Wednesday, October 22, 2008

More shipping lines to switch to Malaysia within the next decade

KUALA LUMPUR: More shipping lines are expected to switch hubs to Malaysia within the next five to 10 years, drawn by Malaysian ports’ attractive pricing and capability in handling cargo volumes.

Westports Malaysia Sdn Bhd director Ruben Emir Gnanalingam told The Edge Financial Daily that while Singapore has more shipping line hubs currently, the island state had limited capacity and prices in Malaysia were still substantially cheaper.

Singapore is also currently the largest handler of trans-shipment cargo volume in the Southeast Asian region, doing 28 million twenty-foot equivalent units (TEUs) of the 50 million in Southeast Asia while Malaysia does 15 million TEUs. Of the 15 million TEUs, Westports is aiming for five million TEUs this year, Ruben said.

Asked if he saw strong competition from other Southeast Asian countries, Ruben said that there was little threat. “The three main ports for trans-shipment cargo currently are Westports, the Port of Tanjung Pelepas and Singapore. We don’t foresee any particular new threat and there are no new ports being built in the region for some time yet.”

He added that trans-shipment cargo volume in the Southeast Asian region was growing between 10% and 15% a year with an estimated 55 million TEUs in 2008.

“The market is growing fast and there is a lot of room for growth, we can all grow together,” he said.

Earlier, Ruben told reporters that Westports expected its new 600-metre berth to be fully operational by the fourth quarter of this year.

The berth is part of CT5; a new container terminal Westports is constructing as part of its RM800 million three-year expansion plan to boost annual capacity by some 30%. The ports operator breached the four million TEU mark in 2007.

He was speaking after the announcement of Westports’ RM800 million-sukuk musyarakah medium term notes programme to finance its RM800 million expansion plan.

The sukuk will be utilised to refinance Westports’ existing bank borrowings, to finance the construction of new container terminals and acquiring machinery and equipment. The first issuance, targeted for mid-March, will be based on a book build basis.

Source : Edge Daily

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