ASEAN Ports Association Malaysia (MAPA)

Port of Tanjung Pelepas (PTP), the country’s premier transhipment terminal, is working towards increasing hinterland cargo volume to achieve a more sustainable business model, says chief executive officer Captain Ismail Hashim.

On average, PTP now handled 95% transhipment and 5% hinterland cargo, he said.

“We feel that we have to strike a better balance to achieve a more sustainable business model,” he told StarBiz via e-mail.

Development in Iskandar Malaysia, which included logistics, would in turn support hinterland cargo growth, he said.

An aerial view of Port of Tanjung Pelepas.The port now has 12 berths and a terminal handling capacity of 10 million TEUs per year.

“In this respect, PTP, along with its sister companies Johor Port and Senai Airport, will play complementing roles to further strengthen the logistics sector in Johor.

“The presence of strong logistics infrastructure in Iskandar Malaysia and Johor will attract investors, manufacturers and industries that are looking for strong and efficient logistics backbone,” Ismail said.

This would result in an increase in Johor’s hinterland volume, he added.

PTP’s 1,000-acre free-zone land has also been successful in attracting brands, contributing to the hinterland volume of PTP.

“Companies which are already rooted in Pelepas Free Zone include Ciba Vision, Flextronics, BMW, JST as well as logistics players such as Maersk Logistics, Nagai Nitto, Schenker Logistics and Century Logistics.

“We are continuously marketing the free-zone land to attract more players,” Ismail said.

The port’s aims to quadruple its volume in the next 20 years augurs well for hinterland cargo.

Ismail said in line with the expected increase in volume and its long-term goal, PTP would have to expand its port infrastructure.

“Some of the factors that shipping lines look for when deciding on a port of call is the accessibility to the port, operational efficiency and capability to handle current and future volumes (scalability).

“In the case of PTP, we belief we will be able to achieve this due to the value propositions that we have to offer,” he said.

PTP currently has 12 berths and a terminal-handling capacity of 10 million TEUs (twenty-foot equivalent units) per annum.

Ismail said it had the space and potential to build up to 95 berths with a terminal-handling capacity of more than 100 million TEUs.

PTP handled about 5.6 million TEUs last year.

On the current business environment, Ismail said it had been very challenging for all port operators globally due to the economic downturn.

“However, PTP has shown outstanding performance in weathering this stormy condition, especially in the second half of the year,” he said.

He noted that PTP registered a 3.4% increase in volume as at September compared with the same period last year.

“Despite the downturn, we expect to see some growth this year via the new services introduced through our existing and new customers such as CMA CGM,” he said.

By: Sharidan M. Ali

Northport (M) Bhd’s commitment to human capital development was recognised recently when it bagged the 2009 Human Resources Ministry HR Development Award under the major employer (services sector) category.

The award, organised annually by Pembangunan Sumber Manusia Bhd, is the country’s leading event to recognise leadership and benchmark human resource practices.

Northport managing director and chief executive officer Datuk Basheer Hassan Abdul Kader said that as a service-related company, Northport placed high importance on human capital development.

Datuk Basheer Hassan Abdul Kader

This was to ensure service levels offered by the port meet global standards, he said in a statement.

“We are a global port serving the needs of more than 100 global shipping lines which connect Northport to more than 300 ports worldwide.

“Thus the expectation is very high on the delivery standards and performance levels which cannot be achieved unless we have well-trained and dedicated workforce in Northport,” he said.

Northport has 2,700 employees.

Basheer said in view of the heavy responsibility placed on the port’s workers, Northport had given considerable importance to retraining and skills upgrading.

“We have a dynamic human resources development programme which aims to equip our employees with specialised and up-to-date skills. This is especially since businesses are becoming more competitive and demanding,” he said.

Northport is Malaysia’s largest multi-purpose port. It offers the widest shipping connectivity among ports in the country.

