Accreditation by London Metal Exchange a big boost for port

LONDON: Port Klang is poised to become Asia’s leading distribution hub for the London Metal Exchange (LME) following its accreditation as the exchange’s Good Delivery Point.

The move will further enhance Malaysia’s image as a major regional logistics centre for LME trade, according to Port Klang Free Zone general manager Chia Kon Leong.

He said Port Klang’s listing was fast-tracked as it had always been LME-ready with its excellent port infrastructure, strong logistics support and sound operational systems.

Chia said the port was strategically located to capitalise on the burgeoning LME trade from producing countries like Australia and Europe to the vast consuming markets of South East Asia and China/Far East.

Datuk Seri Ong Tee Keat receiving the Letter of Accreditation from Martin Abbott (right) at the LME office in London. With them is Chia Kon Leong (left).

“We reckoned that Port Klang is targeting to receive 150,000 to 200,000 tonnes of metals within the next six months,” he said.

Chia had earlier witnessed the presentation of the Letter of Accreditation from the exchange’s CEO Martin Abbott to Transport Minister Datuk Seri Ong Tee Keat at the LME boardroom in London on Friday.

Established for over 130 years, the LME is the world’s premier non-ferrous metals market, offering futures and options contracts for aluminium and aluminium alloy, copper, nickel, tin, zinc, lead and plastics.

With a turnover in excess of US$3 trillion per annum, the LME also contributes to the UK’s invincible earnings to the tune of more than £250mil in overseas earnings each year.

Port Klang’s listing as a Good Delivery Point was approved by the LME on May 8, thereby allowing the port to receive LME-traded metals since June 10.

The accreditation is of immense significance to Malaysia as there are now only two other approved listed delivery locations in South East Asia, namely Pasir Gudang in Johor and Singapore.

LME delivery points are mainly in major ports around the world, which must meet strict criteria before they are approved for the handling of metals and plastics traded through the exchange.

Chia said Port Klang was strategically located at the crossroads of the world’s busiest shipping lane as well as being the world’s 15th busiest container port and one of Asia’s largest multi-purpose ports.

He said the port was centrally located in South East Asia, close to the huge consumer market in China which had no delivery points despite the enormous volumes of LME metals being shipped there.

“We’re close to consuming areas but away from major producers like those in Australia,” he said, citing BHP Billiton as one of the world’s largest mining companies.

Chia also said Port Klang was unique in a sense as within its free zone, there were companies which could consume such metals.

He said one firm, for instance, could actually get its copper supply from within the free zone, unlike other delivery points which were purely distribution areas.

He added that the listing had enhanced Port Klang’s resilience in facing the recessionary environment as metals needed to be stored due to lower consumption.

“We provide LME traders, warehouse companies and other users with highly competitive rates backed by cost-effective and efficient operations,” he added.

Ong said Port Klang was offering not just one port terminal but two and 405 ha of (Port Klang) free zone as a delivery location.

“And that free zone certainly has vast potentials that will suit the LME’s business purposes,” he noted.

Abbott said the LME appreciated the fact that Malaysia operated a fiscal regime that was encouraging to the international business community.

“With regards to Asia in general, as probably the biggest single growth area for the LME in the next 10 to 20 years, we’re very happy to have Malaysia and Port Klang as our strategic partners in our long-term business growth,” he added.

By CHOI TUCK WO

PORT operator Westports Malaysia Sdn Bhd and its executive chairman Tan Sri G. Gnanalingam each walked away with an award this year at the Brand Laureate Awards held in Kuala Lumpur on March 31.

Westports won the award for the Best Brand in Logistics – Ports while Gnanalingam won the award for Brand Personality.

Presented by the Asia-Pacific Brands Foundation, the Brand Personality is equivalent to the Grammy Award for Branding.

The award was presented by former prime minister Tun Abdullah Ahmad Badawi.

In a statement issued last week, Gnanalingam attributed the two awards to his staff who “have continued to innovate and provided the best services to our customers”.

He said winning the awards was further proof of the port’s capabilities and a testament to its quality of work.

“Westports was founded around innovation and the pursuit of excellence, and those core values have continued to be at the heart of everything we do,” he added.

By: btimes.com.my

THE Port Klang Authority (PKA), which now holds the roles of trade facilitator, regulator and landlord aims to turn Port Klang into a hub for national and regional traffic.

