MMC Corp Bhd and Keretapi Tanah Melayu Bhd (KTMB) have entered into an agreement to form a joint-venture (JV) company that will be known as KTMB MMC Cargo Sdn Bhd to expand synergy in the rail-port freight segment.
MMC’s group MD Datuk Seri Che Khalib Mohamad Noh said the incorporation of the subsidiary will increase the frequency of rail inter-terminal transfer (Rail ITT) between the ports owned by MMC, enhancing the group’s port and logistic division.
“It is expected that KTMB MMC Cargo will provide an efficient and reliable Rail ITT services where the said services will be synchronised with the arrivals and departures of vessels at the relevant ports,” said Che Khalib in a statement issued yesterday.
Under the agreement, MMC will hold a 49% equity interest in KTMB MMC Cargo while the remaining 51% equity will be held by KTMB.
KTMB and MMC will subsequently undertake the business of rail-freight transport and related businesses in the rail cargo sector.
MMC has been acquiring strategic logistic and port assets to enhance its proposition and create greater synergies between the assets.
MMC, who wholly owns Johor Port Bhd and 70% interest in Port of Tanjung Pelepas Sdn Bhd in Johor and Senai Airport Terminal Service, recently received the nod from its shareholders to acquire a 53.42% stake in NCB Holdings Bhd from Permodalan Nasional Bhd and AmanahRaya Trustees Bhd for a cash consideration of RM1.11 billion.
The acquisition will give MMC a control of Northport operations in Port Klang. The establishment of KTMB MMC Cargo will add rail connectivity to its ports and provide the synergy to grow the business.
Meanwhile, KTMB president Lt Kol (B) Sarbini Tijan said the formation of KTMB MMC Cargo will provide the necessary synergy as both KTMB and MMC will be able to leverage on each other’s strengths to increase market share in the logistic sector.
“The JV also will have access to KTMB’s rail network connecting to major seaports in Peninsular Malaysia such as Port Klang and Penang Port and other seaports owned and operated by MMC Group.
“KTMB MMC Cargo will also be able to utilise the technical and operational knowledge and know-how from KTMB and MMC,” he said.