Port Klang and Tanjung Pelepas feel the pinch
Llyod’s List - May 29, 2010

MALAYSIA’S ports have been a key part of the country’s development as a maritime nation.

A major exporter and strategically positioned on the Malacca Strait, Malaysia’s ports have enjoyed rapid growth over the last decade.

Both Port Klang and the Port of Tanjung Pelepas are among the top 20 largest container ports worldwide, particularly notable in PTP’s case which had not even started operations 10 years ago.

Without doubt 2009 is going to be a tough year for the ports as they are hit by the same slowdown in traffic that has affected ports throughout the world.

Westports Malaysia, the largest terminal operator in Port Klang, expects to see volumes falling this year with handling only around 4m teu compared to 4.97m teu last year. In the first quarter of 2009, volumes declined 15%-16% year on year.

Westports Malaysia has put on hold expansion plans and is to relook at capital expenditure plans at the end of the year.

Last year the terminal operator invested around RM600m ($171m) increasing its capacity to 7.2m teu annually.

While Westports Malaysia has a greater focus on transhipment, fellow Port Klang terminal operator Northport ismore focused on regional business and Malaysia imports and exports. Last year the terminal handled 3m teu and it also has a major focus on dry and liquid bulk and general cargoes. In the first two months of this year, volumes contracted 15% but inMarch the rate of contraction slowed to around 8%.

Unlike Westports, it is not delaying its expansion plans this year and it has budgeted RM500m for expansion in 2009.

“As things are much less severe domestically, Northport is unlikely to witness a severe fall in container throughput volume — given the cushion from indigenous cargo trade as well as its relatively smaller exposure in transhipment containers compared with neighbouring rival Westports,” says a recent report by OSK Research.

PTP has been a major success story for Malaysia, becoming a major transhipment hub backed by the regional transhipment business of both Maersk and Evergreen Marine.

PTP has been seeing opportunities in the downturn to win over new customers, offering what it believes is competitive pricing. The port, in southwest Johor and close to Singapore, currently has 10 berths and handled 5.6mteu last year and expects to handle a similar volume this year.

Expansion work is continuing, with berths 11 and 12 expected to be completed this year, adding a further 720 m of quay at the port and bringing its annual handling capacity to 10m teu.

In the northeast of the country, Penang port is seeking to boost its status from being a feeder port with investment in dredging its access channel.

Penang Port Commission has applied to the Malaysia ministry of transport for RM350m to deepen the channel.

“If we are able to deepen our channel to about 15 m, we will be able to cater to more main line carriers of 5,000 teu,” PPC chairman

Tan Cheng Liang said last month. At present the channel depth is 9 m to 11 m, meaning the port can handle only feeder vessels of up to about 2,000 teu in capacity.