Kisah Hidupku, Dunia Internetku...: August 2010

MMC told to defer port consolidation

The decision comes after requests from shippers and manufacturers operating in Pasir Gudang, Tampoi, Tebrau and the surrounding areas.

The Cabinet has asked the management of the Port of Tanjung Pelepas (PTP) and Johor Port to defer their consolidation plan, International Trade and Industry Minister Datuk Seri Mustapa Mohamed said.

The decision was made in response to requests from shippers and manufacturers operating in Pasir Gudang, Tampoi, Tebrau and the surrounding areas.

Mustapa held a discussion with the shippers and manufacturers, who asked for container operations to remain at Johor Port instead of being shifted to PTP under the consolidation plan.

"They told me that their operation costs will drastically increase if they have to transport their goods all the way to and from PTP.

"I had recently conveyed their wishes to the Cabinet and it was decided that the status quo of the ports should remain as it is," Mustapa said after visiting port facilities at Tanjung Langsat, near Pasir Gudang, in Johor yesterday.

The port authorities and Johor branch of the Federation of Malaysian Manufacturers (FMM), which led the protest against the consolidation plan, agreed in November last year to leave the final decision to the Cabinet.

The consensus was reached after a two-hour meeting between PTP and FMM Johor at the Johor Port office in Pasir Gudang.

Both PTP and Johor Port are owned by MMC Corp Bhd.

MMC has said that the consolidation is necessary as Johor Port is congested and operating at full capacity, with no room for expansion.

On his visit to Tanjung Langsat, Mustapa said rapid development in the area was drawing the interest of investors.

The area, which caters mostly for capital-intensive investments in manufacturing and oil and gas industries, has attracted 30 companies, with investments worth RM20 billion.

Read more: MMC told to defer port consolidation http://www.btimes.com.my/Current_News/BTIMES/articles/holdpot-2/Article/#ixzz0w9VsHLEM

Second News

Questions for PTP as merger bid turned down

The failed rationalisation of the Port of Tanjung Pelepas and Johor Port may not affect the performance of MMC Corp much

The failed rationalisation of the Port of Tanjung Pelepas (PTP) and Johor Port may not affect the performance of MMC Corp Bhd much, but it does bring up the question of what will happen to PTP and its expansion plans.

Combined operations of the two ports contributed about 14 per cent of the group's revenue last year.

MMC Corp made a net profit of RM237 million on revenue of RM8.4 billion in the financial year ended December 31 2009.

"I doubt that any analyst has factored in the rationalisation of the two ports into MMC Corp's valuations. So it does not really affect the stock," said an analyst, who declined to be named.

According to OSK Research Sdn Bhd head of research Chris Eng, PTP has started dredging work for berths 13 and 14 as part of moves to increase the port's capacity. Currently, it has 12 container berths.

However, with only about 78 per cent of the capacity utilised and no added containers or shipping lines to be expected from Johor Port through the rationalisation, there does not seem to be a need for the expansion.

PTP is handling some 6.6 million boxes at present. It has a capacity of 8.5 million twenty-foot equivalent units (TEUs).

"They will have to hold back on expansion plans as there is still some spare capacity to work with now," Eng told Business Times last Friday.

He said that this could mean some capital expenditure in Johor Port instead, previously held back pending a decision on the rationalisation of the two ports to ease congestion.

"There are still a couple of bulk berths that can be converted into container berths (for expansion). There is a little bit of room to play for Johor Port," Eng said.

The announcement does not change his call on the parent of both ports, MMC Corp.

As Eng pointed out, the rationalisation was never factored in as he had anticipated the difficulty in consolidating the port operations.

MMC Corp owns 70 per cent of PTP and all of Johor Port. Ever since it bought over Johor Port in 2006, talk of rationalising MMC's port operations has been ongoing.

The plan had been to have PTP focus on containerised cargo, while Johor Port would handle bulk traffic.

It faced fierce opposition, however, from manufacturers who worried about higher transport costs.

PASIR GUDANG: The Government has decided not to approve a proposal by MMC Corp Bhd to consolidate and rationalise the operations of Port of Tanjung Pelepas (PTP) and Johor Port.

International Trade and Industry Minister Datuk Seri Mustapa Mohamed said the decision was made after considering views and concerns from companies and industries operating here.

He said his ministry has held dialogues with companies and industries operating in Pasir Gudang to discuss the matter after the proposal made headlines.

“The companies have voiced their concerns that they will have to incur higher haulage costs if they were to use PTP instead of Johor Port,’’ said Mustapa.

He was speaking to reporters after a visit to the Pasir Gudang and Tanjung Langsat industrial areas and Tanjung Langsat Port yesterday.

Under the proposal, Johor Port’s container operations in Pasir Gudang will be moved to PTP in Gelang Patah, turning the former into a non-containerised port while the latter will focus on its forte of handling containerised cargo.

The proposal by MMC Corp to streamline operations at the two ports is to reduce cargo leakages to Singapore, which have been going on for many years due to better connectivity offered by Singapore ports.

Mustapa said apart from the higher transportation costs due to the distance between the two ports of about 90km, the stretch along the Pasir Gudang Highway to Perling Highway was also experiencing traffic woes.

Billionaire Tan Sri Syed Mokhtar Al-Bukhary, who controls MMC Corp, has 100% equity in Johor Port and 70% interest in PTP and Senai Airport.

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MMC told to defer port consolidation