Port Klang to be among world's busiest ports in 2016

PORT KLANG: The Port Klang Authority (PKA) is confident of breaking into the Top 10 list of the world’s busiest ports in two years’ time, driven by the expansion of both its terminal operators and, surprisingly, the support of the controversial Port Klang Free Zone (PKFZ) that has taken off quite well.

PKA is a statutory corporation established in 1963 to take over the administration of Port Klang from the Malayan Railway Administration. It is also the owner of the RM12.5bil PKFZ.

Port Klang is currently ranked 12th on the world’s busiest ports list based on last year’s volume of 10.3 million twenty-foot equivalent units (TEUs), which was a 3.5% increase over 2012.

Out of this total, Westports handled 7.5 million TEUs while Northport’s volume stood at 2.9 million TEUs.

PKA general manager Datuk David Padman said Northport and Westports were undertaking capacity expansion at the moment with extra quay length that will attract more ships to berth in a couple of years’.

“We project Port Klang’s volume to increase to 10.8 million TEUs this year and 11.7 million TEUs in 2015. I believe Port Klang will manage to break into the Top 10 list of the world’s busiest ports in 2016.

“However, what I would like to stress is that PKFZ has really taken off, as it has recently been fully taken up and is slowly building itself up as a catalyst to Port Klang’s growth. “About 95% of the 1,000-acre area has been leased to reputable companies. Just recently, we broke into the polymer market with two anchor tenants from the Middle East and Singapore,” Padman told StarBiz.

Despite the controversial court case over the land acquisition deal, Padman did not agree that PKFZ is a white elephant operationally.

PKFZ is an ambitious regional industrial park that offers extensive distribution and manufacturing facilities. It began operations in 2006 with an occupancy rate of less than 30%.

“We are seeing a slow-and-steady contribution from PKFZ towards the volume of Port Klang. It could involve a longer gestation period for PKFZ to really make significant volume impact on Port Klang, but I can assure you that the prospects are huge.

“The prospects of PKFZ are slowly coming to fruition, as we have good multinationals with long-term leases that span from five to 30 years. We have no more land to offer and the remaining 5% is only light industrial units,” he said.

Some of the anchor tenants of PKFZ are Aker Solutions with an RM550mil investment, Cargill Palm Products with RM380mil in investments, and Petroleum Equipment and Supplies Sdn Bhd with RM90mil in investments.

It is also expecting new tenants such as Bright Series with RM230mil in investments and Syarikat Logistik Petikemas that will put RM16.6mil into PKFZ.

Another pressing issue, according to Padman, is the infrastructure, especially road upgrades that are needed to accommodate the growth of the terminals.

“Now that the uncertainty over the P3 alliance has fizzled out, Port Klang is poised for growth. The chart to grow is also clearer now after we lost some volume over the crumbling of STX Pan Ocean and MISC’s container business,” he said.

The formation of the global shipping P3 alliance comprising Maersk Line, Mediterranean Shipping Co and CMA CGM – Europe’s three biggest shipping companies that collectively control close to 50% of the Asia-Europe shipping trade – was supposed to marginally reduce the number of calls by CMA CGM on Westports.

Padman said he would highlight the pressing matter of the infrastructure leading to both Westports and Northport to the new Transport Minister Datuk Seri Liow Tiong Lai soon.

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