PKA, established as a statutory corporation in 1963, was the port operator before the privatisation of port services which started in 1986.

With the divestment of the operational facilities and services of the port to three distinct entities under three separate privatisation exercises, PKA’s core functions under the re-shaped role are trade facilitation, port planning and development, regulatory overview of privatised facilities and services, free zone authority and asset management.

PKA is also involved in port promotion to turn Port Klang into a major regional transshipment hub and to develop facilities to meet the objectives.

Among PKA’s initiatives were the development of the country’s first inland port, the Ipoh Cargo Terminal and the first distripark, the Port Klang Distribution Park (now known as Northport Distripark). PKA is also the free commercial zone authority and overseer of the port’s Vessel Traffic Management System.

In line with its objective of developing Port Klang as a regional hub, it has also set up a one-stop agency to facilitate the establishment of businesses that will generate cargo for the port.

PKA is the owner and developer of the Port Klang Free Zone (PKFZ), which is located on a 1,000 acre site in Pulau Indah.

PKFZ is the first free zone in the country to integrate industrial and commercial activities within the same area and is designed to facilitate the growth of regional distribution or international procurement centres.

PKA also has jurisdiction over the Port of Malacca at Tanjung Bruas. Its functions, powers, duties and jurisdiction was extended to Malacca Port in July 1983.

PKA board members consist of a chairman appointed by the King and ten directors (including the general manager), appointed by the Transport Minister.

By : biz.thestar.com.my

Port Klang handled 7.97 million TEUs last year, ie, 48.5 per cent of the total number of containers carried by all Malaysian ports

PORT Klang, the home of Westports and Northport terminals, remained the leading port in the country last year, holding a 48.5 per cent share of the total number of containers carried by all Malaysian ports.

It handled 7.97 million TEUs (20-foot equivalent units) last year, against the 16.4 million TEUs handled by all Malaysian ports last year.

Westports led the way with a 15.2 per cent increase in container volume from 2007, handling some 4.96 million TEUs, while Northport saw a 7.1 per cent increase to three million TEUs last year.

Conventional cargo movement for last year saw a 0.2 per cent increase to 22.2 million tonnes for Port Klang.

In terms of numbers carried by individual terminals, however, Port of Tanjung Pelepas (PTP) in Johor remained the top port, handling 5.6 million TEUs last year.

PTP was followed by Westports and then Northport.

Of all Malaysian port terminals, only one, Kuantan Port, registered a contraction in container volume last year.

Kuantan Port recorded a 0.4 per cent decline in container volume, from 127,600 TEUs in 2007 to 127,061 TEUs last year.

All ports in Sabah and Sarawak recorded positive growth in container volume, with Miri registering the biggest jump, growing by 30 per cent to reach 28,094 TEUs from 21,618 TEUs in 2007.

Bintulu Port managed to record robust growth last year, increasing to 286,013 TEUs from 251,800 TEUs in 2007.

For 2009, the local port industry is expected to experience a drop in cargo volume handled as import and export activities fall, amid slowing demand for goods.

Last week, Port Klang Authority (PKA) general manager Lim Thean Shiang had said that this year’s contraction would see Port Klang’s container throughput fall to levels experienced in 2007 to 7.118 million TEUs.

By : btimes.com.my

NORTHPORT is considering to delay the upgrading of one of its wharfs due to the economic slowdown.

“I understand that Northport is considering holding back the upgrade but whether they should hold it or not is another question,” Port Klang Authority general manager Lim Thean Shiang said during a briefing in Port Klang last Tuesday.

He said certain developments were necessary to cater to continued growth even though there may not be an immediately need for it.

“During recession one can only position oneself to be ready for the up and coming growth cycle, and if we do not have the adequate facilities available, how do we capitalise on such opportunities?” Lim said.

He said Port Klang would monitor the situation and hold consultations with ports on issues involving the development of the ports.

Northport managing director and chief executive officer Datuk Basheer Hassan Abdul Kader was quoted as saying in November last year that it would keep its RM500 million expansion plans on track.

The plan includes the development of a 350m container berth, bringing the container quayline at the port to a total of 3.4km.

By : btimes.com.my

… due to bleak outlook

PORT KLANG: Port Klang, the national maritime gateway, projects a 10% fall in cargo volume due to the bleak outlook for the economy this year.

