, most of which became significant economic contributors even to this day, like Sabah Energy Corporation and Asean Supply Base. Subsequent governments sold most of the good ones and then, formed many more GLCs, so much so that they have mushroomed to more than 260 [holding companies and subsidiaries].

[ii] Of the 260 GLCs, very few have produced successes in comparison to their peers in the respective industries while others are either underperforming, incurring losses year in year out or inactive but staffed with cost still running.

[iii] Very bad for Sabah’s economy is that some GLCs have been dominated by political warlords who treat GLCs under them as their chattels.

[iv] It is safe to summarise that most GLCs in Sabah [same or worse in Malaysia] have been badly managed, lack direction, little focus and have serious financial leakages. Sabah’s GLCs must have lost billions financially, loans from government and valuable lands in JVs. 

Most failed big projects are JVs by GLCs with companies from Malaya, some of which have doubtful financial credentials and reputations. Sabah’s GLCs, instead of being engines of growth like those in Singapore’s Temasek, become economic drags. Sabah’s GLCs are a major cause for Sabah’s poor economic performance for decades. They are one of the major causes of Sabah’s economic down grade in position from top No.2 to bottom No. 2.

How extensive are GLCs in Sabah’ economy? Sabah’s GLCs are in all major economic sectors. These GLCs have been gifted with state monopolies and highly favourable concession especially in land.

You name it, GLCs are in it. Most GLCs enjoy monopolies and/or concessions from the government. GLCs in Sabah should and can be pivotal to the state’s economy. They operate across a broad spectrum of industries, ranging from resource-based sectors like oil and gas to emerging fields like green technology and digitalization, tourism etc.

Here are the key sectors where Sabah GLCs play a major role:

[1] Energy, Oil & Gas

This is perhaps the most strategic sector for the state’s revenue and industrialism. Sabah Energy Corporation (SEC): Now the largest domestic natural gas supplier in the state. It handles downstream gas activities, pipelines, and distribution.

[i] SMJ Energy: A new powerhouse focused on increasing the state’s equity in oil and gas assets (upstream, midstream, and downstream) through partnerships with Petronas. 

[i] Sabah Oil and Gas Development Corporation (SOGDC): Manages the Sipitang Oil and Gas Industrial Park (SOGIP).

[2] Agriculture & Plantations

Sabah is a top producer of palm oil, and GLCs manage vast tracts of land to ensure the state benefits from this commodity.

[i] Sawit Kinabalu: The state’s premier investment arm in the palm oil industry, involved in cultivation, milling, and downstream processing. 

[ii] Sabah Land Development Board (SLDB): Focused on rural development and smallholder palm oil projects.

[iii] Desa Group: Well-known for its poultry and dairy operations (e.g., Desa Dairy Farm in Kundasang).

[3] Industrial Development & Logistics.

These companies focus on infrastructure and creating hubs for manufacturing and trade.

[i] Kota Kinabalu Industrial Park (KKIP) Sdn Bhd: Develops and manages the state’s primary industrial zone.

[ii] POIC Sabah Sdn Bhd: Manages the Palm Oil Industrial Cluster in Lahad Datu, specializing in port logistics and industrial land. It has the deepest wharf in this region.

[iii] Suria Capital Holdings Bhd: A listed GLC that operates the state’s major ports.

[4] Finance & Investment

These entities manage state funds and provide credit to Sabahan individuals and businesses.

[i] Sabah Development Bank (SDB): Provides project financing for infrastructure and development.

[ii] Sabah Credit Corporation (SCC): Offers personal and business loans, often leading in digitalizing financial services (e.g., Sabah Pay).11

[iii] Qhazanah: The strategic investment arm that holds equity in various commercial ventures. Qhazanah has great potential to do great things.

[5]. Tourism & Services

Tourism is a pillar of the Sabah economy, and GLCs ensure high-standard hospitality and connectivity.

[1] Sabah Air Aviation: Provides charter flights, medevac services, and support for the oil and gas industry.

[2] Innoprise Corporation (Sabah Foundation): While primarily a social foundation, it owns significant tourism assets like the Shangri-La Tanjung Aru and various nature conservation areas.

[6] Mining.

SMM [Sabah Mineral Management] has been tasked to oversee Sabah’s mining operations. 