By: The Star Online

By forming a new subsidiary to manage its ferry business, Penang Port can make strategic moves at turning around the unit, says its managing director

The Economic Planning Unit (EPU) has given the much-awaited nod to terminal operator Penang Port Sdn Bhd (PPSB) to separate its loss-making ferry operations from its core port business, and make it a subsidiary of the company.

The move by the EPU, a body established under the Prime Minister’s Department, is part of a major restructuring plan aimed at facilitating the port operating unit’s listing on Bursa Malaysia.

PPSB managing director Datuk Ahmad Ibnihajar said the separation of the two businesses, which is likely to take place this year, will create distinct identities for PPSB’s ferry and port operations.

“This restructuring exercise is expected to be endorsed by PPSB’s board when it meets on October 9 and we are looking at positioning the ferry operations as a public transport provider like Rapid Penang and the light rail transit service,” he told a press conference in Penang yesterday.

Present was PPSB’s newly-appointed chief operating officer Azlan Hamid.

Ahmad said by forming a new subsidiary to manage its ferry business, PPSB can make strategic moves at turning around this unit.

“One way to fill our fleet of eight ferries up and ensure that they run optimally is to team up with Rapid Penang.

“We plan to load their buses on our ferries – which currently operate at only 25 per cent capacity – and allow passengers to travel on a single ticket,” he added.

He said discussions on the fare structure for this proposed merging of services between PPSB and Rapid Penang will be held with Rapid Penang’s chief executive officer Azhar Ahmad soon.

The ferry service, which links Penang island to the mainland, has been a stumbling block to the port opera-ting company’s initial public offering.

Last year, ferry losses stood at RM24.6 million, a 71 per cent increase over RM14.4 million in 2007.

“The massive losses last year were due to fuel cost. We are looking at losses of RM14 million this year,” Ahmad said.

In July this year, Second Finance Minister Datuk Seri Ahmad Husni Mohamad Hanadziah was reported as saying that state infrastructure company Syarikat Prasarana Negara Bhd had been given the mandate by the Finance Ministry to carry out a study on the viability of taking over the ferry service from PPSB.

The public ferry service was absorbed into PPSB as part of its corporatisation deal with the Penang Port Commission in January 1994. Some 6,500 passengers and 3,000 vehicles use the service daily. Passengers pay RM1.20 each, while the fare for a car is RM7.70.

Meanwhile, Ahmad said Penang Port’s container throughput for 2009 is expected to match the 2008 volume of 929,639 TEUs (20-foot equivalent units).

By Marina Emmanuel

Penang Port Sdn Bhd (PPSB) is throwing the ball back into the court of international shipping lines who have slammed the terminal operator for not penalising shippers that overload their cargo containers on a vessel.

PPSB chief executive officer Datuk Ahmad Ibnihajar said it was based on the appeals made by shipping lines to allow overloaded vessels into the port that resulted in no enforcement made to date.

“It’s the members of the International Ship Owners’ Association of Malaysia (ISOA) themselves who have been appealing to us and now they are blaming us for not penalising the offending shippers,” he told Business Times.

Ahmad was responding to a Business Times report where international container shipping lines operating at Penang Port slammed the terminal operator for not penalising shippers who overload their cargo containers on a vessel, saying it could lead to an accident.

ISOA secretary Fong Keng Lun said requests for enforcement have been sent to PPSB as early as June last year, but so far the calls have gone unheeded.

Ahmad said PPSB will be calling a meeting of all its users soon and ask them to decide whether they want enforcement to take effect immediately.

“The ISOA members can decide if they want us to ignore their previous appeal and support the rule that any overweight containers detected by us be not allowed to be loaded onto the vessels,” he added.

Fong had claimed that ISOA had sent repeated requests to PPSB to impose the rule that any overweight containers detected by the terminal operator will not be allowed to be loaded onto the vessels.

He said apart from the risks to human lives and the transportation operators’ equipment, some of the overweight containers were subsequently detected at transshipment ports like Hong Kong and were held back until the shipping lines had repacked the overweight containers.

The maximum permissible weight of a 20-foot container is 24 tonnes, 30.48 tonnes for a 40-foot container and up to 32 tonnes for a new-generation 40-foot container.