Port Klang Authority (PKA) general manager Lim Thean Shiang said both port operators, Northport and Westports, started to feel the contraction in volume last month with a 16% drop in cargo volume against the same month in 2008.

“In an effort to cultivate and sustain the port business this year, especially import and export activities, PKA has decided on a blanket waiver for those who have difficulties in adhering to the three-day container free storage period at the port,” he told a press conference yesterday.

Port Klang previously had a five-day free storage period but this was cut to three days effective Jan 1.

Lim said the continuation of the waiver would be reviewed in July based on the economic climate then.

Lim Thean Shiang

Lim Thean Shiang

“But, the Port Klang community must continue to upgrade their efficiencies to operate under the three-day free storage period when the economy revives,” he said.

Additionally, PKA will also continue the feeder incentive scheme by April but with a new pre-qualification criteria.

The feeder incentive is given to feeder operators that help bring cargo to Port Klang from other places in the region.

The incentive was frozen in October for PKA to re-study its contribution to the cargo growth at Port Klang.

A total sum of RM37mil in incentive had been given to feeder operators since 10 years ago.

On Port Klang’s performance, Lim said it had recorded a 12% increase in cargo volume to 7.97 million 20-ft equivalent units (TEUs) last year from 7.11 million TEUs in 2007.

“This achievement has propelled Port Klang to be ranked the 15th-busiest port of the world in terms of volume last year from number 16 the previous year,” he said.

By SHARIDAN M.ALI

CMA CGM, the world’s third largest container shipping company, expects double-digit growth for its container volume at Westports next year despite the global economic slowdown.

The target is achievable with bigger ships coming into service, said CMA CGM Malaysia managing director Simon Whitelaw.

“We are projecting a double-digit growth for 2009,” he said on the sidelines of Symposium on Ports and Shipping New Developments in Port Klang on Wednesday.

The company, based in France, has registered 2.0 million TEUs (20-foot equivalent units) as on Tuesday, approaching the 2008 target of 2.1 million TEUs. Last year, it generated a volume of 1.7 million TEUs.

Among CMA CGM’s new bigger ships set to enter Westports are the 11,500-TEU vessels coming this week and the 13,500-TEU vessels in 18 months’ times.

According to Whitelaw, the company sees Malaysia as a big potential as the country has a balanced portfolio with commodities and manufacturing products as well as a steady balance of trade.

He said despite the current global economic turmoil, the company’s operations in China were not badly affected mainly because of its large office network in the country.

CMA CGM is also trying to maintain its freight rate at the right level although the market rate has dropped over the last few months, Whitelaw said. – Bernam

By : btimes.com.my

Terminal operator Northport (Malaysia) Bhd has embarked on a cost-cutting exercise that will see all recruitment frozen and advertising spending slashed, in anticipation of worsening economic conditions.

“Many people are predicting that things are going to get worse next year, and so we are preparing ourselves to ride through this crisis. An obvious way is to cut costs,” said its managing director and chief executive officer Datuk Basheer Hassan Abdul Kader.

He was speaking to reporters after delivering a talk titled “Expanding the Operating Capacity of Northport through Implementing Strategic Initiatives” at the Selangor Freight Forwarders and Logistics Association in Port Klang last week.

Basheer said the port has put a freeze on staff recruitment and postponed or cut spending in areas such as advertising.

“However, we have no plans to retrench staff. In fact, it did not cross our mind,” he said, adding that the port had recruited about 30 people in the last three months.

Basheer believes that Northport’s restructuring and merger exercise between Klang Container Terminal Bhd and Kelang Port Management Bhd in 2000 will put the port in good stead to withstand the current downturn.

This includes its strategy over the past few years of focusing on revenue and profit growth instead of volume growth; the optimal utilisation of its assets such as land, labour and capital; and moving to higher-margin businesses comprising container, conventional cargo, logistics and automotive.

“Because of our prudent policy where we have kept our gearing to almost zero, we are well positioned to withstand the current crisis,” he said.

Northport is also keeping its RM500 million expansion plans on track, which include the development of a 350m container berth, bringing the container quayline at the port to a total of 3.4km.

Basheer also said the port remained on track to meet its forecast of three million TEUs (20-foot equivalent units) in container throughput this year.

