ASEAN Ports Association Malaysia (MAPA)

MARSEILLE: Malaysia’s liberalisation of 27 local services sub-sectors, including the transport sub-sector, prompted French shipping giant, CMA CGM to mull over plans to strengthen its foothold in the country.

Transport Minister Datuk Seri Ong Tee Keat had during a visit to the headquarters of the world’s third largest container shipping company in the French city last Thursday shared the Malaysian Government’s policy to liberalise the transport sub-sector, including the opening of 30% restriction in foreign ownership.

CMA CGM has had a presence in Port Klang since 1994 and is one of the largest customers of Port Klang. It has since June 1 also served the port of Tanjung Pelepas.

In welcoming the move, the company’s president Jacques R. Saade said “such liberalisation will change the strategy (of the company) in Asia.”

The shipping giant also welcomed Ong’s announcement of gradual liberalisation of cabotage of key sectors such as from Peninsular Malaysia to three major ports in east Malaysia, namely Sepangar, Kuching and Bintulu. (See also page 7)

Saade said the company would seriously explore the opportunities available from such a move. He also said the company would expand its dry port bonded warehouses, which include the Port Klang Free Zone.

Later, Ong visited the Port of Marseille, one of the oldest and busiest sea ports in France.

Marseille Port also raised its interest to establish an in-house university specialising in shipping and maritime as part of its education and training project.

Ong took the opportunity to test-drive its state-of-the-art port simulator.

By SHARIDAN M. ALI

MALAYSIA’S major ports should be able to withstand the onslaught of the global economic crisis, at least for this year.

In fact, many are still projecting growth in volume although business may not be as robust as in previous years.

There are about seven major container ports in the country – Northport and Westports in Port Klang; Penang Port; Port of Tanjung Pelepas and Johor Port in Johor; Bintulu Port in Sarawak; and Sapangar Bay Container Port in Sabah.

The harsh impact of the global economic crisis has resulted in declining world trade. However, healthy intra-Asian trade and higher local public spending growth is expected to spur more imported goods and raw materials.

OSK Research, which has lowered the country’s gross domestic product forecast for this year to 1.1% from 2.7%, says the RM7bil economic stimulus plan by the Government should be able to support high public spending this year.

Most analysts say the ports’ stellar performance in past years has boosted their resilience to sail through the choppy waters.

Moreover, they are somewhat “protected” from the economic storm due to their location, particularly those along the Straits of Malacca, the main maritime trade route in Asia.

Ports in east Malaysia are also strategically placed in the Brunei, Indonesia, Malaysia, Philippines-East Asean Growth Area (BIMP-EAGA).

It helps, too, that the ports have a mixed portfolio of handling transhipment as well as exports and imports. Most of the Malaysian ports managed to meet volume targets last year although by the fourth quarter, early signs of a trade decline were evident.

Northport (M) Bhd and Westports Malaysia Sdn Bhd, the two terminal operators at the country’s maritime gateway Port Klang, are confident of maintaining volumes this year.

Northport posted slightly more than three million 20ft equivalent units (TEUs) last year, up 5% from 2007. It also expects to continue its RM585mil expansion plan which will be funded with internal funds.

On the other hand, Westports recorded around 16% volume growth in 2008 to slightly under five million TEUs. The positive forecast this year is supported by Westports’ biggest customer, CMA-CGM. Similarly, the global slowdown has not thrown a spanner in the works for Westports’ RM800mil expansion. The port’s container terminal five has been completed, adding a capacity of 1.2 million TEUs to a total of 7.2 million TEUs.

Its executive director Ruben Emir Gnanalingam, in his New Year’s message to the staff of Westports, says the company will embark on plans to consolidate its business in terms of processes, staff skills and initiatives given the relatively quieter period.

“Our manpower strength is currently at 3,650, which is sufficient to see us through the expected volume.

“Our next batch of recruits would probably come in during the second quarter of next year,” he said.

The country’s main transhipment port, Port of Tanjung Pelepas (PTP), expects to break even this year at 5.6 million TEUs.

“The current situation is unprecedented,” says chief executive officer Capt Ismail Hashim, adding that the best and worst-case scenario would see a 15% rise or 10% drop in cargo volume for the year.

Noteworthy is that PTP has experienced a 6% contraction in cargo volume in the final quarter of 2008 against the corresponding period a year earlier.

“But we are keeping our hopes up as our main-line operators, such as Maersk and Evergreen, are anticipating marginal growth this year,” he says. “The non-decline forecast is largely based on our exposure to the still healthy intra-Asian trade.”

Penang Port, according to its chief operating officer Mohd Niana Merican Abd Kadir Merican, expects a flat growth this year given the uncertainties going forward while Sapangar Bay Container Port (SBCP), managed by Sabah Port Sdn Bhd (a wholly-owned subsidiary of Suria Capital Holdings Bhd), is not expecting volumes to fall.

