Northport plans biomass hub to boost Southpoint
Facility will see up to 30,000 tonnes of exports annually to Japan
NORTHPORT (M) Bhd, a member of MMC Corp Bhd, plans to set up a biomass processing and logistics facility at Southpoint in Port Klang.
The proposed biomass logistics hub is an integral part of Northport’s rejuvenation programme for Southpoint.
This follows a privatisation agreement for Northport and Southpoint signed with the government on March 6.
Northport chief executive officer Datuk Azman Shah Mohd Yusof said the project would involve up to 30,000 tonnes of biomass exports annually to Japan, beginning in the fourth quarter of this year.
“We will start with a modest capacity for the first two years. We want to establish the hub and get enough traction for more potential players to come in. We can then scale up and take advantage of the economies of scale,” he told NST Business recently.
Azman said the port operator has allocated 6ha in Southpoint to provide facilities such as warehouse, space for processing and port handling services.
“The centralised processing hub, which is part of our plan to turn Southpoint into a regional biomass hub, is expected to cater for the demand for biomass products from the East Asian countries, particularly Japan and South Korea.”
He said market demand for biomass products in the form of palm kernel shell, woodchips and wood pellets was estimated at 500,000 tonnes a month. Japan and South Korea are building renewable energy power plants as an alternative to fossil fuel and nuclear power plants.
“The hub is a vital part of the value chain needed to serve biomass and logistics providers in an industry which is very fragmented,” said Azman.
He said by having a centralised hub, Northport would be able to optimise on the logistics cost and benefit from the economies of scale.
In April, Northport signed a memorandum of understanding with Cenergi Sea Sdn Bhd, Bioenergy Machinery Sdn Bhd and Environmental Preservation and Innovation Centre Sdn Bhd (Epic) to establish a centralised processing hub for various types of biomass.
Cenergi Sea and Epic, which are subsidiary companies of Khazanah Nasional Bhd, will provide capital investment and quality standardisation and certification while Bioenergy Machinery will manage the operation and provide the processing equipment.
Azman said the collaboration is part of the company’s contribution to the government’s efforts to promote the biomass industry under the National Biomass Strategy 2020.
Under the blueprint, Malaysia is projected to produce up to 80 million tonnes of biomass annually by 2020, creating business opportunities worth billions of ringgit.
The biomass value chain could also create RM30 billion in additional gross national income and 66,000 jobs, and 12 per cent reduction in carbon emissions as well as RM25 billion in investments by 2020, by utilising agricultural biomass for high-value products.
He said Northport has been working closely with the Malaysia Biomass Industries Confederation to provide logistics solutions for the industry and is hopeful that the collaboration will develop an end-to-end value chain.
“The potential is tremendous. We know market players have been looking for a solution to their logistics issues. We have received a few requests for this land space by industry players.”
Northport aims to create a thriving ecosystem, allowing players to build the facilities themselves and operate independently.
“We will facilitate and create the space for players to operate and provide the port handling services.”
With the biomass hub, the port operator is targeting a total cargo throughput of two million tonnes annually by 2020 at Southpoint, backed by key commodities such as bitumen, crude palm oil and biomass products.
“The growth potential for Southpoint is exciting. We are already the regional distribution centre for bitumen. We continue to be strong in palm oil exports, and our safe and high-productivity handling of project cargo and steel products are attracting new customers. The biomass logistics hub will further boost our cargo volumes and breathe new life into Southpoint,” said Azman.
Southpoint is one of three ports that make up Port Klang. The other two are Northport and Westports.
MMC has been working closely with the Southpoint business community to revitalise the port, and the results are beginning to show.
In spite of the vagaries of the commodities market, Southpoint, which operates as a bulk terminal, has performed well, handling cargo such as palm oil, bitumen, steel products, rice, fertiliser and biomass.