The Malaysian Reserve

Southpoint gets new lease of life

MoU between Northport, Cenergi Sea, bioenergy Machinery and EPIC to establish a centralised biomass processing hub at Southpoint in Port Klang on April 12, 2018. (From left) Cenergi group CEO Ernest Navaratnam, EPIC director and MBIC president Datuk Leong Kin Mun, Northport’s Azman, Bioenergy Machinery CEO Eddy Chin, Cenergi Sea new ventures head Bernard Ryan Simon and Malaysian Bioeconomy Development Corp Sdn Bhd senior VP Zainal Azman Abu Kasim

Efforts are underway to rejuvenate the oldest part of Port Klang, with bitumen, biomass and other conventional cargoes playing a role

By HABHAJAN SINGH

Mention Port Klang today, chances are Southpoint will not feature prominently in the conversation. That may soon change. The oldest part of the port its history stretching back more than a century is on the move. Some new business ventures are making their way to this part of the port, promising a rejuvenation.

There is already talk underway to expand biomass processing and logistics facilities here. Another operator is looking at bumping up their bitumen exports from Southpoint.

“Southpoint remains relevant in Port Klang’s links in the short-sea trade to the East Malaysia and coastal ports in the South-East Asian region. It continues to play an important port of call for ships plying to niche markets,” said Shui Xing Group (SXG) corporate planning and marketing head N Sankunny.

SXG operates as the main cargo contractor for the handling of break bulk cargo for the East Malaysia sector. Southpoint serves as one of the main ports for cargo originating from Peninsular Malaysia.

Sankunny should know a thing or two about this area. He had clocked in more than four decades with Northport (M) Bhd which manages both Southpoint and Northport. Westports is the other port that makes up Port Klang, currently the 12th largest port in the world.

Yap Man Chan, founder of Blackhem Holdings Sdn Bhd, agrees that Southpoint still has a role to play.

“It may not be as glamorous as their counterparts Northport and Westports. Those ports will not want to handle these conventional cargo. We have a niche market that we can focus on, and the market is big,” he told The Malaysian Reserve.

Blackhem, via its wholly owned Quantum Share Sdn Bhd (QS), owns and operates a product terminal in Port Klang, as well as a warehouse attached to the terminal.

History

Aerial view of Southpoint 

Port Klang began more than 100 years ago at Southpoint, then a small port known as Port Swettenham administered by Malayan Railways Ltd during the British rule. It officially opened to traffic on Sept 15, 1901, and was renamed Port Klang in January 1972. Northport came around in the 1960s while Westports in the 1990s.

For years, the port served as the national gateway, offering a wide range of port facilities and services and handling all cargo types such as dry bulk, breakbulk and liquid bulk.

Its administration became more structured when a regulatory body, Port Swettenham Authority (PSA), was formed on July 1, 1963. It was later renamed Port Klang Authority (PKA).

Northport, formerly known as Klang Container Terminal (KCT), is regarded as the flagship of the government’s pioneer privatisation programme. KCT was established as part of the first phase of Port Klang’s privatisation in March 1986. Its success had then set the stage for the privatisation of other federal ports and utilities nationwide.

Over the years, Southpoint began playing second fiddle to Northport. It is said that the uneven growth of the two ports were partly driven by the demand for port facilities at Port Klang in the 1970s, as well as the advent of containerisation. In time, Southpoint came to serve small coastal ships, tugs, barges, fishing crafts and inter-island ferries.

Rejuvenation

Since the port facility at Southpoint has traditionally served as a coastal termi- nal to handle the trade between Peninsular Malaysia and Sabah/Sarawak, several initiatives have been taken to rejuvenate and refocus the Southpoint business to cater for a larger and a more promising regional trade.

Designated as a “Free Commercial Zone” in February 2004, Southpoint offers itself as a cargo consolidation centre for re-shipment of cargoes shipped in conventional form from neighbouring and riverine ports.

The transformation of Southpoint was further intensified by the new management to rejuvenate and refocus Southpoint’s business activities following the takeover of North- port’s ownership by MMC Corp Bhd through its wholly owned subsidiary, MMC Port Holdings Sdn Bhd (MMC Ports), in January 2016.