By : Marina Emmanuel

Ten new palm oil storage tanks to be constructed

KUCHING: Bintulu Port Holdings Bhd (BPHB) is embarking on a RM600mil expansion programme to boost Bintulu Port’s cargo handling capacity.

Chief executive officer Mior Ahmad Baiti Mior Lub Ahmad said the expansion of the container terminal, which started seven months ago, would raise annual handling capacity by 250,000 TEUs (twenty-foot equivalent units) to 650,000 TEUs when completed next year.

Also under implementation is the expansion of the multi-purpose terminal for dry bulk cargo.

Mior Ahmad said the construction of the proposed RM14.9mil container freight station was awarded last week.

To be awarded soon was a contract to build 10 new storage tanks for palm oil, he said. The proposed RM25mil project will boost storage capacity by 26,000 tonnes from 76,000 tonnes.

Also in the pipeline are the proposed development of 19.1ha for port operation buildings and yard and an additional berth for the edible oil terminal.

Other planned projects included the conversion of the existing 200m general cargo wharf into a containerised cargo wharf and the purchase of more cargo handling equipment, Mior Ahmad said after the company AGM yesterday.

“All these projects are expected to be completed by 2011,” he said.

Chairman Tun Mohd Eusoff Chin said in a statement that the company would expand the liquefied natural gas (LNG) facilities if the need arose.

“Currently, the LNG segment contributes 78% to the group’s total operating revenue,” he said, adding that in the next five years, LNG cargo would account for 60% of operating revenue.

Mior Ahmad said LNG handling contributed about RM330mil to revenue last year while containerised cargo and palm oil accounted for some RM33mil and RM22mil respectively.

BPHB recorded group operating revenue of RM448.8mil for the year ended Dec 31, up by RM31.6mil from 2007. Group pre-tax profit jumped to RM205.9mil against RM189.2mil in 2007.

Statistics have shown that container volume grew by over 15% to 290,167 TEUs last year from 251,800 TEUs in 2007.

Mior Ahmad said the economic slowdown had adversely affected Bintulu Port’s container cargo traffic, which dropped by about 30% for the first three months of this year against the same period last year.

However, he said there were positive signs that the situation had steadily improved.

“For dry bulk fertiliser there was zero import in the first quarter this year. But there are two shipments coming in this month,’’ he added.

LNG export volume, however, had sustained, he said.

He said 15 shipping lines (container cargo) were now calling at Bintulu Port.

By JACK WONG

PETALING JAYA: A number of port operators in the country have reported higher throughput volume for March but are cautious about volume going forward as the signs of recovery are still weak.

According to them, imports and exports as measured by twenty-foot equivalent units (TEUs) were up for March while transhipments – the shipment of goods to an intermediate destination before moving to another destination – were also up.

Westports Malaysia Sdn Bhd executive chairman Tan Sri G. Gnanalingam had noted earlier in a commentary that in March, Westports’ total volume, including imports, exports and transhipments, was up 10% compared with the previous three months.

He said the immediate question that came to mind was whether these were signs of recovery or if this was due to inventory corrections after managers cancelled their orders between October and December last year.

“As such, between April and June, we’ll begin to notice that the world will not only reinstate its inventory levels but also increase its orders simply because life must go on,” Gnanalingam said.

Captain Ismail Hashim, chief executive officer of Port of Tanjung Pelepas Sdn Bhd, which operates the number one transhipment port in the country, said volume grew 23% to 469,000 TEUs for March compared with February.

He said it was tricky to accurately predict the underlying reasons behind the recent increase in volume. “Whether the increase is sustainable over the longer term remains to be seen,” Ismail told StarBiz in an e-mail reply.

He said if the recent upturn was due to restocking of manufacturers’ orders as a result of them halting production abruptly earlier on when the crisis first started then the spike in volume could be “just a temporary pattern.”

Penang Port Sdn Bhd general manager Obaid Mansor said the Butterworth container terminal saw a bottoming in January when throughput was 30% lower than October 2008.