There is absolutely no excuse for these GLCs or their subsidiaries to lose money.

Hajiji’s revamp can up-scale GLCs’ economic contributions to Sabah’s economy very substantially.

The initial GLC revamp in 2024/2025 by Hajiji and Masidi has borne encouraging results with substantial performance improvement. A comprehensive and thorough revamp by Hajiji and Masidi in 2026 will have the greatest economic impacts of Sabah’s future in the following manners:

[1] Foremost, this revamp will stop if not, at least, reduce financial bleedings substantially by GLCs. This, in itself, will give tremendous saving for the government.

[2] Given that the Sabah Government have granted all GLCs with monopolistic rights and favourable concessions, these GLCs, with proper governance and management, will generate substantially more profits than now. Following examples our GLCs should bench marks on:

[i] KPJ Specialist Hospitals [Johor SEDCO]

Total Revenue [2024]-RM 3.92 billion. Net Profit RM407.2 million.

KPJ is operating competitively with no monopolistic rights.

[ii] IOI Corporation Bhd

Total Revenue [2024] RM 9.60 billion. Net Profit: RM 1.11 billion.

IOI’s major plantation operation is in Sabah. It has about 260,000 acres.

[ii] With proper governances, creditable chairmen, directors and senior management, Sabah’s GLCs should be able to produce quite easily RM1 billion or more profit. This is only equivalent to a single company: IOI Bhd 

[3] Hajiji’s revamped GLC will create tremendous contributions towards enlarging Sabah’s GDP.

Hajiji has already improved Sabah’s GDP to RM84.3 billions in 2024 which is the highest historically.

With Hajiji’s revamp on all the major GLCs, it is highly possible that Sabah’s GDP can increase to more than RM100 billion because of the multiplier effects that these GLCs can generate. This is equivalent to about 20% of 2024 GDP.

This is how important Hajiji’s revamp of the GLCs can be.

[4] Hajiji’s revamped GLCs will minimize or eliminate need to JV with non-Sabahans. 2 benefits never seen before in Sabah:

[i] JVs with Malayan companies have seen too many failed projects. Strong financially and well manged GLCs can seek finance and undertake the projects.

[ii] No more profits from projects being siphoned off to Malaya. They stay in Sabah!

Hajiji’s revamped GLCs can work with Sabahan private sector. This will be the “dream come true” for Hajiji’s policy of “Rumah Kita, Kita Jaga”. 

[i] Sabah’s GLCs will need not look for or look up to companies from Malaya to be partners. They can partner with Sabahan companies and if they are not strong enough, they can form consortium.

[ii] Such partnership can build up the capacity of Sabahan companies. 

Hajiji’s revamped GLCs can undertake JV with large foreign investors.

Hajiji has already attracted RM58 billion. When he has revamped the GLCs, they can JV with new investors. Like Singaporean GLCs, foreign investors look for them to be partners.

Equally important is for them to expand Sabah’s economy in undertaking value add downstream. 

Hajiji’s revamped GLCs will produce a new class of proficient Sabahan professional managements.

[i] This is probably the most important benefit of Hajiji’s revamping the GLCs. The Sabah’s GLC management have been looked at with little respect because of their poor performance and too many shady deals.

[ii] This will change. A new class of highly proficient, professional and respectable managers will rise and take Sabah forward like those in Singapore. 

Hajiji’s revamped GLCs can under development projects from Sabah and Federal Governments. 

[i] Yes! You got it right. No need for non-Sabahan contractors from Malaya. Hajiji’s revamped GLCs can undertake these projects on their own or JV with Sabahan contractors.

Is Hajiji’s revamping the GLCs tough?

Yes. It is tough. Very tough. No CM before him has attempted this feat. Same toughness as regaining the 40% and all the other rights from KL. 

Sabahans have voted overwhelmingly in the 2025 election that Sabahans want to exert our rights, to charge of our state. On this, Sabahans have sent a clear signal. We must take charge of our destiny. 

Revamping Sabah’s GLCs will be a test case that we can take charge of our own affairs. Hajiji’s GLC revamp is not political. It is for our economic future. So, I hope all pollical leaders can support this GLC revamp. 

The views expressed here are the views of the writer and do not necessarily reflect those of the Daily Express. If you have something to share, write to us at: Forum@dailyexpress.com.my