Can you provide an overview of Kuantan Port, one of the largest ports on the east coast of Malaysia?

Certainly! Kuantan Port is a multi-purpose port located on the east coast of Malaysia, facing the South China Sea. It serves as an important shipping route between Malaysia and China due to its strategic location. The port is operated by Kuantan Port Consortium Sdn Bhd, with a 60% ownership by publicly listed IJM Corporation and 40% by Beibu Gulf Port Group, a China state-owned enterprise. What sets Kuantan Port apart is its excellent connectivity, not only through rail, road, and air networks but also its proximity to dedicated industrial areas. One such area is the Malaysia-China Kuantan Industrial Park (MCKIP), spread over 3,000 acres of land. It is the first joint development of its kind between Malaysia and China. MCKIP is majority-owned by Malaysia Consortium (51%), with the remaining 49% owned by China Consortium. Additionally, the Gebeng Industrial Park, located just five kilometers away from Kuantan Port, is home to a cluster of chemical players.

We understand that Kuantan Port received its deepest and heaviest vessel in 2022. Could you provide more details about the port’s expansion?

 Kuantan Port operates two terminals: Kuantan Port 1 and the New Deep-Water Terminal (NDWT). Over the years, the port has undergone expansions to increase the number of berths and their draught, allowing it to accommodate larger vessels. As a result, Kuantan Port can now handle supersize vessels with draughts of up to 16.5 meters. In October 2022, the port made a significant achievement by welcoming the deepest and heaviest vessel ever to call at Kuantan Port. This vessel had a draught of 16.4 meters and a capacity of 180,000 tons.

What opportunities exist for increasing containerization at Kuantan Port?

Currently, approximately 90% of Kuantan Port’s business is non-containerized, with about 40% attributed to dry bulk and the rest to liquid bulk. The revenue from liquid bulk is slow and yields low margins. However, Kuantan Port has substantial potential for containerization by leveraging the captive market in Malaysia. Malaysia imports raw materials and exports finished goods, with over 50% of finished products being transported via containers. To capitalize on this potential, Kuantan Port plans to build a new, deeper container terminal for finished goods as part of its Phase 2 development. The port is in discussions with a Middle Eastern company interested in exploring the role of Kuantan Port in connecting the subcontinent with the Middle East and East Africa across the Indian Ocean, particularly focusing on the food supply chain. Malaysia’s tropical climate and agricultural capabilities in Pahang make it an attractive destination for agriculture-related investments, as various global investors seek to enhance the security of the global food supply chain.

Why is diversification important for Kuantan Port?

Diversification is crucial for Kuantan Port due to its heavy reliance on Chinese trade, which makes up nearly 50% of its business. The port experienced operational impacts during the lockdowns due to its close ties with China. To mitigate such risks, Kuantan Port offers services for liquid bulk, dry bulk, and containers, catering to different types of chemicals, minerals, and consumables. Currently, the port mainly imports iron ore and coal from Australia. However, it lacks a gas platform and is exploring opportunities in the area of new fuels, such as bio-methanol, in collaboration with Romanian investors.

What are the main advantages offered by Kuantan Port?

Kuantan Port provides several advantages for businesses. Firstly, it offers ample space, coupled with lower labor costs, compared to the more populous and expensive west coast of Malaysia, where the country’s largest port is located. With fewer people residing in Kuantan, it presents an opportunity for investors to shift their focus from the congested west coast to the more affordable and accommodating east coast. Additionally, Kuantan Port benefits from its strategic location for conducting business with the Far East. Clients can expect a capable and flexible team at Kuantan Port, providing tailored services, including on-dock depot and maintenance for containers, speed gates for dry bulk operations, and enhanced physical and IT security measures for all customers.