Tuesday, May 25, 2010

Malaysian tanker, bulk carrier collide in Singapore Strait Read more: Malaysian tanker, bulk carrier collide in Singapore Strait http://www.nst.com.m

A Malaysian-registered tanker, MT Bunga Kelana 3, collided with a bulk carrier in the Singapore Strait about 13km southeast of Changi East this morning.

The Maritime and Port Authority of Singapore (MPA) said the tanker collided with a St Vincents and The Grenadines-registered bulk carrier, MV Waily, in the traffic separation scheme (TSS) in the strait at about 6.10am.

In a statement, the MPA said there was no report of injury to crew members but the tanker suffered damage to one of its cargo tanks, resulting in an oil spill.

The master of the tanker estimated that 2,000 tonnes of crude oil could have spilled into the sea.

Both vessels are currently anchored in the Singapore Strait, with the MV Waily currently about 11 km southeast of Changi East and the MT Bunga Kelana 3 about 7km south of Changi East.

The MPA Port Operations Control Centre had issued navigational broadcasts to ships transiting the TSS to keep clear of the anchored vessels.

Traffic in the TSS remains unaffected.

Te MPA had also activated oil spill response companies, which had deployed three craft with oil spill equipment.

Work is ongoing to contain and clean up the oil spill.

The MPA had also informed the Malaysian and Indonesian authorities of the incident, the statement added.

Source: NST

Tuesday, May 18, 2010

MISC buys stake in VTTI for RM2.36bil

MISC Bhd has proposed to buy a 50% stake in global tank terminal firm VTTI BV for US$735mil (RM2.36bil) in a move that will give the home-grown shipping giant immediate access to strategically located assets at the “crossroads of major products and energy shipping lanes of the world,” the company said.

“The acquisition of 50% interest in VTTI is a key element in developing the company's global tank terminal business, in line with MISC's strategy to expand its service offerings across the value chain,” president and chief executive officer Amir Hamzah Azizan said in the statement yesterday.

VTTI owns and operates a network of petroleum product terminals in 11 countries with a gross combined capacity of nearly six million cu m.

This gross combined capacity is set to expand to nearly seven million cu m by 2013.

Its major terminals are located in Amsterdam and Rotterdam in the Netherlands, Fujairah in the United Arab Emirates and Port Canaveral in the US.

An aerial view of VTTI's tank terminal assets

VTTI is a wholly-owned unit of Netherland-based Vitol Group, one of the largest independent energy trading companies in the world.

MISC said the tank terminal business was an “attractive investment that will provide stable returns”.

The company's participation in the business would give it the edge over traditional shipping competitors through marketing opportunities and cross selling in both business segments.

“Upon completion of this sale and purchase transaction, MISC and Vitol will enter into a shareholder agreement to reflect the long-term relationship and strategic cooperation between MISC and Vitol in relation to their interest in VTTI,” the statement said.

MISC owns and operates more than 100 vessels, and is the leading energy transporter in the world in the liquefied natural gas, petroleum and chemical industry.

MISC and Vitol first entered into a partnership last year when the two companies started a joint venture to build and operate an oil blending terminal in Tanjung Bin, Johor. The 841,000 cu m oil blending terminal was scheduled to commence operation in 2012.

With the acquisition of the 50% stake in VTTI, the joint venture deal will be terminated and MISC's shares in the Tanjung Bin joint venture called Asia Tank Terminal Ltd will be sold to VTTI Tanjung Bin SA at cost.

The sale and purchase agreement to acquire the 50% stake in VTTI was signed yesterday in Kuala Lumpur.

MISC was represented by Amir Hamzah, while Vitol was represented by its president and CEO Ian Taylor.

Source: StarBiz

Wednesday, May 12, 2010

Penang Port will be staying put

There was never any plan to relocate the Penang Port nor has it been discussed in any Penang Port Commission (PPC) planning committee or board meeting, said its chairman Tan Cheng Liang.

Stressing that the suggestion to move the port had only been a proposal during a recent PPC dialogue, she reassured port users and investors that the port was set to stay in Penang.

“Moving a port is not like moving house. The downstream-related industries and operations will all be affected.

“Because of Penang’s airport and seaport, we have attracted a lot of investors and the manufacturing players, industrial players, multi-national companies and logistics suppliers are all here,” Tan said at a press conference at Bangunan Sri Weld yesterday.

“The chain of industry has been here so long. How are we going to move them? That is not economically viable.”

Tan said large amounts of funds had already been committed to upgrading the Penang Port, including RM1.1bil to further develop it to a main line port under port operator Penang Port Sdn Bhd’s 2007-2012 business plan.

