PTP Sets Aside RM500 Million For Capex In 2016

MMC Corporation Bhd's unit, Pelabuhan Tanjung Pelepas (PTP) Sdn Bhd, has allocated RM500 million in capital expenditure (capex) for 2016 to purchase new equipment and refurbish facilities at the 15-year-old port.

PTP Chief Executive Officer, Glen Hilton, said for next year, the capex would be utilised to purchase prime-movers, rubber-tyred-gantry (RTG) cranes and key cranes.

"We want to increase the port's twenty-foot equivalent units (TEUs) to 15 million in 2018 from 8.3 million TEUs as of November this year.

"This is in line with the growing transshipment industry, particularly in Southeast Asia. These equipment are expected to be delivered to us in the third quarter of next year," he told reporters during a media visit to PTP today.

He said the intra-Asia sailing frequency per week stood at above 45 times, followed by Africa (13 times) and Europe or Mediterranean (11 times).

When asked on the impact of ringgit fluctuations on the purchase of new equipment, Hilton said the current foreign exchange volatility has impacted the company as the acquisition of new cranes are transacted in US dollar.

It is estimated that the cost per crane is US$10 million.

This year, PTP spent RM300 million to purchase new equipment and facilities including 26 RTG cranes in addition to the existing 174 RTGs.

Meanwhile, on PTP's 607.03-hectare free trade zone, Hilton said the port was considering new land purchase or leveraging on MMC's landbank to grow its business.

"There's certainly a demand for free trade zone and this will be intensified through business relocation or starting up (start up companies)," he said, adding the port was in discussions with several companies to build and develop the land.

There are 40 manufacturing and logistics companies operating in the area with total investment of RM2.6 billion.

As of 2014, the port had achieved 8.5 million TEUs and it is expected to reach 9.2 million TEUs by year-end.

Its alliances with two international shipping companies, Maersk-Line and Mediterranean Shipping Company had contributed more than 50 per cent to the total TEU volume.

Maersk-Line is the sister company of APM Terminals, which in turn hold 30 per cent stake in the PTP.

PTP, ranked 18th best port in the world, is the direct rival to Port of Singapore Authority which currently holds the number two spot in the rankings.