ASEAN Ports Association Malaysia (MAPA)

The expected cost savings from the consolidation of Johor Port and Port of Tanjung Pelepas’ (PTP) operations can still be achieved without changing their corporate structure, says Kenanga Investment Bank research head Yeonzon Yeow.

“The deferment of the rationalisation plan of the two ports will have minimal impact on their parent company, MMC Corp Bhd. Whether they consolidate or not, both ports are still within the group,” he told StarBiz yesterday. MMC owns 100% of Johor Port and 70% of PTP.

MMC proposed to streamline operations at the two ports to reduce cargo leakages to Singapore, which has been going on for many years due to better connectivity offered by Singapore ports.

The consolidation would also see Johor Port’s container operations in Pasir Gudang moved to PTP in Gelang Patah, turning the former into a non-containerised port.

But the Government shot down the idea last week due to the distance between the two ports, which is about 90km, as shippers and manufacturers operating in Pasir Gudang, Tampoi and Tebrau complained that they would incur higher transportation cost going to PTP.

OSK Research Sdn Bhd research head Chris Eng said with the deferment, the listing of MMC’s port units was unlikely to materialise soon.

“Nonetheless, we believe there is still the possibility of MMC list ing its other units, Gas Malaysia Sdn Bhd and Malakoff Corp Bhd within the next two to three years,” he said in a recent note to clients.

Eng said the deferment of the consolidation exercise would also result in PTP’s excess capacity being underutilised for the time being.

He said the main reason for the rationalisation between the two biggest ports in Johor was because the container operations at Johor Port was congested with minimal room for further expansion.

“The consolidation would boost container volume at PTP, helping it reach the eight million twenty-foot equivalent units level, which would then help to attract new customers,” 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

Bintulu Port celebrated its 25^th Anniversary on 15^th August 2006.  The activities to mark the special occasion started on 12^th August till 19^th September 2006 which include the open sea fishing competition, open golf tournament, the game of futsal and netball, religious ceramahs, port open day an port exhibition.  The climax of the celebration was the official opening ceremony of Bintulu Port Authority’s new building “MENARA KIDURONG” by Tuan yang Terutama Tun Datuk Patinggi Abang Haji Muhammad Salahuddin, Yang Di-Pertua Negeri Sarawak on the 19^th September 2006.  The Honourable Tun was accompanied by Toh Puan Datuk Patinggi Hajah Norkiah, Deputy Chief Minister / Minister of Infrastructure Development & Communication of Sarawak / Minister of Rural Development, YB Datuk Patinggi Tan Sri (Dr) Alfred Jabu Anak Numpang.  Also present for the ceremony was Deputy Secretary General (Operation), Ministry Of Transport Malaysia Y. Bhg. Dato’ Jamilah Mohd. Jan, who represented the Honourable YB Minister Of Transport Malaysia.

Others dignitaries present included Resident of Bintulu, Dr Razali Abon, Tuan Hj. Mohidin Bin Ishak, General Manager of Bintulu Development Authority, Heads of Departments from various government agencies and private companies including General Manager of Sabah Ports Authority, Perbadanan Aset Keretapi and representatives from Port Klang Authority and Johor Port Authority.  Welcoming address was delivered by Y. Bhg. Capt. Abdul Rahim Bin Akob, General Manager of Bintulu Port Authority and the keynote address was given by Y. Bhg. Dato’ Jamilah Mohd. Jan, who represented the Honourable YB Minister Of Transport Malaysia.

Historically, Bintulu Port Authority (BPA) began 25 years ago with its establishment on 15^th August 1981 under Bintulu Port Authority Act 1981.  It carried with it the responsibilities covering the development, administration, marketing and provision of adequate and efficient port services.  This is aimed at making Bintulu Port the largest and most efficient transport and distribution centre in the region.  Bintulu Port commenced its operations on 1^st January 1983.  Bintulu Port Authority is a Federal Statutory Body under the Ministry Of Transport Malaysia.

