Penang Port to expand container handling capacity, cruise operations

February 25, 2018 | By | Reply More

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PENANG: Penang Port Sdn Bhd has allocated RM180 million capital expenditure (capex) this year, mainly for operations at the North Butterworth Container Terminal (NBCT). 

Container operations – the core business of the country’s oldest port – bring in about 68% of its total revenue.

Penang Port CEO Sasedharan Vasudevan said the container terminal would be expanded to increase its handling capacity to 2.8 million to 2.9 million 20-foot equivalent units (TEUs) annually, from the current two million.

“We have not filled up the two million TEUs capacity (yet), but we have to start the works now in order to meet future demand. And the 2.8 million TEUs (capacity) is basically to cater for the future,” he told reporters during a media familiarisation trip to Penang Port recently.

Sasedharan said the port recently received approval for its capacity expansion plans and expects to begin construction by the third quarter of this year. The project is expected to be completed within 18 months to 20 months.

Last year, Sasedharan said, the port spent between RM30 million and RM40 million capex, mainly for the purchase of yard equipment.

This year, the port aims to hit 1.6 million TEUs, or 5% growth, compared with 2017. The port’s container volume increased by 6% to 1.52 million TEUs last year from 1.4 million TEUs in 2016.

Sasedharansaid the port believes that if the growth trend continues, it will hit 2.2 million or 2.3 million TEUs by the next four to five years.

Additionally, the port is planning to expand its cruise operations at Swettenham Pier Cruise Terminal (SPCT), under its joint venture with American cruise company Royal Caribbean Cruises Ltd, to support the port’s future growth.

Sasedharan said the port will invest about RM155 million to expand the berth and increase the size of the cruise terminal to handle up to 12,000 passengers at one time from 8,000 currently.

Sasedharan said although cruise operations constitute only about 5% of the port’s business, the sector recorded 20% growth last year.

He added that SPCT’s total cruise passengers grew 20% last year to 1.22 million passengers, from 1.02 million in 2016.

Penang Port, which is managed by MMC Port Holdings Sdn Bhd, contributed 20% to 30% revenue to the MMC group in 2017. MMC operates three other major ports in Peninsular Malaysia – Port of Tanjung Pelepas, Johor Port and Northport in Port Klang.

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