31 Tawau

“And there he lets the hungry dwell, and they establish a city to live in;”

Psalm 107:36 (ESV)

Tawau is fast becoming a small Japanese colony. Two miles by road from Tawau is the Kuhara Company’s Estate which, besides/ having the largest area of planted rubber in the country, has also a large experimental garden in which is planted almost every product of the tropics, and to the east of the town is the Kubota Coconut Estate.

Owen Rutter, British North Borneo, 1922.

Tawau City

1.0 Physical Geography

Location:

Tawau, the third-largest town in Sabah, encompasses a city area of 55.9 km² and a vast municipality area spanning 6,125 km².

Population:

As of 2020, Tawau was home to a population of 372,615 residents.

Orientation:

Situated on the east coast, Tawau faces the Celebes Sea. It lies to the west of the Wallace Line and shares a border with North Kalimantan. Distances to key Sabah cities include:

• Kota Kinabalu: 278 km
• Lahad Datuk: 99 km
• Kudak: 314 km
• Sandakan: 181 km

Climate:

Positioned at 4.2° north of the equator, Tawau experiences a tropical climate with an annual rainfall ranging between 1,800–2,500 mm. The average temperature stands at 26.6°C. Notably, the region boasts rich volcanic topsoil conducive to diverse crop cultivation and is endowed with abundant natural resources, including coal and gold mines.

Additional Insights into Tawau:

1. Crop Succession:
   • Tawau’s agricultural history is marked by a succession of crops influenced by global market dynamics.
   • Tobacco was initially cultivated for its lucrative price until the introduction of the McKinley tariff in 1892.
   • Manila hemp became a focus for ship ropes, followed by copra plantations for coconut oil extraction.
   • The Korean War sparked a rubber boom, and timber exports to Japan surged in the 1960s.
   • Cocoa gained prominence in the 1970s due to high prices, leading to Tawau being a major producer.
   • The opening of China in the 1990s resulted in an increase in oil palm plantations.
2. Cyclical Challenges:
   • The agricultural landscape witnessed a 10–20 years cycle of boom and bust for various crops.
3. Japanese Influx:
   • During the 1930s, Tawau experienced a significant influx of Japanese migrants working in agriculture.
   • By the Second World War, 1,175 Japanese were residing in Tawau.
4. Cocoa Dominance:
   • In the late 1980s, Malaysia ranked as the 4th largest cocoa plantation globally, with Tawau as a major producing area.
   • Cocoa production peaked in 1976, generating substantial revenue.
5. Population Growth:
   • In 1931, Tawau’s population stood at 1,800 people.
   • By 2020, the population had grown substantially to about 600,000, driven by an influx of plantation workers from Indonesia.

Unique Attributes:

• Volcanic Soil Diversity: The fertile volcanic soil supports a diverse range of agricultural crops.
• Palm Oil Hub: Tawau serves as a hub for palm oil production, benefiting from abundant sunshine and rainwater.
• Strategic Location: Its proximity and access to the Celebes Sea and the Pacific Ocean contribute to Tawau’s economic and geographical significance.

2.0 History

Period	Ruler
15th century–1658	Brunei rule
1658–1882	Sultanate of Sulu
1750	Sultanate of Bulungan
1898	British North Borneo
1963	Federation of Malaysia
Previous names	Tawao

Unique Attributes of Tawau:

1. Former British Crown Colony:
   • Tawau holds the distinction of being a former British Crown Colony, signifying a historical connection to British colonial rule.
   • The legacy includes well-established town planning, showcasing organized urban development.
   • Government administration reflects a structured and enduring system.
   • The adoption of a common law legal system underscores a legal framework rooted in British jurisprudence.

2. Japanese Industrial Investments:
   • Since the 1910s, Tawau has been a recipient of Japanese industrial investments, particularly in agriculture and fishery sectors.
   • Japanese industry’s involvement highlights a long-standing economic partnership, contributing to the region’s growth and development.

Tawau residents with Chief Puado and Alexander Dunlop, first British Resident of Tawau 1885

3.0 Economy

3.1 Agriculture:

Tobacco

Tobacco played a pivotal role in shaping the early economy of North Borneo, particularly in the region of Tawau. The high quality of Borneo tobacco, especially as a wrapper leaf for cigars, propelled it into a leading position in the state’s agricultural exports.

