MISC logistics arm’s facilities certified halal

MISC Integrated Logistics’ (MILS) storage and warehousing facilities have been certified halal by Halal Development Corp (HDC).

MISC said in a statement that the certification was awarded based on the merits of hygiene and syariah compliance for both dry and cold storage.

The integrated logistics arm of MISC Bhd is located at the MISC Logistics Hub (MLH) Free Commercial Zone (FCZ) on Pulau Indah, Port Klang.

MILS’ dry warehouse, with 250,000 sq ft of space, can handle 23,000 pallets.

The cold-storage facility is able to accommodate multiple temperatures ranging from 18°C to -25°C. The cold room is equipped with mobile racking solution with a capacity for 8,500 pallet positions for frozen products and 1,200 pallet positions for chilled products.

The storage facility at the FCZ, coupled with MISC’s Halal Express Service shipping route, makes MISC one of few companies truly capable of offering customers the entire value chain in halal logistics.

MILS has also formed a joint venture in Dubai, which will give it the opportunity to tap and strengthen the group’s connectivity and promote the halal capabilities of MILS logistics hub in Malaysia.

The hub can be seen as a bridge to Africa, the Middle East and Europe where the halal markets are huge.

Source: http://thestar.com.my/maritime/story.asp?file=/2009/5/4/maritime/3815066&sec=maritime, 04 May 2009

MMC hurt by low cargo volume

MMC Corp Bhd sees lower revenue contribution from its port business in Johor this year due to the drop in cargo volume, said chief executive officer Hasni Harun.

Both its ports in the state, Port of Tanjung Pelepas (PTP) and Johor Port, had been hit by the global recession, he said.

“Ports in the region have been experiencing a decline in volume of between 15% and 20% since the fourth quarter last year.

“There has been a spike in volume last month due to the replenishment of depleted inventories but it is premature to say whether this is sustainable.

“Subject to an improvement in consumer confidence globally, the situation may not lead to a long and deep downturn. It might improve in 2010 and we hope to maintain what we’ve achieved last year,” he told StarBiz.

PTP registered a container throughput of 5.6 million twenty-foot equivalent units (TEUs) last year, up 1.8% against 2007.

Johor Port handled 17.2 million freight weight tonnes of bulk and conventional cargo in 2008, representing a growth of 8% year-on-year, and recorded 934,767 TEUs of containers last year, an increase of 1%.

The two ports contributed 14% to MMC group revenue in 2008 compared with 20% in 2007.

Hasni said the decline in percentage of contribution from its ports despite higher revenue was due to the increase in Malakoff Bhd’s revenue contribution, resulting from the 12-month consolidation of Malakoff’s results last year versus only eight months in 2007.

“Based on the current slowdown, we expect the revenue contribution from our ports to also be lower year-on-year,” he said.

On capital expenditure (capex), Hasni said PTP planned to spend RM400mil to RM500mil this year, which is lower than the RM900mil spent last year, in line with the slowdown in business.

“This year’s capex includes for additional equipment at existing berths (berths 9 and 10), which will further increase the port’s operational efficiency, as well as for the ongoing construction of berths 11 and 12.

“We are making prudent decisions on capex and will equip berths 11 and 12 progressively as global shipping trade improves,” he said.

He added that Johor Port also expected to spend a lower amount of capex this year, primarily for maintenance works.

Going forward, Hasni said PTP’s value proposition was in its strategic location, unrivalled potential capacity growth, connectivity and competitive rates.

“These attributes will continue to make PTP an ideal choice for shipping lines, particularly those that are restructuring their routes and collaborating with other lines to minimise costs under the current economic scenario.

“Meanwhile, Johor Port focuses on high-value cargo and commodities in the bulk and break-bulk terminals,” he said.

Besides port operations, MMC has finalised the acquisition of Senai Airport Terminal Services Sdn Bhd (SATS) in Johor for RM1.7bil.

According to Hasni, having interests in ports and an airport allowed the company to achieve better integration between the two modes of transportation.

“PTP is recognised as an ‘airport within a seaport’ and this further enhances the inter-modal movement of cargo from ships to airplanes and vice-versa.

“The acquisition of SATS will expand MMC’s logistics business, in line with its vision to be a global utilities and logistics group,” he said.