She added that about RM300mil had been dedicated to re-develop the Prai Wharf while another RM62mil had been spent to complete the Penang International Cruise Terminal.

She said the 224-year-old port was an important part of the Northern Corridor Economic Region as Penang was a logistics hub and would play an even bigger role once the Ipoh-Padang Besar railway double-tracking project was completed at the end of 2013.

She said the proposal of relocating the port was brought up by the Penang Chinese Chamber of Commerce in a written question at a PPC dialogue with port users last Thursday.

“They are concerned that the North Channel is subjected to heavy siltation and that capital dredging is continually required to maintain the needed draft. Their question was also taken up by the Penang Freight Forwarders Association during the dialogue.

“Everyone has a right to ask questions and air their opinions but Transport Minister (Datuk Seri Ong Tee Keat) never made any statement that the port would move,” Tan said.

She added that the Federal Government had put capital dredging in the North Channel as a top priority under the 10th Malaysia Plan where the draft would be increased to 14.5m to accommodate larger ships at the port.

PPC currently spends RM30mil in maintenance dredging every year to keep the draft at 9m to 11m while RM350mil in capital dredging is needed every 10 years, Tan said.

Source: Star Property

Sunday, May 9, 2010

Is relocation of Penang Port the right call?

There has been more than one instance in the past decade, when the issue of relocating the Penang International Airport on Penang island to less "strategic" locations was raised.

And each time the matter was brought up by either politicians or businessmen, very strong reactions to the subject have followed, since it appears that not very strong cases have been put forward when arguments were made for the proposed relocation.

In the usual policy statement issues to test the waters, followed by a chain of statements from affected stakeholders arguing why the move should not take place, to letting the argument simply die a natural death, Penang residents can safely say "been there, seen it and done that".

Each time the matter of relocating or closing the international airport came up, it appeared that the economic sense to such a plan had not been fully evaluated, particularly the impact it would have on the manufacturing and tourism sectors, Penang's major revenue earners.

Fast forward to 2010 and all eyes are now trained on Malaysia's oldest port, Penang Port.

The announcement by Transport Minister Datuk Seri Ong Tee Keat last week that the 224-year-old port, which was set up by Captain Francis Light, may be moved to a more "suitable" location to cater to future expansion plans has raised some eyebrows.

Ong was quoted as saying that suggestions for this move came from port users. This statement was backed up by a representative of the freight forwarding industry in Penang by saying that "anywhere in the northern part of Malaysia should be acceptable".

No mention was made on whether all those involved in the running and using of the port have been consulted and whether all parties think this is a good move.

Also silent was the role which is supposed to be played by the port as the logistics centre of the Northern Corridor Economic Region.

It also did not appear as if the tourism sector has been consulted on the possible move to relocate the port, which in the past year, has seen increased activity in the form of multiple economic spinoffs to the state.

The question being asked now is: Is the move to relocate the port simply a knee-jerk reaction to some dissatisfaction by certain quarters over less than satisfactory services experienced at the port, or have some serious discussions, feasibility studies and alternative sites identified before this, before the statement was issued?

When Penang island lost its free-trade port status in the 60s, many residents of the island state, whose livelihoods depended solely on the port status had to "shift gears" and make rapid adjustments.

It was a very painful time for those who waited with bated breath and hoped that the policy would be reviewed.

This was prior to the revocation of the duty-free status, Penang had thrived on its barter trade with Medan and Singapore, while attracting a fair share of tourists and bargain shoppers.

The economic fortunes of the state took a turn for the better when Penang began enjoying the boon from domestic and foreign investments, earning itself the title "Silicon of the East".

Many of Penang's investors - which comprise some of the world's top multinational corporations - are still here today, because of the many facilities offered to them such as skilled labour and infrastructure like the airport and port.

Also to be considered is the fact that Penang's position as a preferred port of call for luxury cruise liners has only been restored this year with the opening of the RM62.9 million Swettenham Pier.

The busload of tourists being shuttled to eateries, hotels and other attractions on the island cannot be missed on days that the big ships drop anchor or berth at the port.

The issue of repeated dredging, which is needed at the port to accommodate all types of vessels, is one which should have been addressed and made provisions for a long time ago.

All hopes are now being placed on the federal government to follow through with Deputy Prime Minister Tan Sri Muhyddin Yassin's pledge in April for a financial allocation for a proposed dredging scheme of the Penang channel in the upcoming 10th Malaysia Plan.

The RM322 million project was shelved under the Ninth Malaysia Plan mid-term review.

Terminal operator Penang Port Sdn Bhd has been targeting to develop Penang Port into a premier port by 2012 if the deepening of the north channel proceeded.

It is hoped that the fortunes of the state can then come full circle in anchoring itself back on its waterways, which once helped boost its fortunes and fame.