“The upturn in business was really registered in the export transhipment trade provided by our industrial hinterland,” he said, adding that a combination of improved demand for manufactured products, re-stocking, trade credit availability and demand from China and India could be the factors that contributed to an improvement in volume.

By FINTAN NG

PASIR GUDANG: Johor Corp (JCorp) will be investing RM500mil under the second phase of the Tanjung Langsat Port expansion plan this year, said chief executive officer Tan Sri Muhammad Ali Hashim.

Two new berths measuring 500m each dedicated to the handling of general cargo would be built at the port, he said.

“It is necessary to further expand and upgrade facilities at the port to accommodate the needs of existing investors and to attract potential ones,” Ali told reporters after presenting awards to athletes of the Johor Yachting Association on Saturday.

JCorp is the parent company of port operator Tanjung Langsat Sdn Bhd (TLSB) and TMP Technopark Sdn Bhd, which is developing the 1,400ha Tanjung Langsat industrial estate.

Since 2000, TLSB has invested RM500mil in the port, equipping it with machinery to handle liquid petroleum cargo and other hazardous chemicals and building storage facilities.

Ali said the port was originally built to handle liquid petroleum-related cargo, not general or dry cargo. “However, we have to make some changes to include berths for handling general cargo as there is demand for such facilities here,” he said, adding that the port would have between 12 and 14 berths under the port’s long-term expansion plan.

Ali said to date, there were 21 local and foreign companies operating in the industrial estate with a combined total investment of RM10bil including infrastructure.

He said although the outlook for the global economy was uncertain, there remained opportunities in niche segments such as the petrochemicals industry.

JCorp will be targeting more investors from the Middle East and will join a trade delegation to the United Arab Emirates later this month, according to Ali. He said that the Middle East investors he met on his trips to the Gulf States recently had expressed their commitment to invest more in Malaysia.

“They did not want to take any more risk by putting their monies in Europe and the United States unlike before and now most of them see Malaysia as a safe haven for their investments,” he said.

By ZAZALI MUSA

NORTHPORT is considering to delay the upgrading of one of its wharfs due to the economic slowdown.

“I understand that Northport is considering holding back the upgrade but whether they should hold it or not is another question,” Port Klang Authority general manager Lim Thean Shiang said during a briefing in Port Klang last Tuesday.

He said certain developments were necessary to cater to continued growth even though there may not be an immediately need for it.

“During recession one can only position oneself to be ready for the up and coming growth cycle, and if we do not have the adequate facilities available, how do we capitalise on such opportunities?” Lim said.

He said Port Klang would monitor the situation and hold consultations with ports on issues involving the development of the ports.

Northport managing director and chief executive officer Datuk Basheer Hassan Abdul Kader was quoted as saying in November last year that it would keep its RM500 million expansion plans on track.

The plan includes the development of a 350m container berth, bringing the container quayline at the port to a total of 3.4km.

By : btimes.com.my

PETALING JAYA: Three major ports in Malaysia are confident they will meet their volume targets this year but are bracing for slower growth next year due to the global economic downturn.

Ports that have been recording substantial growth over the years have not been spared the whiplash from the global economic crisis.

Datuk Basheer Hassan Abdul Kader

Northport (M) Bhd managing director and chief executive officer Datuk Basheer Hassan Abdul Kader told StarBiz the port would be able to achieve its volume target of slightly less than three million 20-foot equivalent units (TEUs) this year, up 4.9% from 2.86 million TEUs recorded last year.

“This is because we had done well in the first half of this year but the last quarter is a little bit slow,” he told reporters after delivering a talk the Selangor Freight Forwarders and Logistics Association in Port Klang recently.

Northport’s November volume stood at 261,251 TEUs, down 7.3% against the same month last year.

Going forward, Basheer said Northport would be very concerned about the country’s economy as it depended a lot on trade.

“If Malaysian trade is affected, of course it will have some impact on our business. But with low gearing of almost 0%, we are quite robust to withstand the onslaught,” he said, adding that Northport had survived the Asian financial crisis of 1997/98.

