WESTPORTS Malaysia Sdn Bhd, one of the fastest growing ports in the country, expects slower volume growth next year due to the weakening US and European consumer markets.
Executive director Ruben Emir Gnanalingam said the port did not expect double-digit growth next year as it had recorded in the past. However, the port would achieve the target growth rate of 16.3% or five million 20-ft equivalent units (TEUs)this year.
Year-to-date, the port has handled 4.3 million TEUs.
“Based on our daily average volume of about 13,000 to 14,000 TEUs, we are sure to reach our target by year-end,” he told StarBiz.
Ruben said in the year to August, Westports had achieved faster-than-expected volume growth but that had since slowed down.
“We recorded the highest monthly volume ever in August of about 475,000 TEUs. In September, which is usually slow, we handled 425,000 TEUs and in October we handled 435,000 TEUs,” he added.
“At this time, it’s too early too tell whether the current situation is the normal cyclical downturn or it is the global economic meltdown that has affected trade as there are many other issues that have led to slower volume,” Ruben said.
He said that in the last couple of months there were many typhoon and fog incidents in China, Hong Kong and Taiwan that affected shipping schedule.
“The Middle East ports also experienced some congestion due to inadequate crane drivers,” Ruben said, adding that these factors were not related to the current global economic turmoil.
He said if the slowdown in volume persisted over the next three months, there was a higher likelihood that the industry was not just undergoing a cyclical downturn but was affected by the economic slump.
However, Ruben said, Westports, like other ports in the region that were dependant on Asia-Europe and Asia-Middle East trades, would start to feel the pinch of shaky consumer markets in the US and Europe next year.
“The majority of trade volume depends on China’s export to Europe and that has seen a decline. Shanghai used to pose double-digit annual export growth of about 15% to Europe but now it is posting single-digit growth,” he said.
Ruben said that according to Westports’ customers, intra-Asia trade would still be strong.
“Even our biggest customer, CMA-CGM, which is involved in the Asia-Europe trade, still anticipates growth next year,” he said.
Ruben said Westports was only looking at slower growth and not a decline.
The slower growth in volume would not affect the port’s RM800mil expansion plans. Container terminal five of the port has just been completed, adding a capacity of another 1.2 million TEUs for a total of 7.2 million TEUs.
“Going forward, the construction of container terminal six will be carefully examined based on customer projections of how much capacity is needed,” Ruben said.
He said Westports was also bidding for overseas port management jobs. “We’ve won a contract to manage a port in Kerala, India,” Ruben said.
He said Westports’ Indian partner, a construction firm, would build the port while Westports would come in as port manager.
“Kerala has the prospects to be a successful transhipment hub as it does not have much import and export activities while its strategic location at the tip of India is near the main trade lane. The water depth there is also conducive to container vessels,” Ruben said.
Source: Star Online