Northport expects further volume increase

Northport (Malaysia) Bhd, which recorded a 26% jump in volume for the first quarter of this year against the same period last year, is positive of a further uptrend in its business.

For the first three months of this year, Northport’s volume hit 779, 867 twenty-foot equivalents (TEUs).

Northport managing director Datuk Basheer Hassan Abdul Kader said the port recorded a 30% growth in transhipment containers, which reflected a strong resurgence in regional economies.

“We are confident of a sustainable growth in container volume at Northport, based on a positive forecast of the country’s economy and also on recovery trends in the shipping market,” he said in a statement.

Basheer added that recent developments in the fleet deployment of shipping lines – which included restoration of suspended services, injection of additional ships and changes in their service strings – mirrored the renewed confidence in the shipping markets.

“Based on these demands, Northport aims to chart a cargo volume increase of between 10% and 15% for this year against that of last year.

“The positive forecast is also applicable to our non-containerised cargo business that recorded a 40% growth in the first quarter of this year compared with a year ago,” he said.

Source: StarBiz

Thursday, May 6, 2010

MISC’s pre-tax profit down 40pc to RM933m

MISC Bhd announced a 40 per cent lower pre-tax profit of RM933.1 million for the financial year ended March 31, 2010 compared with a pre-tax profit of RM1.556 billion last year.

The reduction in profits was mainly due to higher losses in the liner and chemical businesses and reduced profits in the petroleum segment, MISC said in a statement today.

Revenue was at RM13.775 billion against a revenue of RM15.783 billion in the previous financial year.

MISC also said the rights issue exercise completed in February, with the issuance of 744.0 million new shares, has led to a drop in net tangible asset (NTA) per share from RM5.54 at the end of the previous financial year to RM5.17 as at March 31, 2010.

Meanwhile, the higher group cash balances from the rights issue proceeds have led to a reduction in net debt equity ratio to 0.2:1 during the year reviewed compared with 0.38:1 the previous year.

MISC has recommended a final dividend of 20 sen per share tax exempt.

The company said it expected better performance ahead with the containment of losses of its liner business.

Additionally, expansion of its heavy engineering business and its offshore business are expected to contribute positively to the group’s performance.

Source: Malaysian Insider

Tuesday, May 4, 2010

Sabah re-ignites cabotage policy row

The Federation of Sabah Manufacturers (FSM) wants Sabah to be made the hub port for the Far East, much like what Dubai is to the Middle East.

However, the FSM sees the National Cabotage Policy (NCP) as an impediment since this designates Port Klang as the National Load Centre at the expense of Sabah and the nation.

“Sabah has all the necessary ingredients to be the hub port for the Far East,” said FSM president Wong Khen Thau in pitching for the state.

“It is the centre of this region, within five to six hours flight to all major Asian capital cities."

Sabah is also central to the large populations of India, Indonesia and China besides being in the right location vis-à-vis Tokyo, Seoul and Sydney.”

Wong was lamenting the failure of the partial liberalisation of the NCP since May last year.

The failure has been attributed to the limited scope of the liberalisation, which only allows direct carriage of containerised trans-shipment cargo to Sabah and Sarawak by foreign vessels without the need for a domestic shipping licence.

Wong noted that Deputy International Trade and Industry Minister Jacob Dungau Sagan's admission in recent days that the liberalisation has had little impact is a good reason for doing away with the NCP.

Wong, taking up the cudgels again, pointed out that 70 percent of Malaysia's imports come from China, Japan, Korea and other countries that are in close proximity to Sabah.

port klang 260209 01
This, he argued, gives Sabah an advantage over Port Klang as the natural hub for the country.

“Sabah can also present a better alternative and challenge to Singapore than Port Klang or Tanjung Pelepas in Johor,” he claimed.

He also said the state could make the quantum leap in per capita income if the hub port is located in Sabah.

The FSM has estimated a minimum US$15,000 in per capita income for Sabah by 2020, a huge improvement from the current US$3,000-4,000.

'Pump in funds'

FSM is calling for the federal government to pump in the necessary funds to build up the state's infrastructure in addition to dismantling the NCP.

“There would be a need to develop industries and promote revenue-oriented sectors such as tourism, education and aquaculture for Sabah to make a leap in its economic standing. A lot of money would be required from the federal government to increase such economic activities.”

port kota kinabalu aerial view 260209
The FSM sees Sabah bargaining for state-of-the-art industrial and other infrastructure as a better alternative to pressing for a bigger oil royalty, adding, “we have enough gas reserves which can feed the industries”.

For starters, said Wong, the federal government should set up petrochemical industries in the state while considering an upward review of the oil royalty, which has been frozen at 5 percent since the late 1970s.

