KUANTAN, 7 SEPTEMBER 2013: The expansion of the Kuantan Port is expected to be the game changer in the positioning of the East Coast Economic Region (ECER) as a key investment and trading destination, as well as the ECER Special Economic Zone (ECER SEZ) as the Investment Gateway for the ASEAN, Asia Pacific and Far East markets.
Prime Minister YAB Dato’ Sri Najib Tun Abdul Razak said the Federal Government viewed the Kuantan Port Expansion as a top priority for Malaysia to ride the new wave of change that was sweeping across the world.
“The world is undergoing a dramatic shift in economic axis, from West to East, especially with the rise of China that is forecast to become the world’s largest economy in the next decade,” he said at the official launch of the Kuantan Port Expansion here today.
Kuantan Port is operated by the Kuantan Port Consortium, a joint venture between IJM Corporation Berhad and China’s Guangxi Beibu International Port Group (GBIPG). GBIPG operates four ports in the Guangxi Region, and the joint venture is expected to boost bilateral trade between Malaysia and China.
He added that Kuantan Port’s comparative advantage lies in its strategic location facing the South China Sea and it is also right in the middle of the busiest shipping lanes in the world. To the shipping community, this translates into significant cost savings, as well as a reduction in sailing time.
“Hence, the newly expanded Kuantan Port is well positioned to serve as a world class multi-purpose port for regional trade in ASEAN, the Far East and the rest of the Asia Pacific that has a total population of approximately 4 billion and a combined GDP of 17 trillion US dollars,” Najib said. The multipurpose Kuantan Port is being expanded to accommodate Cape-size bulk carriers and Post Panamax container vessels of up to 200,000 DWT, from the current capacity of 40,000 DWT ships. Its capacity will increase, from the current throughput of 16 million FWT to 52 million FWT of bulk and container cargo when the expansion is completed by the end of 2015.
“An upgraded and modernised Kuantan Port will also strengthen Malaysia’s positioning as one of the top trading nations of the world, with modern ports strategically located along its shores,” Najib said.
“We can also expect the Kuantan Port expansion to unlock the true value of the resource-rich ECER hinterland by attracting more investors to the region. These, in turn, will fast-track the growth of the local economy, ultimately benefitting the rakyat,” he added. The project is also expected to generate 8,650 job opportunities for the locals by 2020. Kuantan Port is located in the ECER Special Economic Zone (ECER SEZ), which is home to world-class industrial parks such as Pekan Automotive Park, Gebeng Integrated Petrochemical Complex, Kertih Biopolymer Park, Kuantan Integrated Biopark, Gambang Halal Park and Heavy Industrial Park and Kemaman Boat Building & Repair Park. Industries based here can leverage of the proximity of Kuantan Port for exports and imports.
The completion of the port expansion is forecast to attract more investments into ECER SEZ in particular, and ECER in general. Currently, ECER has attracted more than RM50 billion in investments and created about 40,000 jobs. Key players to date include BASF Petronas, Daimler Chrysler, Volkswagen, Kaneka, CJ ChieldJedang, Arkema, Gevo Inc and Huntman International who have invested in high value manufacturing industries destined for export markets. The port expansion is a Public Private Partnership project which involves the construction of a new 4.7-km long breakwater, one of the longest in the world, using state-of-the-art technology. The breakwater will be constructed to create a sheltered basin for the development of the new deep water terminal. The sheltered basin will allow for berths to operate safely and efficiently throughout the year.
The Federal Government is investing RM1 billion to build the breakwater, while the private sector, namely IJM Corporation Berhad and GBIPG will invest RM3 billion for capital dredging, reclamation works to create new development land, construction of new berths, operational buildings and facilities, equipment and machinery, as well as internal infrastructure.
Construction of the port breakwater by the Government through ECERDC already commenced in April 2013 and is targeted to be completed by end 2015, while the construction works by the Port Concessionaire will begin late 2013 and are targeted to be ready by end-2015.
The Kuantan Port of the future is the nucleus of a much larger development, namely the Kuantan Port City. It has already started to take shape on a 13,000-hectare site that will be transformed to become a vibrant logistics and industrial hub by 2020.
ECERDC Chief Executive Officer, Dato’ Jebasingam Issace John in his speech said, in addition to the oil, gas and petrochemical cluster, as well as other existing industries in the ECER SEZ, the port expansion will also turn Kuantan Port and Kuantan Port City into a hub of harbour-related industries. The Kuantan Port City envisions itself as a modern and efficient city, filled with commercial activities, educational institutions and residential areas that are able to cater to the needs of harbour-related industries and trade.
One of the critical projects identified for Kuantan Port City has already been completed by ECERDC, namely the Panching Water Treatment Plant. Panching Water Treatment Plant will produce 160 million litres of treated water daily which will cater to the needs of Kuantan and Kuantan Port City. “With the increased availability of uninterrupted water supply via the newly completed Panching Water Treatment Plant, coupled with the expansion of the Kuantan Port, Kuantan Port City is well positioned to receive more investors,” Dato’ Issace said.
Dato’ Issace, who was representing ECERDC, officially handed over the Panching Water Treatment Plant to the Pahang Menteri Besar, YAB Dato’ Sri Diraja Haji Adnan Haji Yaakob on behalf of the Pahang State Government, at today’s ceremony.
Kuantan Port is also the catalyst for development of the Malaysia-China Kuantan Industrial Park (MCKIP), the sister park of the China-Malaysia Qinzhou Industrial Park, whereby GBIPG is also a key investor in MCKIP.
“Both MCKIP and Kuantan Port Expansion projects are interlinked as the success of MCKIP is dependent on the expansion of Kuantan Port,” said Dato’ Issace.At today’s ceremony, the Prime Minister also witnessed the Exchange of Share Sales Agreement between Beibu Gulf Holding (Hong Kong) Co.Ltd and Road Builder (M) Holdings Berhad, a subsidiary of IJM Corporation Berhad.
Road Builder (M) Holdings Berhad was represented by their CEO & Managing Director of IJM Corporation Berhad Dato’ Teh Kean Ming while Beibu Gulf Holding (Hong Kong) Co., Ltd. by Mr. Ye Shi Xiang the Chairman of Guangxi Beibu Gulf International Port Group Co., Ltd.