Role of Malaysian Ports & Chinese Ports in realizing Maritime Silk Road initiative

Presented by:

Dato’ Sri Che Khalib Mohamad Noh

Group Managing Director, MMC Corporation Bhd

2

MMC PORTS: YOUR STRATEGIC MALAYSIAN GATEWAY TO CHINA

Capacity: 2.0mil TEUsHandled: 1.26mil TEUs

in FY2014

Penang Port

2.0 2.7 3.5 4.0 4.2 4.8 5.5 5.6 6.0 6.5 7.5 7.7 7.6

8.5 9.2 9.8

3

PORT OF TANJUNG PELEPAS: TRANSSHIPMENT HUB

Positioned just 45 minutes from the crossroads of the world’s busiest shipping lanes and located at the southern tip of Peninsular Malaysia

Over 120 vessel calls per week, connecting to over 300 ports worldwide.

Daily coverage to Europe, Far East and South East Asia/Intra-Asia

Multiple sailings to USA, Oceania, Africa, Middle East and Indian Sub-continent

Geographical Advantage & Global Connectivity

70: 30 Joint venture with APM Terminal, part of Maersk Group – the largest liner in the world.

Revenue has grown from RM448 mil in 2008 to RM1,043 mil in 2014.

PTP handled 8.5 million TEUs in 2014, an increase of 11.7% YoY.

PTP currently has 14 berths forming 5.04 km of liner wharf.

Current capacity has increased to 10.5 mil from 8.5 mil TEUs. Quay crane facility have similarly increase to 55 from 44 in 2013.

2M alliance. A 10-year Vessel Sharing Agreement (VSA) between Maersk Line and MSC with over 180 vessels.

No. 1

CONTAINER PORT IN MALAYSIA

No. 2 IN SOUTHEAST ASIA

No. 18

IN THE WORLD

10,000

VESSEL CALLS PER ANNUM

4

PORT OF TANJUNG PELEPAS: AMONGST THE WORLD’S LARGEST 3

5.3

33.

9

24.

0

22.

3

19.

4

18.

7

16.

6

16.

4

15.

2

14.

1

12.

3

10.

9

10.

6

10.

1

9.7

9.0

8.6

8.5

8

.3

6.8

6.6

6.5

5.8

5.8

5.8

5.4

5.0

5.0

4.9

4.6

Shan

ghai

Sing

apor

e

Shen

zhen

Hon

g K

ong

Nin

gbo-

Zhou

shan

Busa

n

Qin

gdao

Gua

ngzh

ou

Dub

ai

Tian

jin

Rott

erda

m

Port

Kla

ng

Kao

hsiu

ng

Dal

ian

Ham

burg

Ant

wer

p

Xiam

en

Port

of T

anju

ng P

elep

as

Port

of L

os A

ngel

es

Long

Bea

ch

Laem

Cha

bang

Tanj

ung

Prio

k

Brem

en

New

Yor

k

Ying

kau

Ho

Chi M

inh

Lian

yung

ang

Toky

o

Colo

mbo

Alg

ecira

s

30 29 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1

Chinese ports represent 7 out of the top-10 ports in the world

Malaysia TEU, in mil 2013 2014 PTP 7.62 8.52

Westports 7.47 8.37

Northport 2.88 2.57

Penang Port 1.24 1.30

Johor Port 0.76 0.79

Others 0.91 1.18

Total 20.88 22.73

5

CONTAINER TERMINAL - GLOBAL CONNECTIVITY

Sailing frequency

Route Frequency (per week)

Intra-Asia 49

Europe/Mediterranean 11

India Sub Continents 5

Middle East/Red Sea 2

Africa 13

US 5

South America 2

Australasia (Oceania) 4

30 shipping lines calling PTP

Connected to more than 200 ports globally with more than 100 weekly services

Route 2014 Volume

(TEUs)

South East Asia 2.54 mil

Far East Asia: 1.66 mil

- China 0.51 mil

- Japan, HK, Taiwan 1.15 mil

South Asia 0.42 mil

6

JOHOR PORT: MALAYSIA’S SOUTHERN GATEWAY

Located at the southern-most tip of Peninsula Malaysia, Johor Port is strategically positioned in the heart of the sprawling 8,000-acre Pasir Gudang Industrial Estate

Johor Port is linked to important commercial and industrial centers in Malaysia as well as other ports and neighbouring countries

Linked to the nation's road infrastructure and rail connections

Capitalizing on the transportation of commodities and industrials

JPB have a designed capacity of 40 mil MT with 24 berths spanning 4 km.

