Economic History of Tawau

Chinese who came all the way from China, apart from devoting themselves in the agricultural or plantation sector, also involved themselves in the coal mining, logging and fishing activities.

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Due to its superior location, its ability to trade with Indonesia, and its large plantations, commercial activities grow by the day. After 20 years of town hood, its yearly trade had reached One Million Ringgit.

In 914, the first road covered by gravel and sand was constructed, named after the first resident, Sir Dunlop. After the opening of Dunlop Street, the early shops and houses of Tawau was built alongside this mile-long street.

Apart from roads, a rail road (Gerabak Tolak) was built in Tawau. It started from the port, along Dunlop Street all the way to Kuhara Plantations. Its branch reaches Kubota Plantation through Sin Onn road. Apart from transporting agricultural products and rice from Japanese plantations, it also transports water from the Tawau River to the town centre.

Tobacco/Manila Hemp

The rich soils of Tawau due to the presence of dead volcanoes in the region allowed for agricultural activities to grow at a tremendous rate. In the year 1898, Hans Peterson Tobacco Company started planting tobacco along the Tawau River. However, in 1915, a Japanese company bought a tobacco plantation in the Abaca area and started planting rubber and manila hemp.

By 1940, the manila hemp plantations of Japanese had reached a size of 3819 acres and Tawau became the only producer of manila hemp for the British Empire.
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Since the early days, the people of Tawau had relied on the seas for their daily living. Different types of high-level fishes and crustaceans can be found in the waters around the coast of water. For the early settlers, sourcing food from the sea was as easy as it can get. The living and economic conditions were simple and people fished from sampans. There was no urgent need to develop the deep-water fishing industry in Tawau. Not long after, the Chartered Company discovered the potential of developing deep-waiter fishing as a means to diversify the economy.

In 1917, Japanese merchant vessel captain Jiro Orita started “The Borneo Fishing Company”, this was different from the main methods of catching fish back then. First, it had a much bigger operation. Second, it was export-oriented. The company had an office in Tawau. Fish being caught around the area was brought to Amil island, around 10 miles south east of Semporna, and processes there, whereby it will be transported to storage facilities in Tawau waiting for export. From the start of 1926, the Japanese used Tawau as a base for a deep-water fishing team, making fishery the third largest export item.

Today, prawn-farming is considered as of the mainstays of the economy of Tawau. Prawns harvested from Sabah, especially Tawau, is considered one of the best. Tawau has supplied tiger prawns to neighbouring countries such as Indonesia, Singapore and Japan for decades and until today, many deep-water fishing boats can still be seen off Cowie Bay.

(photo sourced from:jacek proniewicz travel blog)


During the end of the 18th century, coal was discovered near the Silimpopon River in Tawau. In 1904, The Cowie Harbour Coal Company started coal mining operations in a portion of the twenty-square-mile land lease given to the company by the British North Borneo (Chartered) company. They employed contract workers from southern China as miners. As a place full of natural resources, Tawau became one of the most important coal mining area in south east Asia. In July 1905, 5 tons of coals were exported and up to 60000 tons of export were achieved during the first 12 years.

In the year 1922, peak production was reached with 87543 tons of coal being mined, and Silimpopon became one of the most important coal mines in south east Asia. During peak times, the company employed 1200 miners, most of which are contract workers from southern China and Chinese who were sent to France to become wartime labourers during World War I.

In the year 1931, the coal mine was shut due to the huge drop in price of coal and most of the miners were transferred to other south east Asian nations.


In the 1950s, cacao was introduced into Tawau as a cash crop, and planting was started by BAL Plantations. In 1976, peak price was reached with every ton of it selling at a price of 12000 Dollars, and a “cacao wave” started in Tawau.  Plantations big and small started planting cacao and in 1989, a record number of cacao planting was recorded with up to 120 thousand acres of land being planted with cacao.

After 1976, the price of cacao started to fall and in 1990, a new low was reached with the price being less than 2000 dollars per ton. In 1998, the size of cacao planting area has reduced to around 34000 acres, and annual production was at 40000 tons. However, Tawau still remains as the most important place for the planting and production of cacao. Tawau is the third largest producer of cacao, after Cote d’Ivoire and Ghana, and Tawau was the largest producer of cacao in Malaysia.

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Feature image sourced from:

Oil Palm

Oil palm is currently the main source of income for the agricultural sector of Tawau. After the Abaca Plantation Company was being bought off by Sime Darby, most of the cocoa estate was converted into oil palm estates for the plantation of oil palm. Most small farm owners also converted their cocoa into oil palm after the heavy fall of price for cocoa.