SATS is currently undergoing an expansion, including the extension of its runway from 3,354m to 3,800m, which will accommodate fully-loaded long-haul cargo flights.

“An Aero-Mall is also being built, which will add 6,500 sq m, bringing the total outlet space to 8,500 sq m to cater for the growing population residing within easy access of the airport. The mall is scheduled for completion in the first quarter of 2010.

“The airport also has a cargo capacity of 80,000 tonnes per annum and offers bonded warehouse and warehousing facilities,” he added.

Hasni said SATS’ potential would be realised with the development of Senai Airport City into a regional cargo and logistics hub.

Works on Senai Airport City, with a gross development value of RM10bil, would commence towards the year-end and scheduled for completion by 2020, he said.

Source: http://thestar.com.my/maritime/story.asp?file=/2009/4/27/maritime/3769672&sec=maritime, 17 April 2009

Oil and gas getting more banks’ attention

An official with a foreign bank says there is still money available from banks for ship finance despite the current global economic slowdown.

SHIP financing is now skewed towards the oil and gas industry and Asian banks are showing more interest in the maritime sector, according to feedback from the Sea Asia 2009 maritime conference.

One revelation from a session in ship finance during the conference recently was the changing landscape of traditional ship financiers in terms of the amount currently being loaned to ship owners.

It was noted that of the top 30 banks in global ship finance last year, 16 had dropped out in the first quarter of this year and had been replaced by banks which had previously kept a low profile in the sector, said Paul Chang, head of shipping (Asia) and chief representative of Hong Kong representative office at HSH Nordbank AG.

Chang said Asian banks were increasingly attracted to the shipping sector and to ship finance.

“National shipping lines still had fewer problems securing finance from their own national banks, for example the close relationship between Taiwan banks and Taiwanese owners,” he said in a statement.

Dagfinn Lunde, a managing director at DVB Bank SE, said there was still money available from banks for ship finance.

“If you have the words ‘energy’ or ‘offshore’ in your project, even some US banks are still willing to lend,” he said.

Philip Clausius, president and CEO of FSL Trust Management, a Singapore-based listed shipping trust fund said: “Develop your relationships with Asian banks – every Asia-based borrower needs to achieve a balance between Western and Asian banks.

“As many Asian banks do not yet have as much experience in this sector, be patient and take small, slow steps,” he advised.

FSL now split 50:50 its borrowings for ship finance between Western banks and banks based in Asia, and this had worked well for them, he added.

Meanwhile, session chairman Harald Serck-Hanssen, the global head of shipping, offshore and logistics at DnB NOR bank, called on bankers to devise a new formula which would give borrowers (shipowners) the thing they need most – certainty.

Source: http://thestar.com.my/maritime/story.asp?file=/2009/4/27/maritime/3767480&sec=maritime, 27 April 2009

Selangor Freight Forwarders and Logistics Association (SFFLA)

THE Selangor Freight Forwarders and Logistics Association (SFFLA) is spearheading efforts to improve the level of professionalism in the industry via education and development of standardised regulations.

President Tan Ah Beng said the association would submit an application to the Government for a RM1mil grant to develop certificate and diploma programmes in logistics and freight forwarding.

“We are awaiting the endorsement from the Transport Ministry to be submitted together with our application. The grant is under the Government’s stimulus package for training.

“It will also be used to subsidise the fees of the programmes that will be offered to its members and the public, especially school leavers, at competitive rates,” he told StarBiz.

SFFLA also needed the grant to provide professional training for its members that would be responsible to teach the programmes, he added.

Selected members will be trained by representatives from the United Nations Economic and Social Commission for Asia and Pacific (Unescap) and the association also plans to use professional lecturers to teach some subjects.

SFFLA is working closely with Unescap in developing the modules and the association has bought a building equipped with educational facilities.

Besides that, it is also working on standard requirements and rules for the freight forwarding industry as there is no mechanism currently to govern the industry.

“According to the plan, all freight forwarders doing business in Port Klang must register with the Port Klang Authority,” Tan said.

“We will also come up with the standard requirement for a freight forwarding company in terms of paid-up capital and insurance liability.

“By doing this, it is hoped that the level of confidence of international clients will be strengthened when dealing with Malaysian freight forwarders.”