• Historical Significance:
  • Initiation of Economy: Tobacco was the inaugural successful crop that laid the foundation for North Borneo’s agricultural economy.
  • Export Dominance: In 1890, tobacco exports constituted around 30% of the state’s total exports, with a subsequent increase to 50% in 1891 and further to 60% from 1892 onward.
• Key Companies:
  • Ownership Structure: Dutch and German companies held substantial ownership of tobacco estates, alongside British planters.
  • Prominent Companies: Notable companies involved in tobacco cultivation included Rotterdam Borneo Company, German Borneo Company, Marudu Bay Tobacco Company, Borneo Tobacco Company, London Borneo Tobacco Company, B.T.M. Samarang, Labuk Planting Company, China Borneo Company, Sandakan Tobacco Company, and the New Darvel Bay Tobacco Plantation.
• Impact of McKinley Tariff:
  • Introduction: In 1892, the United States implemented the McKinley tariff to shield its domestic tobacco industry.
  • Consequence: This tariff had a profound effect on North Borneo tobacco, leading to a substantial decline in demand, especially from the chief importer, the United States.
• Post-World War II Production:
  • Darvel Bay Tobacco Company: In 1955, the Darvel Bay Tobacco Company in Lahad Datu achieved notable success by producing 330,057 lb. of high-quality wrapper leaf, valued at $3.2 million in Malaya and British Borneo dollars.

The trajectory of the tobacco industry in Tawau reflects the region’s adaptability to global economic changes and highlights its historical significance in the broader context of North Borneo’s agricultural development.

Manila Hemp

Manila Hemp Production in Tawau

Manila hemp, a vital material for rope production in the marine industry, became a significant economic contributor to North Borneo, particularly in Tawau. The historical development of Manila hemp plantations in the region showcases the diverse agricultural landscape and adaptive economic strategies.

• Japanese Investment:
  • Initiation in 1915: In 1915, a Japanese company acquired a tobacco plantation in the Abaca area and diversified its crops to include rubber and Manila hemp.
  • Expansion by 1940: The Japanese investment in Manila hemp plantations grew substantially, covering an expansive area of 3,819 acres in Tawau.
• Unique Production Status:
  • Sole Producer in British Empire: Tawau held a distinctive position as the exclusive producer of Manila hemp within the entire British Empire.
  • Economic Contribution: Manila hemp emerged as one of the major economic contributors to the North Borneo region, underlining its significance in the local economy.

Diversification and Dominance in Tawau’s Agricultural Landscape

The transition from tobacco to a diversified agricultural portfolio, including rubber and Manila hemp, reflects Tawau’s astute response to evolving global demands. The impact of Japanese investment and subsequent developments in rubber and coconut plantations played a pivotal role in shaping Tawau’s economic landscape.

Rise of Rubber and Coconut Plantations:

• Demand Surge: The late 19th century witnessed a surge in demand for rubber due to the rise of the bicycle, automobile, and electricity, positioning rubber as a crucial component for various industrial applications.
• Japanese Initiatives: In 1907, the cultivation of rubber seeds in a tobacco nursery marked the inception of rubber plantations. By 1924, significant Japanese investments materialized into a large rubber plantation covering the Tiger-Table, Imam, and Merotai areas, totalling 12,500 acres.
• Tawau Kuhara Estate:
  • Japanese Contribution: The establishment of Tawau Kuhara Estate by the Japanese, particularly under Kubota Umeme, solidified Tawau’s position as a major player in rubber production.
  • Government Optimism: In 1916, the government expressed optimism, hailing the Japanese rubber estate as the nucleus of one of the State of North Borneo’s largest agricultural enterprises.
• Diversification into Manila Hemp and Oil Palm:
  • Strategic Experimentation: Post World War II, the Kuhara Estate diversified its portfolio by branching into Manila hemp planting and experimenting with oil palm.
  • Dominance of Rubber: Despite diversification efforts, rubber retained its dominance, sustaining Tawau’s economic significance during the war years.
• Post-War Transition:
  • Colonial Development Corporation: After the war, the Kuhara Estate transitioned to new ownership under the Colonial Development Corporation, operating as Borneo Abaca Limited.