By 1993, the government had decided to corporatise and subsequently in 2001 privatize the port services operation at Bintulu Port under the privatisation Acts 1990.  For the purpose of carrying out port services operation, Bintulu Port Authority had licensed Bintulu Port Sdn. Bhd. a port operating company.  Following the privatisation of Bintulu Port operations in 1993, Bintulu Port Authority was restructed in accordance with its main function as a regulatory body entrusted to oversee all activities at the port including the utilization of port facilities and operations by licensed port operators, owner of port properties, acts as trade facilitator, planning and development of the Port.  Bintulu Port Authority also overseas and ensures the safety and security in port operations at Bintulu Port and within its water limit.

Bintulu Port is the only export gateway for Malaysia’s biggest export earner – liquefied natural gas (LNG) produced from the Central Luconia field, off the Bintulu coast.   Even though LNG is the main commodity handled at Bintulu Port, a variety of general cargo, liquid and dry bulk and containerized cargoes continue to grow in volume.

Throughout twenty five years of existent, Bintulu Port doesn’t seem to slow down and continue to develop.  The Port has enhanced its operational capabilities considerably to provide greater capacity and capability to meet  the needs of the port users.  From merely 4.14 million tons in 1983, now Bintulu Port handles 36.44 million tones of cargo in 2005.  Ships calling at Bintulu Port have grew to 5,789 ship calls in 2005 from only 1,095 ship calls in 1983.  When it first operational, the main cargo (LNG) was recorded at 1.38 million tones which was handled through only one LNG jetty.  Now the cargo continues to grow with a recorded 22.26 million tones of LNG in 2005, handled through its 3 jetties which the latest one was launched officially on 22^nd April 2004 by YB Dato’ Seri Chan Kong Choy, Minister Of Transport Malaysia.  With this development Bintulu Port has become the single largest LNG export terminal in the world with the capacity to handle 23 million tones annually.

On 28^th June 2005, YB Datuk Douglas Uggah Embas, Deputy Ministry Of Transport Malaysia, accompanied by General Manager Captain Abdul Rahim Akob witnessed the handing over ceremony of the 2^nd Inner Basin and Interconnecting Dyke.  The 2^nd Inner Basin will facilitate the port operation especially for ever growing palm oil industry with the oil palm terminal supported by bulking installation located in the area.

Menara Kidurong, the new BPA Corporate Headquarters Building was completed April 2005.  It will play a major role in facilitating the business transaction within the port by becoming the modern one stop centre that will host several government agencies and all major players in the port community, including a fully-equipped Control Tower for overall port surveillance.  The building offers more than 9,000 square meters of rentable office space, a shipping hall, auditorium, cafeteria, exhibition hall and function rooms, basement parking and many other facilities.

BPA commitment to quality was given due recogniction with the accreditation of ISO standard by Independent European Certification (IEC) with the certification of MS ISO9001:1994 in 2001 for “Regulating the operation and handling of LNG at Bintulu Port”.  The objectives were to ensure the quality and safety of LNG operaton at Bintulu Port.  The certification was upgraded to the ISO9001:2000 version on 22^nd December 2003.  BPA was also certified to be compliant to the International Ship & Port Security (ISPS) Code with effect from 1^st July 2004.  This has placed Bintulu Port on an international footing for all foreign vessels to have confidence in Bintulu Port security measures.  It is also a testimony of Bintulu Port commitment to provide a secure and safe environment for all port users and creates a more comprehensive awareness of threats.

On it’s 25^th Anniversary, Bintulu Port Authority has established its indispensable role to ensure the development of maritime trade and port industry in the country and the region.  It plays an important role in the establishment of Bintulu Port as Malaysia’s LNG Gateway and in the establishment of Bintulu as an important logistics and trading hub for this part of the country and region at large.  With vast experience since its inception in 1981, BPA will continue to play its role as the governing body of Bintulu Port, working hand-in-hand with the Port Operator and other agencies to bring Bintulu Port to greater heights and better prepared in meeting future challenges.