Infrastructure improvements envisaged by the FSM include building up rail transport services and improving roads linking Kota Kinabalu to main regional towns along the east coast like Sandakan, Lahad Datu and Tawau. This will mean upgrading 9,825km of gravel roads to add to the 6,000km of sealed roads.

There is also a need to focus on courier services, sea transport services, shipping and forwarding agencies, cargo handling, stevedoring services and port services, bunkering services, water and power.

State Industrial Development Minister Raymond Tan is hopeful that the NCP will be done away with in the near future, but prefers to use the term “further liberalisation”.

raymond tan
“The state government is requesting the federal government to fully liberalise the Cabotage Policy. At the same time, we are undertaking a study on the high cost of logistics services in Sabah,” he said.

The liberalisation of the NCP, he said, is among the 'Strategic Changes Initiative' study being undertaken by his ministry.

“We need a freight equalisation scheme through affirmative action - read subsidies - to settle the high shipping cost in Sabah,” added Tan.

Sabah's moves are likely to invite flak from shippers based in Peninsular Malaysia who are dependent on carriage to Sabah and Sarawak.

In the past, these shippers have resisted any plan to do away with the NCP. This has led to the charge that the federal transport ministry is in the pockets of the shippers.

The higher cost of living in Sabah and Sarawak, compared to the peninsula, is also attributed to the NCP.

Source: Malaysiakini

Monday, May 3, 2010

Europe’s shipbuilders may break out of the doldrums before Asia’s

FOR those who regard the smashing of a champagne bottle as a tragic waste, the problems facing the world’s shipbuilders are excellent news. It takes such a long time to construct huge ocean-going container ships, bulk carriers and oil tankers that the vast shipyards of South Korea, China and Japan will still be cracking bottles of bubbly over newly launched ships for a couple of years yet. But once these vessels, ordered in the boom before the financial crisis, are in the water, the course ahead looks rocky. Oddly, Europe’s shipyards, although still storm-lashed after 30 years of low-cost competition from Asia, seem to face a slightly brighter horizon.

Fresh orders for the world’s shipyards are at a low ebb. Last year they were more than 80% lower than in 2007, when sky-high freight rates and cheery economic forecasts encouraged shipping companies to scramble for new vessels. The subsequent recession in the rich world sent shipping rates tumbling. A swift rebound is unlikely: despite more scrapping and some cancellations, hundreds of ships are poised to hit the oceans this year.

Asia’s shipyards, streamlined and efficient, concentrate on building large, standardised ships. These are the sort in greatest oversupply. South Korea’s shipyards won over half of global orders for new ships in the first quarter of 2010, but they were worth just $2.2 billion. In 2008 Korean yards won orders worth $32 billion. Hyundai Heavy Industries, one of four big Korean shipbuilders, has not won a single order for a ship since late 2008.

European shipbuilders are suffering from a dearth of new orders too. The Odense shipyard owned by A.P. Moller-Maersk, one of the world’s biggest shippers, has an illustrious history: it produced the world’s biggest container ship. But cheap Asian competition for this type of vessel has holed it below the waterline. It will close in 2012.

Europe’s shipmakers are turning to national governments and the European Union for help, claiming that their industry is close to collapse. In early April representatives from nine EU countries called for an emergency programme to support the industry. Shipyards want help in gaining access to credit lines and soft loans, as well as rules to promote greener ships. This would support them until shipping finance recovers and hesitant customers regain faith in the world economy.

Yet the restructuring forced by low-cost Asian competitors has left Europe’s shipyards with some advantages. Their revenues of €30 billion-40 billion ($40 billion-53 billion) a year come mainly from niche markets which are not suffering from as much overcapacity as the mainstream.

Cruise ships are a particular speciality, and the market is growing. Four orders have been placed with European yards this year, compared with one in 2009. Ferries, another area of European dominance, are also in demand, and ageing ferry fleets in the Mediterranean are due for replacement soon. The offshore wind farms sprouting around the continent provide another opportunity. Europe’s shipmakers are adept at designing cable-laying ships and other service vessels. And as oil firms are forced to drill in ever deeper waters, ships suited to the task of towing and maintaining new rigs will be needed.

Pressure to make ships greener will also favour European shipyards. The International Maritime Organisation is discussing regulations that may force ships to belch out less carbon dioxide, and has introduced tighter limits on other pollutants. Europe leads in this type of technology, too. European shipmakers will also benefit from plans to encourage greater use of the continent’s inland waterways to ship goods instead of hauling them by road. If they can weather the current storm, Europe’s shipyards may yet resound again to the smashing of bottles.

Source: Economist