Volume handled in 2014 was 27.3 mil MT, up 1.3% YoY.

Revenue has been stable, growing from RM473 mil in 2006 to RM603 mil in 2014.

World's largest palm oil terminal - Storage capacity of 460,000 MT.

Located at Pasir Gudang Industrial Estate, which provides a comprehensive range of industries specialising in petrochemicals, engineering, furniture, telecommunications, electronic good and food products among others.

World's largest

palm oil terminal

Ranked 7th in the world in terms of London Metal Exchange volume

1.2 1.2 1.2 1.1 0.9 3.7 4.1 4.6 5.3 4.8

10.8 11.6 10.6 10.6 11.1

9.9 9.4 9.5 10.0 10.5

2010 2011 2012 2013 2014

Mill

ion

FWT

Throughput

Breakbulk Drybulk Liquid Container

25.6 26.3 25.9 27.0 27.3

SOUTH ASIA

JAPAN & KOREA

CHINA & TAIWAN Shanghai, Ningbo, Dalian,

Xingang, Yantian, Qingdao, Huangpu, Nansha, Shekou,

Hong Kong, Xiamen, Keelung, Kaohsiung,

Taichung

Middle East and South Africa

S.E. ASIA

7

JOHOR PORT REGIONAL SHIPPING CONNECTIVITY

Route Frequency (per week)

Intra-Asia 12

Domestic 5

Feedering Singapore 19

Route 2014 Container Volume (‘000

TEUs)

South East Asia 342.6

Far East Asia: 183.0

- China 58.5

- Japan, HK, Taiwan 124.5

South Asia 39.4

Sailing frequency

8

NORTHPORT: ACCESS TO KLANG VALLEY’S RICH HINTERLAND

Situated in Port Klang, Northport provides both conventional and containerized cargo handling facilities.

Northport offers dedicated facilities and services to handle wide variety of cargoes ranging from containers to cars, break bulk cargoes as well as capacity to handle liquid and dry bulk cargoes of all types and shipment sizes

Its container terminal have an annual capacity of 5.6 mil TEUs, with 12 berths spanning over 3 km in quay length.

Northport is undergoing an expansion program to push its installed capacity to 6.2 mil TEUs by 2016.

Amongst the largest multi-purpose ports in Malaysia

Container Volume Conventional Volume

1.9 1.8 1.7 1.6 1.4

1.4 1.4 1.3 1.3 1.2

2010 2011 2012 2013 2014

TEU

s, in

mil

Local Transshipment

3.3 3.2 3.0 2.9

2.6 7.21 7.75 8.23

9.84 8.28

2010 2011 2012 2013 2014

Mill

ion

FWT

9

NORTHPORT: REGIONAL CONNECTIVITY

Route Sailing Frequency

(per week)

Intra-Asia 17

Asia/Africa 3

Australia 2

Gulf/Middle East 2

Indian Subcontinent 8

('000 TEU) 2014 Container

Throughput %

China 455.1 17.7%

Malaysia 464.6 18.1%

India 314.8 12.2%

Japan 162.8 6.3%

Indonesia 119.6 4.6%

South Korea 147.9 5.7%

Taiwan 110.8 4.3%

Vietnam 79.8 3.1%

Hong Kong 95.7 3.7%

Thailand 94.4 3.7%

Others 528.4 20.5%

Total 2,573.9

10

Penang Port is fully equipped to handle all types of cargo such as container, liquid, dry bulk and break bulk.

The port has grown rapidly and capable to handle over 30 mil FWT of cargo. Its container facility currently stands at 2 mil TEUs annually.

Volume handled in 2014 was 30.0 mil FWT.

Container handling is the core operation with the North Butterworth Container Terminal (NBCT) being the fulcrum for it.

It is equipped with 6 berths (N1 to N6) that is 1.5 km in length, equipped with 13 quay cranes and 32 RTG cranes.