This 30 years ago, when Johor Port Authority was established, many were skeptical about its ability to manage and operate a port in Johor, the southern most state in Malaysia. Far less was expected of its abilities to develop the port industry in Johor to the magnitude it is now. Astoundingly, within a short period of time Johor Port Authority baffled all skeptics when it successfully launched Johor Port into the international maritime trading scene. The ships many though would never come began to queue up, sometimes for days.

Beginning modestly, JPA embarked courageously into the port industry on 1 January 1976 when it was established. The odds then, were against JPA’s success. On one hand there was a realization that a port in Johor was needed to service the local industries and to create better terms of trades for local traders who were suffering from the tariffs and costs of exporting via Singapore. However, despite this recognition there was great skepticism in Johor Port’s ability to return enough revenue to justify its establishment. The biggest worry at the time stemmed from the fact that Johor Port was barely an hour’s steaming time from Singapore, at the time, the region’s biggest and most efficient port. However, JPA illustrated its mark of distinction when it boldly decided to let commercial forces shape the future of Johor Port. As a forward looking organization, JPA embarked on an effort to promote industrial development within the Pasir Gudang area where Johor Port was located. This move proved to be rewarding when it created ready revenue for the port when trade was executed thru Johor Port.

JPA also began an aggressive international marketing campaign which was handsomely rewarded. When in 1979 it launched itself into the container business, again, many were surprised and skeptical. Comments ranged from the fact that Johor Port was only a small party to the fact that container industry was still new to the region and the country did not require Johor to service container lines. All was proved wrong when international liners like Titan and Evergreen began landing in Johor.

It was not merely campaigning and marketing that was required to launch Johor Port Into the international maritime scene, in 1984, JPA succeeded in gazetting  Johor Port as a free trade zone hence becoming the first and only port in Malaysia situated within a free trade zone. All these efforts and commitment to top-class service soon led to Johor Port being the biggest fertilizer handling point in Southeast Asia and the largest in the world in handling palm oil exports in the 80s.

Despite the success it displayed within a short period of time, the tremendous challenges faced by JPA never dissipated.

In 1993 and 1995 respectively, the Government had decided to corporatise and subsequently privatize port services operation in Johor Port. This period marked a turning point for JPA’s role. JPA was restructured in accordance with its main functions as a regulatory body while maintaining watch over all port operations and port development ensuring the smooth running of port operations.

Now, JPA’s wings not only spread over Johor Port, situated at the southern tip of Peninsular Malaysia. Since 1999 it also overseas port operations at the Port of Tanjung Pelepas, in the western part of Johor’ and since 1993, it has been responsible for the Tanjong Belungkor and Changi Ferry Terminals. These changes note a considerable increase in responsibility compared to when JPA was solely responsible for the development in Johor Port.

JPA’s responsibility over the Port of Tanjung Pelepas essentially means it is now responsible for regulating port operations located at the confluence of the region’s busiest shipping routes/ The Port of Tanjung Pelepas is expected to be the region’s main container ports in the region and is expected by many to be the ASEAN’s main trading hub. With the Tanjung Belungkor Ferry Terminal JPA has already prepared an extensive strategic plan to further enhance Tanjung Belungkor’s role as the third southern international gateway to the country.

JPA’s commitment and level of quality was given due recognition when it was accredited ISO 9002:1994 by the Llyods Register Quality Assurance on Provision of supervision of handling of dangerous goods/hot work, pilot certification, port security, licensing of support services contractors and licensing of private jetties. The accreditation was successfully upgraded to ISO 9001:2000 in 2003.

On it’s 30^th Anniversary, JPA has established its indispensable role to ensure the development of maritime trade and port industry in the country and the region. It now plays an important role in the establishment of Johor as Malaysia’s Southern Gateway and in the establishment as Johor as the main logistics and trading hub for the last 30 years, Johor Port Authority will continue to forge a remarkable and distinctive history!

By: Johor Port Authority