ASEAN Ports Association Malaysia (MAPA)

WESTPORTS Malaysia Sdn Bhd, operator of the country’s busiest port, expects to see growth in its business for next year despite the gloomy global economy.

Its chief executive Ruben Emir Gnanalingam said despite the global economic crisis and news of the European economy in recession, consumption worldwide is increasing.

He said Westports’ cargo volume is growing due to rising demand in India and other African and West Asian countries.

“Although the economic outlook is not so good for most of the world, consumption is increasing and cargoes need to be moved from the countries manufacturing them to countries that consume them. So there is a lot of growth,” Ruben Emir said.

Westports’ core business is container operations and its major clients are CMA CGM group, China Shipping and United Arab Shipping Corp.

He said Westports is confident of handling seven million TEUs of container cargo this year.

“I think we have hit six million TEUs and so, with one million TEUS more before year-end, I think we should be almost touching it,” Ruben Emir said.
Last year, Westports handled 6.4 million TEUs.

However, he said Westports hopes to achieve eight to 10 million TEUs once its additional 300m berths and 600m berths are completed by 2014. Bernama

Port operator will expand terminal if global economy keeps improving

PETALING JAYA: Westports Malaysia Sdn Bhd will commence its RM600mil terminal expansion next year if the global economy keeps improving and starts contributing to the growth of its container volume.

Executive director Ruben Emir Gnanalingam said the project to build container terminal six was to have started last year but was postponed as the port had not reached its internal trigger point that should prompt the expansion for extra capacity.

“Our capacity now is about seven million twenty-foot equivalent units (TEUs) and we expect to handle only 4.3 million to 4.4 million TEUs this year.

“All the tender specifications for the project are ready as they are quite similar to our previous terminal expansion projects,” he told StarBiz.

Ruben said Westports had recently revised upward its targeted volume for this year from four million TEUs due to the month-on-month steady growth from the first quarter.

“The earlier target for 2009 was lower due to the sharp slump trend started in the last quarter last year.

“But the trend has been improving in the second quarter with average monthly volume of 360,000 TEUs, and even better in the current quarter with 400,000 TEUs,” he said.

Year-on-year, he added, the current third quarter still fared behind as Westports did very well in its third quarter last year with a record-breaking 475,000 TEUs in August.

Westports handled about 4.97 million TEUs in 2008.

On the global economic crisis, Ruben said Westports managed to identify and practised sustainable cost-cutting measures during the not “too busy” period to be more resilient in the future.

“We have not been able to really study our cost-saving measures previously as we were too busy with the rapid growth. But now, once we have identified the areas where we can cut costs, we will sustain the practice.

“We also managed to focus on intensive staff training in the lull period as Westports did not retrench any workers although its volume was down earlier in the year,” he said, noting that the port employed about 3,250 workers.

He said the training and cost-cutting measures made the port even more prepared to seize opportunities when the economy picked up.

On its mission to make Port Klang a bigger hub in the region, Ruben said Westports, which recently celebrated its 15th anniversary, would continue to focus on enhancing its productivity and services.

“We will also be looking at improving bunkering and feedering activities at the port,” he said.

Feedering is a process where smaller ports feed containers to hub ports as the latter have higher connectivity due to more calls made by shipping lines, while bunkering is fuel supply services to vessels.

Westports’ feedering activities come from ports in South-East Asia and India.

He said it was important for Port Klang to strive to be a bigger hub as it would not only benefit the port but also local importers and exporters.

“There is a huge difference between the freight rates of a non-hub port and a hub port. The freight rates at the hub port is cheaper due to the competitiveness of the many shipping lines, volume and the availability of empty containers,” he said.

Ruben said Westports had come a long way from its inception in 1994 and would continue focusing on sustainable development that included the Pulau Indah community and the environment.

“Apart from making the island more industrious with job opportunities and supporting services to the port, we now want to make it more friendly with communal facilities.

“For the environment, Westports – which is already known for its ‘garden port’ concept – will try to plant more trees,” he said.

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

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