Free commercial zone status a game changer for Penang Port
GEORGE TOWN: Despite being the final federal port in the peninsula to be accorded free commercial zone (FCZ) status, Penang Port Sdn Bhd’s North Butterworth Container Terminal’s (NBCT) operations will be impactful, especially when its transshipment activities are in full swing.
Penang Port chief executive officer Datuk Sasedharan Vasudevan said even though NBCT received FCZ status only on Feb 1, the port operator has a conservative target for transshipment throughput of 50,000 twenty-foot equivalent units (TEUs) for 2021.
“However, once the business matures, it can potentially go up to half million TEUs. This is what we are looking at for the next five years. Once it starts building momentum, we may have to expand the port to ensure we have the capacity,” he told Bernama.
He said Penang Port’s strategic location would enable transshipment activities from the Bay of Bengal and potentially the Middle East, considering that it is the first port located on the Straits of Malacca.
In preparation for the FCZ and the potential new business that comes with it, he said, Penang Port, a unit under MMC Corp Bhd, has spent close to RM500 million in capital expenditure in the last five years.
Banking on the FCZ status, he is confident that Penang Port would reach greater heights in line with the performance of other ports such as Port Klang and Port of Tanjung Pelepas (PTP), of which, transshipment made up at least 40% of their revenue.
While Port Klang and PTP primarily serves a lot of EastWest route such as China to Europe, Penang Port’s focus is mainly the Bay of Bengal.
“The Bay of Bengal starts from Sri Lanka right up to southern Thailand, and in 2020, the Bay of Bengal throughput volume is estimated to be 8.1 million TEUs,” Sasedharan said.
While other businesses are reeling from the cruel blow of the Covid-19 pandemic, logistics might come out of this calamity unscathed. “Covid-19 has not impacted the logistics sector because people still need to eat and medicines still need to be exported and imported,” Sasedharan said.
He is optimistic of the port’s outlook, given the potential of new transshipment business and the opening of new factories in the northern region.