Penang Port taps southern Thailand’s booming economy


Penang Port is on an expansion mode. The oldest and longest established port in Malaysia is rolling out a five-year plan, partly to capture the growing business coming from southern Thailand.

Penang Port Sdn Bhd (PPSB), which runs the port, has earmarked RM320 million for the five-year plan, with a big portion of the capital expenditure (capex) expected to go towards purchasing new equipment. There are also plans to reclaim land.

“In 2017, we had ordered three new rubber-tyred gantry (RTG) cranes as part of our new expansion plan and to extent our footprint,” PPSB CEO Sasedharan Vasudevan told The Malaysian Reserve in a recent interview.

One key factor in the plan is the latest developments across the border. Over the years, Penang Port has served as the main gateway for shippers in the northern states of Malaysia and also the southern provinces of Thailand. The same holds true today.

Located strategically a mere two hours away from Bukit Kayu Hitam’s customs point, Penang Port is set to catch the projected spill over from the booming investments now taking place in the south of Thailand. The border checkpoint at Bukit Kayu Hitam is soon expected to operate 24 hours to facilitate the cargo movement.

In 2017, the railway’s cargo terminal at Padang Besar was upgraded in a RM23.5 million project to give a boost to the logistics industry.

The longer hours at Bukit Kayu Hitam checkpoint and the railway cargo terminal upgrade is expected to spur cross-border trade, with a potential to increase capacity to 400,000 TEUs per annum from the present 270,000 TEUs.

Penang Port serves nearly 30 shipping lines and agents

“We receive quite a major portion of cargo from southern Thailand as its businesses have been booming. The cargo from the south Thailand region accounted for more than a quarter of our total containers handled,” he said.

He estimated that container segment makes up 70% of Penang Port’s business, with about 38% of it coming from southern Thailand. The other businesses include general and liquid cargo, marine services and the cruise terminal.

In 2015, Thailand announced a seven-year investment promotion strategy with the goal of nurturing the investments in the border provinces of southern Thailand and attracting international investment.

Sasedharan said that Thailand’s establishment of the Rubber City Project in its Southern Industrial Estate in Songkhla province has also led to the increase in cargo shipment.

“Over the past few years, Thailand has emerged as an attractive investment destination, particularly in the southern region. “New investments are constantly pouring in. Several multi-national companies have set up factories there. We see the potential to generate more than 6-7% growth in containers per annum,” he said.

Shippers in Thailand see the geographical advantages of Penang Port. Via rail or road, the distance between Hat Yai and Penang is around 230 km, or about a four-hour drive. However, hauliers will take 12 to 13 hours to drive from Hat Yai to Thailand’s main ports like Bangkok Port and Laem Chabang Port. The Songkhla Port does not cater to big ships due its limited water draft and handling capacity.

“Thus, it is only logical for them to load and ship the containers in Penang. Penang serves the Thai shippers’ requirement in terms of meeting their logistical demands,” he said.

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

Container segment makes up 70% of Penang Port’s business, with about 38% of it coming from southern Thailand


Going back into history, Penang’s port of the north was acquired by the British as they needed a port to act as a collecting centre for the produce of the Malay Archipelago and also as a place for ships plying the IndiaChina trade route to replenish their stocks of fresh food and water. In 1786, Captain Francis Light, an English trader of the East India Company, formally took possession of the Penang Island and renamed it to the Prince of Wales Island.

The port was administered and operated by two public authorities: Federal Malay States Railway at Prai Wharf and Penang Harbour Board at Swettenham Pier. In 1956, Penang Port Commission came into the picture.

Fast forward, the port was corporatised in 1994 under Penang Port Sdn Bhd, a wholly-owned company of the Ministry of Finance, and then privatised in 2014. It is now part of MMC Port Holdings Sdn Bhd, a unit of MMC Corp Bhd.

Today, Penang Port serves nearly 30 shipping lines and agents. These lines provide the connectivity to the world that Penang Port requires as a gateway port to its hinterland of North Malaysia and Southern Thailand, in particular.