Timber: Tawau’s Logging Legacy

Tawau’s historical journey in the timber industry is a testament to the region’s pivotal role in North Borneo’s economic tapestry, marked by triumphs, challenges, and eventual decline.

• Early Export and Monopolies:
  • China Export in 1884: The timber industry’s roots in Tawau trace back to 1884 when timber was exported to China, setting the stage for a significant economic sector.
  • British Borneo Timber Company: By 1920, the industry witnessed a shift, with the British Borneo Timber Company, under the control of Harrison and Crossfield, holding a monopoly on timber production in the Colony.
• Bombay Burmah Trading Corporation’s Entry:
  • Global Expansion: The Wallace Brothers of Scotland established the Bombay Burmah Trading Corporation Limited in 1863. The company extended its reach to North Borneo in 1940 after operations in various regions.
  • Post-War Developments: Post-World War II, North Borneo Timbers, a subsidiary of BBTCL, secured substantial timber concessions in Wallace Bay, Tawau, amplifying the region’s role in the timber trade.
• Peak Production and Decline:
  • 1956 Triumph: In 1956, North Borneo exported a substantial 2.6 million cubic feet of timber, showcasing a flourishing period for the industry.
  • 1978 Peak: The late 1970s marked the zenith of timber production, reaching an impressive 13 million cubic meters.
  • Shifts in Extraction Volumes: Throughout the 1980s, extraction volumes ranged from 10 to 12 million cubic meters annually. However, the 1990s witnessed a decline, with volumes dropping to 3.4 million cubic meters by 1999.
  • Fluctuations in the 2000s: The 2000s showcased a mix of ups and downs, with timber production averaging 5 million cubic meters. However, the subsequent two decades witnessed a notable decrease, stabilizing around 0.5 million cubic meters.

Cocoa: Tawau’s Sweet Rise and Bitter Challenges

The cocoa industry in Tawau embarked on a journey from prosperity to adversity, mirroring the region’s ability to thrive and endure in the face of economic complexities.

• Pioneering Efforts:
  • 1956 Cocoa Research Station: The establishment of the cocoa research station at Quoin Hill in 1956 marked a pivotal moment, laying the foundation for Tawau’s venture into cocoa cultivation.
  • Borneo Abaca’s Initiative: In the 1950s, Borneo Abaca took a plunge into cocoa planting, diversifying the agricultural landscape of Tawau.
• Pinnacle of Success:
  • 1976 Expansion: By 1976, cocoa plantations flourished, covering an expansive 9,800 hectares of Tawau’s fertile soil.
  • Economic High: The beans’ market value surged to an impressive US$4,800 per metric ton, propelling cocoa into a lucrative cash crop.
• 1989: The Zenith of Cocoa Production:
  • Sabah’s Dominance: In 1989, Sabah emerged as a cocoa powerhouse, boasting 205,000 hectares and yielding a staggering 145,000 metric tons of dried cocoa beans.
  • Tawau’s Crown: Tawau, in particular, claimed the title of Malaysia’s largest cocoa producer, a testament to its agricultural prowess.
• Downfall and Challenges:
  • Cocoa Pod Borer Invasion: The 1990s marked a somber chapter as severe infestations of the Cocoa Pod Borer wreaked havoc on cocoa plantations.
  • Low Prices and Labour Shortage: Challenges compounded with low market prices, labour shortages, and the rise of competitive crops like oil palm.
• 2011: A Fraction of Former Glory:
  • Dramatic Decline: By 2011, the once-thriving cocoa plantations dwindled to a mere 6,900 hectares in Sabah, underscoring the industry’s struggles.

Oil Palm: Tawau’s Agro-Giant

In the realm of Tawau’s agricultural evolution, the oil palm stands tall as the reigning monarch, weaving a narrative of growth, economic centrality, and, at times, contentious debates.

