This is influenced by the fact that in addition to its geo-economic advantage, the strategically located port, which expects to handle about two million TEUs this year, has the largest prime land any port in Asia could offer for commercial and industrial activities to be carried out in a port vicinity.

 

The promising distributive trade at the port will have a catalytic effect of not only generating more container volumes for the port as it advances into Phase Two of its development but will also create tremendous economic linkages in the developing south-western economic corridor in Johor.

 

The potential for the port is even greater since the new economic corridor, which can be accessed from and to Singapore via the Second Link as well as expressways connecting to the national grid (and soon a rail link that is nearing completion), is now being viewed as the peninsular’s next engine of growth.

 

The development of the First Phase of distripark at the port has hit a high note. The area consists of 423 acres of Greenfield located behind PTP’s container yard. The distripark, which as been designated as a Customs Free Zone, has all the basic infrastructure, namely, the provision for electricity, water, roads and telecommunications facilities. PTP also provides built-up warehouses for lease and bare land for sub-lease.

 

The development of the area has been divided into several phases with the Free Zone at the distirpark being available for occupation since early 2001. The zone allows commercial activities to be carried out under a Customs free environment, including deferment of duty on foreign goods until departure from zone and elimination of duty on re-exported merchandise. Users are also exempted from import licenses for activities within the free zone.

 

The next phase in the development of the distripark will focus on the Free Industrial will focus on the Free Industrial Zone, which will offer prime industrial land for industries. This is expected to focus on export-oriented industries and those which may require proximity to the port because of the need to import large quantities of raw materials.

 

According to PTP’s Chief Operating Officer Mohd Sidik Shaik Osman, the development of the Free Industrial Zone will coincide with the Phase Two development of the port.

 

The port is now evaluating the development of Phase Two, which will double the port’s capacity of 4.5 million TEUs when Phase One is fully completed some time next year with the delivery of the remaining 24 shoreside gantry cranes. At present, the port has a fleet of 14 gantry cranes (which offer 18 boxes outreach across the beam of the vessel), and last month, it purchased five super post panamax cranes and ordered another five of the same (which offers an outreach of 22 boxes across the beam) for delivery next year.

 

The Fee Zone at the distripark has attracted some large distribution companies, including Pelepas Logistics Sdn Bhd, which has two warehouses 10,000 sqm each to focus on transshipment cargo where activities are centred on value-adding, consolidation.

 

Kenwood Logistics Sdn Bhd, a major player, started operations in July and is operating from a 150,000-sqm global distribution center and international procurement center for Kenwood’s electrical products. Tiong Nam Transport Bhd. a large overland trucking company has taken up a 12,000-sqm free commercial zone warehouse while Hewlett Packard is an anchor tenant operating a regional distribution center.

 

Malaysian Industrial Estate Limited is currently building its own warehouse and is also expected to look for joint venture partners for warehouse operations. One such company it has been in touch with is Tebrau Dynamic Logistics Sdn Bhd. Sidik says discussions are also ongoing with several local players which are targeting LCL (less-than-container-load) market form Johor. ‘In less than six months, we have seen major anchor tenants operating from the distripark. The ongoing focus now is to tap the strength of small and medium players, both local and regional,’ he tells Malaysian Business.

 

Singapore-based companies engaged in distribution and logistics are good prospects since relocation to PTP offers lower operational costs, including considerable cheaper storage and warehousing and manpower costs. The dismantling of trade (and Customs) barriers after the implementation of the Asean Free Trade Area also offers distribution companies a borderless environment to operate in a more competitive location.

 

Currently, a variety of cargo moves in and out of the distripark at PTP, with the largest consisting of electronic goods and garment/textile products. With the region facing the possible relocation of large manufacturing-base industries to emerging markets, PTP expects more to come in to the southwest Johor industrial region. ‘With PTP’s wide and comprehensive network, a distribution and logistics hub is a answer. Our close proximity to Singapore by road is a definite advantage as well,’ says Sidik.

 

He says the companies in the Free Zone are focusing on regional distribution, including stuffing/unstuffing and repacking but ‘we have new players who are talking to PTP to target the local market’.

 

A drawback at the movement is the lack of choice in shipping lines for the port users although a good spread of worldwide ports from PTP is available from the network of shipping services provided by the Maersk-Sealand shipping line. Maersk Sealand, which has taken up a 30 per cent stake in PTP, accounts for more than 90 per cent of the trade at the port.

 

PTP is making efforts to lure other shipping lines, especially from Taiwan and Japan, to meet the requirements of the port users. ‘With capacity at the terminal being increased with 10 additional quay cranes, and Phase Two construction being planned, we are confident of attracting other lines,’ Sidik adds.

 

PTP also created history by attracting cargo from Singapore to be exported and imported through it. Following its representations to the Government, levies for laden movements of lorries from Singapore have been abolished and green lanes to hasten the clearance of cargo have been established at the Second link Malaysia-Singapore. ‘Out long-term target here is that lines calling PTP will be able to widen their hinterland base not only to Johor and the central region but also to Singapore. This place PTP in an excellent position to be Southeast Asia’s leading transshipment hub,’ Sidik continues.

 

While Phase One of the port’s distripark development is expected to be filled with activities centering on consolidation, international procurement centers and regional distribution centers, Phase Two’s development, covering an additional 600 acres of land, has also been reserved for industrial activities. With so much going on, PTP is poised to be more that just a port.