Transhipment cargo rise drives Malaysia port development

12 May 2008
Transhipment cargo rise drives Malaysia port development
By Huang Seeda
Kuala Lumpur
www.cargonewsasia.com

Despite strong competition, Malaysian ports, driven by strong growth in container transhipment traffic, are continuing to expand. Transhipment accounts for about 50 per- cent of Malaysian ports' total container trade.

At the southern tip of Peninsular Malaysia, the Port of Tanjung Pelepas (PTP) in Johor - the country's largest container port with a throughput of 5.4 million TEUs last year, up 14.5 percent over 2006 - is adding four berths to the existing 10, which will enable it to handle 12 million TEUs by 2011. Construction works for berth 11 and 12 will begin soon and are expected to be completed by the second quarter of next year while building of berths 13 and 14 will begin next year and be completed by the first quarter of 2010.PTP chairman Mohd Shaik Osman said: "The total cost of the expansion plan, which will also involve the construction of container yards and installation of equipment, will be about US$126.9 million."

PTP expects to see a surge of throughput this year with the port's recent signing of an agreement with Malaysia's top shipping company, MISC, for the setting up of a joint venture company so MISC vessels can use the port. PTP will hold a 70 percent stake in the venture and MISC the balance. MISC will become the third major shipping line to use PTP as their hub in the region following Maersk and Evergreen's move to PTP in 2000 and 2002 respectively. MISC said that the agreement would benefit the shipping company greatly.

"Besides being within Iskandar Malaysia, which promises a growing hinterland cargo, PTP is also strategically located at the confluence of the world's shipping lanes; and this is a crucial factor for our transhipment operations.''PTP chief executive officer, Harun Johari, said that the deal would contribute towards PTP's rapid growth and enhance the port's connectivity by at least 20 percent.

In central Malaysia, Port Klang, in the state of Selangor, comprises Westports and Northport. The two ports together handled a combined container throughput of 7.2 million TEUs in 2007, compared with 6.3 million TEUs a year earlier. But taken individually, PTP remains the top port, with Westports handling 4.34 milllion TEUs in 2007, a growth of 18 percent, and Northport 2.86 million TEUs, up 7.5 percent on 2006. The two Klang Valley ports were planning to merge but so far no decision has been reached. Westports executive director Ruben Emir Gnanalingam said: "Westports continues to show strong growth in throughput and we expect to become a five-million TEU port by year-end." Westports handled a record 1.16 million TEUs in the first quarter of this year, up 19 percent year-on-year. Transhipment business reached 730,101 TEUs, a 13.6 percent year-on-year growth. Westports has embarked on a $253.86 million three-year expansion plan which includes construction of two additional berths to beef up annual capacity by 30 percent from the existing six million TEUs to eight million TEUs. The new berths will be able to accommodate 13,400 TEU vessels.Northport posted a strong 17 percent growth in the first quarter of this year to 730,452 TEUs compared with a year ago.Northport managing director and chief executive officer Basheer Hassan Abdul Kader said: "We are confident the growth will be sustained since we are also witnessing a surge in regional transhipment. New feeder networks are also contributing towards more transhipment." Northport has allocated $185.64 million for a three-year expansion, which includes the re-development of a multi-purpose berth into a dedicated container terminal.

On the eastern seaboard of Peninsular Malaysia, Kuantan Port handled 127,600 TEUs in 2007, up two percent over 2006. In January and February, the port recorded a throughput of 22,009 TEUs, up 13.49 percent over the same period last year.Kuantan's goal is to transform itself into a megaport with the building of container berths with a 14 km quayline and draught of 18m as well as constructing a 120 hectares container yard, said managing director Wong Soon Fah of port operator Kuantan Port Consortium.

Penang Port, which operates a 900m container terminal handled 926,000 TEUs last year, up nine percent over 2006. The port aims to handle over one million TEUs this year.

In East Malaysia, Sabah container ports, comprising facilities at Tawau, Kota Kinabalu and Sandakan, handled a total 268,000 TEUs in 2007.