On the current business volume, Tan said the industry suffered about 20% fall last month year-on-year.

“But freight forwarders that had enjoyed good business growth of 7% to 8% in the last 10 years should be able to withstand the current downturn.

“In addition, the freight forwarding business belongs to the service industry which is not capital-intensive,” he said.

However, according to Tan, the logistics industry with assets in terms of warehouses and trucks might be hit harder by the economic slowdown.

He said the current situation could have been better if the country had strived harder to become the hub for transhipment and consolidation of cargo in the region.

“We cannot rely on our direct import and export volume alone as it accounts for only about three million twenty-foot equivalent units annually via Port Klang.

“Red tape and unnecessary charges are a hindrance to make Malaysia a conducive cargo hub,” he said.

Source: http://thestar.com.my/maritime/story.asp?file=/2009/4/20/maritime/3721025&sec=maritime, 20 April 2009

MASkargo offers discounts, cuts capacity to stay profitable

MALAYSIA Airlines Cargo Sdn Bhd (MASkargo) is offering discounts, reducing capacity and implementing various new initiatives to remain profitable in its current financial year ending Dec 31 (FY09).

The cargo arm of Malaysia Airlines has been suffering a cargo volume decrease due to the global economic downturn.

Shahari Sulaiman ... we plan to introduce new flights. Year-on-year, the company recorded a reduction in cargo volume of about 28% in January and February.

Its Penang operations also recorded close to 50% fall in volume for the first two months of this year.

Managing director Shahari Sulaiman said the terminal charges rebates for cargo transhipped via Malaysia Airlines Advanced Cargo Centre had been increased to 100% for air-to-air, land/rail-to-air, and sea-to-air transhipments from April 10 to September.

“With this initiative, we hope that freight forwarders would be able to increase their transhipment volume. A 5% month-on-month volume increase is already good,” he told reporters during a high-tea session with the media last Friday.

Transhipment cargo constitutes about 60% of the total volume handled by MASkargo at the KL International Airport (KLIA).

The company handled 353,000 tonnes of transhipment cargo out of a total cargo volume of 623,314 tonnes at KLIA last year.

In matching its capacity with the current slowdown in air freight volume, Shahari said MASkargo had reduced its flights out of Pudong International Airport, China, to four flights from nine a week.

“Pudong used to be our biggest station in terms of volume. However, due to the economic situation, we have to make some adjustments. We will start to pump in more capacity once the economy is back on track as China is expected to be the first country to recover from the crisis. We expect to benefit from this due to our large exposure there,” he said.

Overall, Shahari said MASkargo had reduced its freighter and belly capacity by 30% and 7% respectively this year.

“This is better than maintaining our previous capacity with ad hoc cancellations that will hurt our product branding and customers.

“Although there is a huge cut in our overall capacity, KLIA only recorded a 10% reduction in air freight capacity due to our obligation to support the industry in our country,” he said.

He added that any excess capacity would be channelled to do charter business.

“We recently deployed our A300 freighter previously catered to the Asean region to do charter business in the Middle East.

“We also have a 747 freighter in the Middle East to do charter business,” he said.

Shahari said MASkargo’s strategy to maintain a healthy bottom line also included new destinations with potential high cargo volume.

“We plan to introduce new flights to Lagos in Nigeria, Malmo in Sweden and Colombo in Sri Lanka,” he said.

Although hit hard by the challenging economic climate, MASkargo had not been complacent in beefing up its operations quality.

“Our mishandling rate had improved to 0.03% this year. We have installed 50% more CCTVs to upgrade our security level and are participating in the International Air Transport Association’s pilot programme in air freight security,” he said.

On the current economic downturn, Shahari believed that the situation had bottomed out for the air freight industry as he had seen some slow recovery since last month.

“I think we will need at least two years to return to our pre-economic crisis level,” he said.

MASkargo recorded a 1.9% fall in revenue to RM2.67bil in FY08.

Shahari said MASkargo still recorded profit for the period, but he did not disclose the figures.

“This year, we expect lower revenue growth for the first half and expect business to pick up in the second half,” he said. — BY SHARIDAN M. ALI

Source: http://thestar.com.my/maritime/story.asp?file=/2009/4/13/maritime/3678363&sec=maritime, 13 April 2009