He added that Northport would continue to operate prudently and would look into postponing taking on less important costs, such as advertising, next year.

Echoing a similar oulook, Westports Malaysia Sdn Bhd will not be expecting the usual double-digit volume growth next year that it had been enjoying previously.

But the port is still expecting to post a 16.3% volume growth to five million TEUs this year.

Ruben Emir Gnanalingam

For the month of November, Westports still recorded a growth of 5.4% to 390,000 TEUs against November last year.

Executive director Ruben Emir Gnanalingam said the port industry would see some decline in volume next year.

“Looking at the current global economy and its prospects going forward into 2009, it will take a long time to recover, maybe until 2010,” he told StarBiz.

Malaysia’s leading transhipment terminal operator, Port of Tanjung Pelepas Sdn Bhd (PTP), is also on track to meet its volume target of 5.8 million TEUs this year, an increase of 6.2% against last year, although it has felt a slight volume contraction in the last quarter of this year.

PTP recorded a decrease of 2.5% to 449,000 TEUs in November compared to the same month last year.

The port expects to achieve commendable growth next although it has acknowledged that it would not be as robust as in previous years.

Alan Tan

Transways Logistics (M) Sdn Bhd, a logistics provider in Port Klang, expects the volume of exports to decrease further after the first quarter of next year.

Its managing director Alan Tan told StarBiz that based on the current situation where furniture and food exporters were facing shrinking demand, the export volume at Port Klang was expected to fall between 20% and 30% next year, especially after the first quarter.

“But local logistics companies such as Transways are currently experiencing a surge in demand from multinationals as they open more tenders to other players which ignite competitive pricing rather than depending on one or two logistics providers.

“This is in tandem with the cost cutting measures of the multinationals in this gloomy economy.

“Warehouse business is also doing well to store commodities that are currently having price downtrend such as scrap metal,” he said.

By SHARIDAN M. ALI

Terminal operator Northport (Malaysia) Bhd has embarked on a cost-cutting exercise that will see all recruitment frozen and advertising spending slashed, in anticipation of worsening economic conditions.

“Many people are predicting that things are going to get worse next year, and so we are preparing ourselves to ride through this crisis. An obvious way is to cut costs,” said its managing director and chief executive officer Datuk Basheer Hassan Abdul Kader.

He was speaking to reporters after delivering a talk titled “Expanding the Operating Capacity of Northport through Implementing Strategic Initiatives” at the Selangor Freight Forwarders and Logistics Association in Port Klang last week.

Basheer said the port has put a freeze on staff recruitment and postponed or cut spending in areas such as advertising.

“However, we have no plans to retrench staff. In fact, it did not cross our mind,” he said, adding that the port had recruited about 30 people in the last three months.

Basheer believes that Northport’s restructuring and merger exercise between Klang Container Terminal Bhd and Kelang Port Management Bhd in 2000 will put the port in good stead to withstand the current downturn.

This includes its strategy over the past few years of focusing on revenue and profit growth instead of volume growth; the optimal utilisation of its assets such as land, labour and capital; and moving to higher-margin businesses comprising container, conventional cargo, logistics and automotive.

“Because of our prudent policy where we have kept our gearing to almost zero, we are well positioned to withstand the current crisis,” he said.

Northport is also keeping its RM500 million expansion plans on track, which include the development of a 350m container berth, bringing the container quayline at the port to a total of 3.4km.

Basheer also said the port remained on track to meet its forecast of three million TEUs (20-foot equivalent units) in container throughput this year.

However, he warned that the port has started seeing a drop in cargo volume in the fourth quarter of this year.

“Northport’s focus is import and export trade, particularly intra-Asian trade. As such, this recession is a concern to us because if Malaysian trade is affected, Northport will also be affected.

“We are starting to feel the effects of the global slowdown in the current quarter. But the drop (in cargo volume) is nothing to be seriously alarmed about yet,” said Basheer.

By : btimes.com.my