• 1959: Inaugural Planting at Borneo Abaca Estate:
  • Pioneering Days: The oil palm’s journey in Tawau commenced in 1959 with the maiden plantation at Borneo Abaca Estate, marking the dawn of a new era in the region’s agriculture.
  • Mid-1960s Mill Milestone: The mid-1960s witnessed the commissioning of the first crude palm oil (CPO) mill, underscoring Tawau’s commitment to cultivating and processing palm oil.
• 1982: The Orchards Expand:
  • Significant Growth: By 1982, the oil palm empire covered approximately 16,000 hectares, a testament to the sector’s exponential expansion within a relatively short span.
• Present Day: A Verdant Sea of Oil Palm:
  • Economic Backbone: Oil palm has emerged as the primary financial backbone for Tawau’s agricultural sector, steering economic activities and contributing significantly to the region’s revenue.
  • Vast Plantations: In the grand tapestry of Tawau’s landscape, a sprawling expanse of approximately 1 million hectares in the Tawau Division stands adorned with oil palm plantations. This colossal presence extends its reach across Tawau, Lahad Datu, Kinabatangan, Kalabakan, Semporna, and Kunak regions, outlining the agro-dominance of the oil palm.

3.2 Mining: Tawau’s Subterranean Bounty

In the labyrinthine depths beneath Tawau’s surface, a saga of coal and gold unfolds, narrating the region’s tryst with the hidden treasures that lie beneath.

• Coal Chronicles: Silimpopon Coal Mine (1905-1937)
  • The Grandeur: The Silimpopon Coal Mine, a colossal subterranean expanse, earned the prestigious title of the world’s largest coal mine during its operational zenith from 1905 to 1937.
  • Operational Peak (1922): In 1922, the mine reached its zenith, producing a staggering 87,543 tons of coal. This monumental output testified to the region’s coal-rich subsoil.
  • Curtain Falls (1930): The coal mine’s closure in 1930 marked the end of an era. The shift towards oil as the preferred fuel for modern ships contributed to the mine’s decline, casting a shadow over its once-thriving legacy.
• Golden Symphony: From Exploration to Bukit Mantri (Past to Present)
  • Early Echoes: The pursuit of gold dates back to the early days of North Borneo, with explorations revealing promising sites at the Segama Highland, Mantaritip Valley, and other strategic locations.
  • Bukit Mantri’s Overture: Today, the gold rush echoes in the corridors of Bukit Mantri. This region stands as a contemporary testament to Tawau’s enduring quest for mineral wealth.
  • The Mantri Block: Encompassing 475 hectares of a larger 946.1-hectare canvas, the Mantri Block unveils a treasure trove of minerals. An epithermal vein style gold deposit, this block conceals within it 1.69 million tonnes of ore, adorned with 4.6 tonnes of gold, 14 tonnes of silver, and 4,000 tonnes of copper.

Marine Industry: Tawau’s Flourishing Fisheries

In the rhythmic dance of waves, Tawau’s maritime legacy unfolds—a tale of entrepreneurial vision, deep-sea endeavors, and the delicate balance of marine bounty.

• Borneo Fishing Company’s Prelude (1917):
  • Captain Jiro Orita’s Maritime Maestro: The maritime saga commenced in 1917 when Captain Jiro Orita, navigating the seas with astuteness, founded the Borneo Fishing Company in Tawau. His venture cast the first lines into the abundant waters surrounding Tawau.
  • Processing Pas de Deux: The fish caught in these azure waters found their way to Amil Island near Semporna for meticulous processing—a balletic partnership between sea and shore.
  • Export Elegance: The fruits of the marine ballet were transported to Tawau, transforming the coastal town into a nexus of marine export. The Japanese, from 1926 onwards, elevated Tawau as a pivotal hub for their deep-water fishing industry—a symphony of trade played out on the Pacific stage.
• Prawn Farming Crescendo (1970s):
  • Harvesting Harmony: The aquatic opus took a new turn in the 1970s with the inception of prawn farming. Tawau embraced the cultivation of high-quality tiger prawns—a crescendo in the maritime repertoire.
  • Global Gavotte: The prawns, nurtured in Tawau’s waters, embarked on a global journey. From Korea to Japan, Taiwan to China, and Singapore to beyond, Tawau’s prawn exports danced across international waters.
  • Aquaculture Ensembles: Local prawn farming found expression through companies like Sankina Aquaculture, XW Aquaculture (Pegagau Aquaculture’s new custodian), and Asia Aquaculture under the CP Group—an aquatic ensemble contributing to Tawau’s thriving seafood symphony.