However, he warned that the port has started seeing a drop in cargo volume in the fourth quarter of this year.

“Northport’s focus is import and export trade, particularly intra-Asian trade. As such, this recession is a concern to us because if Malaysian trade is affected, Northport will also be affected.

“We are starting to feel the effects of the global slowdown in the current quarter. But the drop (in cargo volume) is nothing to be seriously alarmed about yet,” said Basheer.

By : btimes.com.my

PETALING JAYA: While Westports Malaysia Sdn Bhd leads the industry in terms of productivity, its success does not solely rely on advanced equipment and facilities, but more importantly, its workforce.

“The port business is in a service-oriented industry where people are the most important asset,” its executive director Ruben Emir Gnanalingam told StarBiz.

“Every port can acquire the most advanced cranes, berths and system but what makes a terminal better than the rest is how it manages its people.”

In scouting for talents, Gnanalingam said Westports offered attractive remuneration packages and staff benefits.

“As there are not that many applicants with prior port experience, we basically train our employees from scratch.

Ruben Emir Gnanalingam

Ruben Emir Gnanalingam

“Experience is a not a necessary pre-requisite, what is more important is finding the suitable person for the right position,” he said.

Gnanalingam said Westports’ young executives programme would include training in various departments to evaluate and identify the areas that an employee could excel in.

“And if an employee feels jaded doing the same job for a long time, we will try to move him around,” he said.

Westports averagely recruits 12 young executives every six months as part of its succession plan.

Gnanalingam said via the recruitment plan, Westports ensured that when a person left or were promoted, the vacant position would be filled by another experienced employee.

Another interesting talent management practice at Westports is its focus on key competence indicators (KCIs).

“Alongside our key performance indicators (KPIs), we also have KCIs that measure and describe an employee’s competence and character.

“This will identify a person’s talent to be placed in the most suitable position,” he said.

Westports also values leadership potential at every level of its operations.

“Every employee is encouraged to develop and train newer and less experienced subordinates. For me, I am constantly developing 30 to 40 of my senior managers to be better,” he said.

Westports is one of the key sponsors alongside Sime Darby Bhd and StarBiz for the Asia Strategic Talent Management Forum 2008 on Nov 13.

The forum, which will be held at Sime Darby Convention Centre, is organised by Leaderonomics Sdn Bhd.

By SHARIDAN M. ALI

In June this year, the port community in Port Klang was surprised by the entry of little known Lim Thean Shiang as Port Klang Authority’s general manager.

Coming to a post that has traditionally been reserved for long-serving government employees, Lim was worried of only two things – the acceptance of PKA employees and the port community.

“They (PKA staff) were sceptical of me, because I was from the private sector and therefore had doubtful management skills,” Lim quipped.

He said direct and indirect feedback gathered has been very encouraging.

“I feel that they have taken to my management style. I believe in empowering the staff, have them chair meetings, make decisions… it’s a new culture for them.”

Lim was handpicked by Transport Minister Datuk Ong Tee Keat to head Port Klang Authority after the March general elections. The official appointment, how-ever, came two months later on June 6.

He put the two months to good use by visiting both Northport (M) Bhd and Westports Malaysia Sdn Bhd, as well as meet up with logistics players to get a better understanding of the industry.

The 37-year-old lawyer by training is not daunted by the mammoth task ahead of him though, as he points out that his task is to make sure that plans for Port Klang are on track.

“The plans for Port Klang still remain the same. The way I look at it… what is important is to put Port Klang back on the world map, to promote Port Klang and not the port operators.

“Both port operators must assist Port Klang in promoting us as Port Klang not as Northport or Westports,” Lim said

Besides continuing with the goal of making Port Klang the transshipment hub of the region, Lim plans to set out a 15-year strategic port development plan, which will map out the direction of both port operators in Port Klang and the kind of facilities and technology needed to develop both ports.

“I realise the efficiency of both ports are mainly reliant on the transportation infrastructure, especially the road infrastructure. So, we will put up the proposal to the Ministry of Transport, which will be most likely tabled in the 10th Malaysia Plan, to see how we can link up both ports,” Lim said.

He said the linkage would reduce internal transfer time as well as divert the movement of cargo trucks away from the public road system.

By : Presenna Nambiar