Sailing Ahead Of Competition

There is a hive of activities at the Pelabuhan Tanjung Pelepas (PTP) of late and rightfully so as the port is embarking on ambitious expansion plans. Gearing for growth, the port is building four additional berths expanding its container yard and completing an electrical substation.

With much room for growth, PTP’s capital expenditure in the next few years is expected to be between RM2 billion and RM3 billion, but this depends on overall economic conditions in the years ahead.

The construction of two of its four additional berths, namely berths 11 and 12 had begun in the first quarter this year and is expected to cost RM280 million. The additional two million 20-ft equivalent units (TEUs) to PTP’s annual terminal handling capacity, raising it to 10million TEUs.

According to Harun Hj Johari, chief executive officer of PTP, the expansion of its container yard will include setting up additional container yards. Further more, the anticipated completion of the port’s 132kV electrical substation in October this year at a cost of RM40 million is likely to improve the company’s needs for a dependable electrical power supply for more seamless port operations.

Says Harun: “This year, we expect to receive delivery of more than RM480 million worth of additional port equipment which comprises twin-lift quay cranes, double hoist quay cranes and rubber tyre grantry (RTG) cranes.”

It is interesting to note that during the early days, PTP was ranked 148th in the world among global ports. This was in the year 2000, and since then the port has swiftly moved up the ranks in the last eight years and it’s today ranked 17th amongst the world’s busiest and well run ports.

Attractive Port

PTP has stayed true to its focus on attracting more shipping lines to call on the port. This has been a daunting task, as Harun explains that the process to sign up shipping lines is not easy, nor does it happen overnight.

He adds that it is vital that the port first wins over the new customers through trust and building professional relationships with the shipping lines. One of the value propositions that PTP provides to shipping lines is a customised product menu to suit their needs.

Says Harun: “For us, a deal is not just a deal, as we want the shipping lines to grow together with PTP. The current initiatives, strategies and expansion plans indicate that we are on track in achieving our objectives to attract more shipping lines.”

He is upbeat about prospects for ports going forward, as PTP in particular has enjoyed robust growth over the years. In fact, it has managed to attain double-digit growth every year since it commenced operations.

Another feather in its cap is the fact that the Pelepas Free Trade Zone has been a hit. Thus far, the port has managed to attract more than 50 global companies who are currently already operating within the free zone. It has spent and estimated RM550 million in the first and second phases to develop the Pelepas Free Trade Zone. This area has successfully garnered some RM3 billion worth of foreign direct investments (FDIs) to the state of Johor.

To date, PTP has successfully developed and leased out most of the free zone land under phase I and phase II of the Port Masterplan.

Challenges ahead

Successes aside, rising fuel costs may throw a spanner in the works. To this, Harun stresses that in the wake of rising fuel costs, shipping companies will likely revamp their network of services and ship deployment to be more cost effective and efficient. Understandably, there will also be an increase in freighting cost.

On another note, he points out that logistics has been earmarked as one of the six pillars to drive the Iskandar Development Region (IDR) forward. As IDR develops and progresses, more business activities are likely to take place within the IDR, leading to PTP having a critical role as a gateway port.

With the IDR flourishing with various business activities, this will likely provide PTP with the hit to expand its share of local cargo, as more manufacturers set up bases in Johor in addition to the existing hinterland cargo.

“As an mega port with the scalability for future expansion to fulfil capacity demands and supported by investments in state-of-the art port equipment and facilities to provide best-in-class port services, IDR investors can efficiently import in their raw materials or export out their finished goods through PTP. As such, PTP is being positioned as the international gateway for the IRD,” says Harun.