3.4 Tourism

• Sipadan:
  • Gateway to the Subaquatic Canvas: Tawau stands as the gateway to Sipadan, a tropical haven that earned accolades as the Best Diving Destination at the 2018 Nature Travel Awards. French oceanographer Jacques Cousteau’s words echo—a pristine piece of art beneath the waves, preserved for explorers of today.
• Semporna:
  • Marine life in Semporna: Semporna, a coastal crescendo, draws 3,000 tourists daily into its marine ballet. In 2019, Tawau Airport witnessed a crescendo of its own—a growth of 11.4%, with 1.8 million passengers traversing its runways. The symphony envisions a future where 2.5 million tourists will weave through Tawau’s cultural tapestry by 2030.
• Wildlife in Tawau Division:
  • Eco-Tourism in Danum Valley and Tabin Wildlife Reserve: Beyond the coastal rhythms, the hinterlands of Tawau Division resonate with an eco-tourism sonata. In the vast expanse of Danum Valley and Tabin Wildlife Reserve, wildlife performs a symphony of its own. Borneo Pygmy elephants, Banteng wild cattle, Sunda pangolins, orangutans, proboscis monkeys, clouded leopards, slow lorises—the cast of characters invites explorers into a verdant theatre.
  • A Tale of Loss and Renewal: Amidst this biodiversity, the poignant melody of the Sumatran Rhinoceros fades. The last remaining rhino bid farewell, leaving an empty spot in the ecological score. Yet, a program arises—an initiative to import and breed this elusive species from Kalimantan, Indonesia.

Unique Attributes:

Opportunities to develop agriculture, fishery and tourism.

4.0 Language

Malay, Chinese, English are the most common languages in Tawau. 

Unique feature

The common Malay language provides effective communication in government, business and the local community.

5.0 Investment Opportunities

5.1 Airport:

• Construct a new airport with a capacity to serve 2.5 million passengers, addressing the escalating tourism demands.

5.2 Tourism:

• Cater to the growing influx of tourists (1.1 million in 2019, projected to reach 2.5 million by 2030) by developing 20–40 new hotels and expanding transportation services, including tourist buses, ferries, and helicopters.
• Focus on attracting North Asia tourists to Semporna, emphasizing its pristine water, diving sites, abundant seafood, tropical fruits, and relaxed ambiance.

5.3 Infrastructure:

• Highway Development: Establish new interstate highways to complete the Eastern Borneo Connection, spanning from Serudong Tawau to Simanggaris in North Kalimantan (approximately 20 km).
• Water Infrastructure: Implement a clean water treatment plant for Tawau Divisions, serving two million people by 2030.

5.4 Agriculture:

• Oil Palm Plantation: Invest in 40,000 hectares of oil palm plantation with a CPO mill capacity, strategically located in Tawau, Kunak, Mostyn, Lahad Datu, Merotai, Balung, Serudong, and Kalabakan.
• Cassava Cultivation: Allocate 300,000 hectares for the cultivation of cassava species (Sri Kanji 1 and Sri Kanji 2) to meet the demand for cassava chips for animal feed and starch derivative maltodextrin.
• Silviculture: Invest in 40,000 hectares of timber concession land for eucalyptus plantation.

5.5 Special Economic Zones (SEZ):

• Food Industry: Establish SEZ for cassava starch derivatives, including maltodextrin, acetylated starch/oxidized starch, and cross-linked starch.
• Agriculture: Develop a Palm Oil downstream industry in Lahad Datu.
• Aquaculture: Invest in a 2,000-hectare fish farm in Tawau Division, producing 20,000 mt of marine fish per year.
• Cold Chain: Set up cold chain hubs in Tawau, Lahad Datuk, and Kunak to support the fishery industries.
• Tourism: Create a tourism marine park in Semporna.
• Wildlife: Harvest birds’ nests at Baturong, Sengarung, Tepadung, and Madai Caves, aiming for international standards and promoting eco-tourism.