Sabah Port also manages seven other ports in Sabah. Suria Capital group managing director Datuk Abu Bakar Abas is optimistic of the outlook for this year due to the Government’s stimulus package to boost economic activity in the country.

By SHARIDAN M. ALI

The growth of cargo in Malaysian ports for the first six month this year is a very encouraging sign for the port businesses. If the growth continues for the next six month then Malaysian ports would have a very good year and investors would be lining up to snap-up port shares whenever they are available on the market. It is good to see various port shares trading on the KLSE moving upwards and hopefully will be better by the year end.

Ports infrastructures also had remarkable growth – the opening of the Sepangar Bay Container Port, Kota Kinabalu on 1st June 2007, marked a very important step in the development of ports in East Malaysia and particularly in Sabah. After a long break ports in Sabah are beginning to throb again, congratulations to Sabah Ports Sendirian Berhad. When I took a brief visit to the Terminal on 27th June 2007, I saw the container yard was full of containers and I think SPSB may need to reclaim more land for bigger yards!

The deepening of the North Channel in Port Kelang to enable  larger container ships to  enter and exit is another exciting development and hope will be completed soon. In Penang we have the development of the Swettenham Pier, on the Penang Island, into a cruise and leisure terminal intending for the cruise industries which is a booming industry in the Strait of Malacca. Of course, there are also ongoing development activities in PTP, Bintulu and private ports in Peninsular Malaysia.

Port physical growth is encouraging for the future of our economic well being, but we shall not forget  another equally important area that  needs growth – the port human resouces. As major ports in Malaysia grow ahead and  port regulators are  also expanding in order to cope with new areas of responsibilities, personnel with experience and know-how are slowly leaving the ports and pensioning off from port regulators. New personnel are recruited to replace those that left.  The arrival of new personnel which is fresh from universities and colleges and without the in-depth knowledge and experience of those that left have begun to create a vacuum in the ports. Many port regulators are  faced with this dilemma and urgent training of these young and fresh intakes are required in order to get trained and knowledgeable personnel. APA Malaysia had identified many courses that will be held and suitable trainers are being identified and methodologies discussed. I certainly hope that more young officers could be trained jointly by APA Malaysia instead of individually by one port . This is where APA Malaysia could be very useful in conducting joint training for all.

New and interesting ideas are being pushed – such as the Trans-Peninsular Pipeline project from Pulau Bunting, Yan, Kedah to Bachok, Kelantan to transfer oil from Strait of Malacca to South Chine Sea without passing the Straits of Malacca and Singapore – the world’s most congested international waterways. Whether this will materialised and be a reality, time will tell. If it become a reality, then Malaysia will have two additional ports to manage. It will be very challenging for young port officers who will be entrusted to run and manage new ports of the future. What we have to do now is train as many as possible to enable them to take the challenge and manage future ports in Malaysia and the world!

Regards,

Abdul Rahim bin Akob

President,

APA Malaysia.

On the 21^st May 2007, Sapangar Bay Container Port (SBCP) was graced with the visit of the federal Transport Minister Datuk Seri Chan Kong Choy.

Datuk Seri Chan Kong Choy was briefed by Suria Capital Holdings Berhad’ Group Managing Director, Datuk Hj. Abu Bakar Hj. Abas on the current progress of the states newly built container port. It was announced that SBCP was ready for operation on 1^st June 2007 and shifting of the containerization activity from KK port to Sapangar would commence on the mentioned date.

Among the issues that were highlighted in the briefing was the impressive development of the ports in Sabah, in particular Kota Kinabalu port, which had grown in terms of container throughput.

An increase of almost 8.5% was recorded in KK Port from a total of 141 969 teus (in 2005) to 153 793 teus (in 2006) and for the first quarter of 2007, a growth of 20% container throughput was achieved.

In addition, the container rate productivity had significantly increased to 18 boxes an hour and is expected to reach 20 – 22 boxes per hour upon the operation of SBCP. Datuk Seri Chan Kong Choy hailed these improvements as phenomenal and cited the crucial role of crane productivity in terms of faster turnaround time which will attract vessels to SBCP.

Datuk Seri Chan Kong Choy had also mentioned on the need of the ports in East Malaysia to grow and take advantage of the opportunities in the Brunei Indonesia Malaysia Philippines East Asean Growth Area (BIMP EAGA) and for East Malaysian ports to complement each other in this respect.

Among the officials that were in attendance was Sabah’s Deputy Chief Minister cum Infrastructure Development Minister Datuk Raymond Tan Shu Kiah, Assistant Minister to the Chief Minister, Datuk Edward Khoo, Sabah Ports Authority (SPA) Chairman, Datuk Dr Zaki Gusmiah and SPSB Board of Directors and officials.