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 "Port operators see volume growth"

(THE STAR - MARITIME 4th Jan 2010)

PETALING JAYA: The country’s major port operators are optimistic of registering volume growth this year as volume has been picking up since the third quarter of last year, reflecting green shoots of economic recovery.

This is after cargo volume at most ports dipped significantly year-on-year in the first half of last year due to the global economic downturn.

Northport (M) Bhd managing director and chief executive officer Datuk Basheer Hassan Abdul Kader said it expected to register volume growth this year as intra-Asian cargo had been picking up since the third quarter last year.

But this is barring any unexpected development that may hinder the projection.

Container volume at Northport had decreased by 15% and 12.2% in the first and second quarters last year respectively year-on-year.

In the third quarter of last year, the volume had shown improvement with only a 3% fall while the fourth quarter registered growth of 9.5%.

“About 70% of our business is from handling intra-Asian cargo which has shown positive signals lately.

“In fact, the volume growth in the second half of last year was mainly from intra-Asia cargo,” he told StarBiz.

Basheer said the port had last week reached 2.84 million twenty-foot equivalent units (TEUs) that was already above the expectation for 2009.

Northport registered about three million TEUs in 2008.

Going forward this year, he said, Northport would continue to invest in equipment such as rubber-tyred gantry and prime movers and to continually improve its efficiency.

Northport currently has the capacity to handle about five million TEUs annually.

Westports Malaysia Sdn Bhd executive chairman Tan Sri G. Gnanalingam expected its terminal to handle five million TEUs this year from 4.5 million TEUs last year.

Westports, also a major port in Port Klang, handled about 4.97 million TEUs in 2008.

“The volume at Westports had been growing year-on-year since the third quarter of last year and it reflected the recovery of the Malaysian economy in the manufacturing sector,” he said.

The country’s major transhipment terminal, Port of Tanjung Pelepas (PTP), has forecast double-digit volume growth this year in line with more favourable economic conditions.

“We are optimistic of 2010. The recovery of the world’s economy will benefit transhipment ports like PTP as it has the capacity to do so,” said chief executive officer Capt Ismail Hashim.

“We also anticipate that the pace of a sustainable global economic recovery will gather its momentum in the second half of this year.”

He added that PTP, which handled about 5.6 million TEUs in 2008, also expected to register volume growth in 2009.

“PTP expects 2009’s volume to be more than 5.6 million TEUs. This is due to some restructuring by the existing customers (shipping lines) in their route pattern which resulted in them transhipping more containers at PTP.

“Also, we have signed a new main line operator (CMA-CGM) in mid-2009 which contributed to the additional volume at PTP,” he said.

But, he added, the economic downturn was expected to continue impacting the shipping lines although signs of recovery had seemed to emerge.

“PTP sees this as an opportunity as many shipping lines would be looking at cost savings of which PTP is in position to offer through its competitive pricing and excellent port productivity,” he said.

Capt Ismail has retired as the CEO of PTP effective Dec 31, 2009. However, he was still holding the position at the time of writing. His duties is now carried out by deputy chief executive officer Azlan Shahrim until a new CEO is appointed.

Sabah Ports, a subsidiary of Suria Capital Holdings Bhd that manages about eight ports in the state, has projected an overall 1% increase in total cargo throughput, inclusive of wharf containers, non-containerised and mid-stream cargo, this year.

Suria Capital group managing director Datuk Dr Mohd Fowzi Mohd Razi said the wharf volume was expected to increase by 9% and containers by 8%.

“However, the overall growth would be somewhat offset by the expected decrease in volume at mid-stream due to the declining timber trade and thereby pull the overall increase to a marginal increase of only 1%,” he said, adding that the port business would continue to contribute a steady stream of earnings for the Suria Capital group.

Sabah Ports had estimated to record a 5% decrease in TEUs for last year against 2008’s 279,500 TEUs. For non-containerised cargo, it projected a 12% decrease to 22.3 million tonnes in 2009.

“But, there had been good growth in the fourth quarter 2009, indicating that the Malaysian economy and, in particular, Sabah has entered a recovery phase,” he said.

On expansion this year, Mohd Fowzi said the major capital expenditure in the ports would comprise the purchase of two gantry cranes for the Sapangar Bay Container Port (SPCP) costing about RM43mil and the investment in a new Sapangar Bay oil storage and depot of about RM32mil.

“With the new gantry cranes, we hope to entice some main line operators to call at SPCP and therefore enabling us to do more transhipment business,” he said.

“The new Sapangar Bay oil storage and depot is expected to generate more liquid cargo throughput and therefore earnings for the port business and the group,” he said.