MMC Ports also operates Port of Tanjung Pelepas Sdn Bhd, Johor Port Bhd, Penang Port Sdn Bhd, Tanjung Bruas Port Sdn Bhd, Kontena Nasional Bhd and JP Logistics Sdn Bhd. Internationally, MMC also has an associate stake in Red Sea Gateway Terminal Co Ltd, a container port terminal within the Jeddah Islamic Port, Saudi Arabia.

Southpoint’s business prospect has been further strengthened with the extension of Northport’s concession for 30 years till November 2043. The concession extension was signed between Northport, the government of Malaysia and PKA on March 6, 2018.

It caters to ships serving regional trades with an average of 384 ship calls per year. Significant upgrading and refurbishing of the facilities and services have been carried out to meet the demands of the trade. It has facilities for the handling of liquid bulk cargo such as palm oil, rubber latex, bitumen, as well as break bulk cargo such as steel coils and project cargoes.

Today, Southpoint has eight berths, from Berth 1 to Berth 7A. The first four berths have a depth between 9.5m and 10.5m to cater for ocean-going vessels with displacement of up to 40,000 tonnes. Berths 5 to 7A have depths of about 6m and able to accommodate coastal ships with dis- placement of up to 6,000 tonnes.

Other facilities at Southpoint include eight warehouses and multipurpose open yards with a total space of 53,000 sq m.

Future Plans

Since 2016, Southpoint has seen a recovery in some of its major commodities such as bitumen, woodchips and project cargo, although there were declines in crude palm oil and steel break bulk cargo. Southpoint is anticipating significant growth for bitumen, woodchips, clay and met coke in 2018.

Moving forward, Northport has laid out a strategic plan for Southpoint’s future business operations. In April, Northport signed a memorandum of understanding (MoU) with three companies to establish a centralised biomass processing hub in Southpoint.

The hub caters for various types of biomass such as palm kernel shell, palm pellet, woodchips, wood pellet and other biomass materials. The companies involved are Cenergi Sea Sdn Bhd, Bioenergy Machinery Sdn Bhd and Environmental Preservation and Innovation Centre Sdn Bhd (EPIC).

“This collaboration is our contribution to the government’s efforts to promote the biomass industry under the National Biomass Strategy 2020 (NBS2020). Through this collaboration, it is hoped that we will be able to help develop an end-to-end logistics value chain for the biomass industry”, Northport CEO Datuk Azman Shah Mohd Yusof told The Malaysian Reserve.

Malaysia is projected to produce up to 80 million tonnes of biomass annually by 2020, thus creating business

opportunities worth billions, according to the NBS2020 blueprint. The biomass value chain could also create RM30 billion in additional gross national income, 66,000 jobs, 12% reduction in carbon emissions and RM25 billion in investments by 2020 by utilising agricultural biomass for high value products.

“The centralised processing hub, which is part of our plan to turn Southpoint into a regional Biomass Logistics Hub, is expected to cater for the demand for biomass products from the East Asian countries especially Japan and Korea who are building more renewable energy power plants in their respective countries as an alternative to fossil fuel and nuclear power plants,” said Azman.

He added that Northport was working closely with the Malaysia Biomass Industries Confederation (MBIC) to provide logistics solutions for the biomass industry where the market demand is estimated at half a million tonnes a month for renewable energy.

“Northport has more than 15 acres (6.07ha) of land available to set up biomass processing and logistics facilities at Southpoint,” said Azman.

Biomass

On this front, another player with expansion plans at Southpoint is Bio Eneco Sdn Bhd, a developer, manufacturer and supplier of high-grade biomass fuels like wood pellet, palm kernel shell, sawdust and wood chips.

“We expect our exports to soar. We need a biomass bonded warehouse in Southpoint to hold all our outgoing stock while waiting for the mother vessel,” said Bio Eneco founder/president Datuk Diamond Yeo.

Due to the high-calorific values and clean-burning qualities, Bio Eneco claims that palm kernel shell and pallets made out of empty fruit bunches are replacing common fuel types.

With the biomass hub, Northport is targeting a total cargo throughput of two million tonnes annually by 2020.

“The growth potential for Southpoint is exciting. We are already a 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.