Tan: ‘Over 20 of our rental revenue comes from the LME and for the storage of copper, zinc, and other commodities.’
It expects to be fully-tenanted by next year
PORT KLANG: The Port Klang Free Zone (PKFZ) will be fully-tenanted with an expected rental revenue of RM80mil per annum by next year, according to PKFZ chairman Datuk Tan Chong Seng.
Tan was confident that by 2020, PKFZ would be able to hit its rental revenue target of RM100mil as there was an overwhelming demand for space by investors.
“Since operating in 2007, we did face difficulties in the beginning. But our revenue grew from just RM3.88mil that year to RM58mil last year. This year we expect to achieve RM70mil in rentals,” he told a press conference here yesterday.
According to Tan, about 90% of the 640 acres of open land in PKFZ is occupied by tenants that comprise a mix of multinationals as well as local players.
Among the major firms that currently occupy spaces in PKFZ are Aker Solutions, Schlumberger, Cargill, DRB-Hicom and SH Cogent Logistics. About a third of the land space in PKFZ is occupied by foreign companies.
“Initially we faced a tough time with (potential investors) but we have slowly built the business up and gained their confidence over the past 10 years. PKFZ is now a widely-recognised logistics hub in this region where investors can confidently store their goods,” he said.
PKFZ has also received recognition from the London Metal Exchange (LME) as well as the Intercontinental Exchange, two of the top commodity exchanges in the world which currently have warehousing and storage operations in the area.
Tan added that LME had increased its commitment to store its commodities in PKFZ after a solution was reached in regard to the exemption of the goods and services tax (GST) for items placed in the zone. At present, goods that are value-added or stored in PKFZ are fully-exempt.
The LME had briefly threatened to stop issuing warrants for metal stored in warehouses in Malaysia last year. The issue was resolved after its GST-exempt status was clarified.
“Over 20% of our rental revenue comes from the LME and for the storage of copper, zinc, and other commodities.
“We have seen encouraging signs as there have been more of the metals being stored at PKFZ this year,” he said.
PKFZ contributes about 130,000 twenty-foot equivalent units (TEUs) to Port Klang and is on track to achieve 500,000 TEUs by 2020, he said.
Going forward, Tan said that the group was working towards getting an exemption of the GST on the rental paid by customers.
“We are working with the related ministries on this matter and hope to achieve a conclusion by next year,” he said. – The Star
