Northport, POIC Sabah join forces to unlock BIMP-EAGA trade potential

The agreement will see the partners cooperating to manage and facilitate trade between West Malaysia and East Malaysia, says Azman Shah


NORTHPORT (M) Bhd recently inked a strategic collaboration agreement with POIC Sabah Sdn Bhd for the establishment of a sister port relationship to take advantage of the growing East Coast of Sabah trade movements.

Northport CEO Datuk Azman Shah Mohd Yusof (picture) said the agreement, aimed at boosting trade links and cargo flow via the two companies’ respective ports, would see the partners cooperating to manage and facilitate trade between West Malaysia and East Malaysia.

The venture would also have a special focus on the Brunei, Indonesia, Malaysia and the Philippines-East Asean Growth Area (BIMP-EAGA) trade route. “I believe the sister port relationship will not just be about the normal trade between West Malaysia and East Malaysia.

“It will also open up the possibility of regional cargo to move around such as via Mindanao, Sulawesi, Kalimantan and Papua New Guinea,” Azman Shah said at the signing ceremony in Port Klang last Friday.

He said the agreement will see both ports to share their respective range of experience, capabilities, resources, knowledge and know-how in port management, container handling, conventional cargo services, marine services, on-dock logistics, the halal trade, liquid bulk, dry bulk and distribution parks.

Azman Shah said the relationship between both port operators — Northport, a unit of Malaysia’s largest port operator MMC Ports under MMC Corp Bhd, and a Sabah state-owned company — would support the trade and cargo flow around BIMP-EAGA in the long run.

He added that the partnership is expected to pave the way for greater investment in the region.

While not revealing any figure, Azman Shah said there would be potential cargo volume increase for Northport as a result of the partnership.

He said the earlier strategic alliance the company had forged with two Sarawak-based shipping companies Shin Yang Shipping Sdn Bhd and Harbour-Link Group Bhd has so far contributed to a 5% jump in cargo volume for Northport.

Meanwhile, POIC Sabah CEO Datuk Dr Pang Teck Wai said the collaboration would enable the company to attract mainline shipping operators to its relatively young port.

“We are a new port that just came into operation about five years back and our container operation has just started. We need a major port to collaborate with for trade flows to happen because the mainline operators, for instance, may not come to our port.

“They are more likely to go to ports in southern Philippine, Kalimantan or Sulawesi,” Pang added.

Pang said the partnership could open up the less developed trade route which passes through Kalimantan and the East Coast of Sabah and set to be a new frontier.

“The East Coast of Sabah, which is the Lombok-Makassar straits has a greater development potential even more than the Malacca Straits. All Western Australian cargo going out to China passes Lahad Datu,” he added.

BIMP-EAGA has about 60 million population with resources movement including palm oil, cocoa, rubber, timber and minerals such as coal and petroleum.

Pang said POIC is also proposing to the state government to develop 100km of industrial lands in the entire stretch between Lahad Datu and Sahabat, potentially to be one of the largest industrial developments in the world, should it materialise.

The cost of the proposed development is expected to be in the billions.