CHARTING GROWTH
Firm plans to strengthen berths, purchase 2 quay cranes
PENANG Port Sdn Bhd is allocating RM180 million to upgrade its berth capacity to 2.9 million TEUs and purchase two quay cranes, says chief executive officer Sasedharan Vasudevan. The expansion will allow bigger vessels to dock and enhance the port’s throughput capacity.
PENANG Port Sdn Bhd is allocating RM180 million for expansion works this year, which will involve berth strengthening and purchase of two quay cranes.
Its chief executive officer Sasedharan Vasudevan said shareholders had approved the capital expenditure (capex) for the first phase of the expansion, which would allow the container terminal to increase its berthing capacity up to 2.9 million twenty foot equivalent units (TEUs).
“We are at the designing and consultation stages with engineers,” he said during a media familiarisation visit to Penang Port, here, recently.
Vasudevan said a big chunk of the capex would be for the container business to raise the TEU capacity. He said the capex would be internally-funded.
“The expansion will allow bigger vessels to dock and increase throughput capacity,” he said.
Vasudevan said dredging work would increase the channel depth to 11.5m.
“We believe if the growth trend continues, we will hit throughput of 2.2 million to 2.3 million TEUs in four to five years. We have to start the work now to meet future demand.”
Vasudevan said the expansion work would take 18 to 20 months.
“We handled 1.5 million TEUs last year, which represented about six per cent growth yearon-year,” he said, adding that Penang Port employed about 1,500 people.
Penang Port had allocated between RM30 million and RM40 million in 2016 for the purchase of container yard operations equipment.
The port targets to hit about 1.6 million TEUs, or five per cent growth, this year.
MMC Corp Bhd, under its subsidiary MMC Ports Holdings Sdn Bhd, holds a 49 per cent stake in Penang Port.
It acquired the stake from Seaport Terminal Johore Sdn Bhd in 2016.
According to the company’s filing to Bursa Malaysia, MMC Port has proposed to acquire the remaining stake, representing 37.46 million shares worth RM220 million, from Seaport Terminal Johore.
Vasudevan said the acquisition was expected to be completed by the first half of this year.
Shippers at Penang Port transport 80 per cent of their goods to mostly China, Japan and South Korea, with the rest going to the Middle East and other areas.
Vasudevan said Penang Port’s revenue contribution to MMC Ports was 30 per cent last year.
“Last year’s better cargo volume was primarily driven by southern Thailand, which represented about 38 per cent of cargo volume.”