Located in the state of Penang, in the north-west of Peninsula Malaysia, it is the oldest and longest established port in Malaysia

Supported by nearly 30 shipping lines/agents

Gateway port to its hinterland of North Malaysia and Southern Thailand

Gateway for northern region

28.8

29.4 29.3

30.1 30.0

2010 2011 2012 2013 2014

FWT,

in m

il

Throughput

PENANG PORT: GATEWAY TO MALAYSIA’S NORTHERN HINTERLAND

11

MALAYSIAN PORTS: NATURALLY COMPLEMENTS CHINA’S STRENGTHS

7 out of 10 busiest container ports in the world are located in China

No.1 shipbuilding nation in the world

3 Chinese shipping companies are among the 12 largest container transporters

3rd World’s largest ship-owners after Greece and Japan

Malacca Straits records about 80,000 vessels per year

Shortest distance linking China Mainland to Indian Subcontinent

Natural deep waters, sheltered from adverse weathers

ASEAN hub for 2M & o3 alliances

Major ports are well equipped to accommodate the largest vessels

12

MALAYSIA-CHINA: STRONG ECONOMIC RELATIONSHIP

1,168 1,272 1,309 1,369 1,449

128 167 181 203 208

2010 2011 2012 2013 2014

RM b

illio

n

Total trade Total trade - China

13%

115.5

85.7

52.3

54.8

39.7

92.4

108.8

64.4

82.7

40.3

China

Singapore

USA

Japan

Thailand

Major Trading Partners (RM bil)

Export Import

China is the world’s biggest exporter, contributing to more than 10% of global trade

Malaysia is China’s 3rd largest trading partner in ASIA and 1st in ASEAN

China is Malaysia’s biggest trading partner

China’s investment in Malaysia grew to about RM6.4bil in 2014 from RM35mil in 2008

11% 14% 15% 14%

13

ROLES FOR PORTS: ENSURING SUSTAINABILITY OF THE SILK ROAD

To provide infrastructure and services to facilitate international trade

To continuously improve productivity levels to accommodate trade growth

To consolidate trade cargoes at preferred and strategic ports

To play a major role in multi-model logistics, linking hinterlands to ports

Strategic partnerships and continuous engagement – technology, marketing, best practices

Port of Tanjung Pelepas & Johor Port

Port Klang

Shenzhen

Ho Chi Minh

Tanjung Priok

14

CONTINUED GROWTH IN BOTH REGIONS TO INCREASE OPPORTUNITIES

Strong throughput growth is expected to continue in both China and South East Asia over the next few years (Drewry Report 2014)

Opportunities for joint investment in the building of port capacity in South East Asia

Currently, ports BOT projects are typically done via a consortium of main port operators

MoU for potential collaborations in operations, engineering, marketing and information technology

Kuantan, Pahang

Melaka

Consortium between IJM & Beibu Gulf Holdings (HK) to invest RM3 bil to expand Kuantan Port, increasing capacity to 52 mil FWT.

China investment of RM43 bil in the Malacca Gateway Project, with a total land area of 246ha. The project will consist of a deep-sea port and ocean park, expected to be completed in 2025

4.0

3.0

2.6

1.8

3.3

7.6

5.1

4.1

3.3

5.6

Greater China

South East Asia

Europe

North America

Global Total

Throughput vs Capacity Growth (2013 – 2018)

Throughput Growth (%)Capacity Growth (%)

186

142

136

136

131

APM TerminalsYokohama

Tianjin Port Pacific

Qingdao Qianwan

Tianjin Port Alliance

DP World

Top Terminals: Berth productivity 2014

82.9

65.0 60.0

38.3 34.8

19.0 17.0 14.5 10.7 9.7 9.4

1 3 2 4

15

AMONGST THE MAJOR GLOBAL PORT OPERATORS

Note: Aggregated volume based on total container volume handled by PTP, Johor Port, Penang Port, North Port and Red Sea Gateway Terminal

(Mil

TEU

s FY

2014

)

5 7 6 11 10 8 9

MMC Ports

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JOINT OPPORTUNITIES

.

.

. .

THAILAND

SINGAPORE

Opportunities:

Major Chinese shipping lines to Form alliances and establish regional hubs in Malaysia

Potential JVs for regional port developments

Potential collaborations in operations, engineering, marketing and information technology

PTP Johor Port

North Port

Penang Port

Opportunities:

Major Chinese shipping lines to Form alliances and establish regional hubs in Malaysia

Potential JVs for regional port developments

Potential collaborations in operations, engineering, marketing and information technology 03 Alliance @ Westport

CMA CGM China Shipping United Arab Shipping

2M Alliance @ PTP Maersk MSC

MAJOR TRADE LINE

17

Thank You