MMC Corp port unit plans to raise RM1.9 billion sukuk

Pelabuhan Tanjung Pelepas Sdn Bhd (PTP) is the top 20 busiest ports in the world according to Malaysian Rating Corp Bhd. NSTP/FILEPIX

KUALA LUMPUR: Pelabuhan Tanjung Pelepas Sdn Bhd (PTP), a unit of MMC Corp Bhd, is planning to raise RM1.9 billion from a sukuk issuance this year.

It is understood that the RM1.9 billion was to help PTP refinance the upcoming maturity of its RM1.5 billion Islamic medium-term notes programme.

The RM1.5 billion was taken to fund the port’s capacity expansion.

PTP, is a 70:30 joint venture between MMC and APM Terminals, a leading global ports group with a port network in 69 countries.

The port was developed from green field where it was previously a small fishing village at Tanjung Pelepas in Gelang Patah on the western part of Johor.

It has since grown into one of MMC group’s crown jewels in the latter’s expansive ports and logistic businesses.

PTP was the top 20 busiest ports in the world, Malaysian Rating Corp Bhd said recently.

The port has been giving neighbouring Singapore a run for its money as a leading regional port since its opening about 20 years ago.

Analysts said MMC-owned ports had handled a combined 14.3 million twenty-foot equivalent unit (TEUs) last year and about 55 per cent of Malaysia’s total container volume in the first half of last year with 7.1 million TEUs.

Container throughput at PTP particularly grew 1.3 per cent last year.

This had in fact contributed more than 70 per cent to the absolute net growth in the group’s container throughput in 2019, MIDF Research wrote recently.

Industry observers said PTP was strategically important as a pivotal trade gateway in southern Malaysia.

The port’s established track record in providing container and conventional cargo handling services had enabled it to generate steady cash flow.

They said MMC’s strategic partnership with Maersk, one of the world’s biggest container carriers, had effectively given PTP the first right of refusal to handle cargoes of Maersk and the 2M Alliance, a shipping alliance comprising Maersk and Mediterranean Shipping Company (MSC).

MMC told an analysts’ briefing recently that Maersk, its customer-cum-shareholder via unit APM Terminals, had been satisfied with PTP’s operational capabilities which could translate to a further increase in volume in the future.

PTP has become Maersk’s global hub, connecting the shipping giant to more than 300 ports worldwide, as well as container services and transshipment hubs for many other shipping lines.

Hence, the port is very important to Malaysia and the global chain.

PTP also boasts a free zone that offers lower costs and can attract more companies to shift from Singapore particularly.

The free zone is currently home to more than 40 international and local companies, including the eight warehouse owners such as DHL, Panalpina, Damco, Century and Pan Asia Logistics.

It also houses regional distribution centres for Volkswagen, Decathlon, Coles, Target, Nike, Adidas and Steinhoff, among others.

PTP also provides marine facilities for all vessel traffic going through its waterfront limit, including tugboat services, pilotage services and ship to ship services.

To date, PTP has handled 122,000 vessel calls since 2000 and operates its marine services with nine unit of tugboats, three unit of pilot boats and with 45 internationally qualified pilots.

Industry observers said strategic partnerships established with 2M Alliance and Ocean Alliance had boosted PTP’s business growth and existing relationships.

Overall, PTP saw volume growth for transhipment and local cargo with 9.1 million TEUs of volumes handled last year.