Role of Malaysian Ports & Chinese Ports in realizing Maritime Silk Road initiative

Presented by: Dato’ Sri Che Khalib Mohamad Noh Group Managing Director, MMC Corporation Bhd MMC PORTS: YOUR STRATEGIC MALAYSIAN GATEWAY TO CHINA

Penang Port . Capacity: 2.0mil TEUs . Handled: 1.26mil TEUs in FY2014

2 : TRANSSHIPMENT HUB

No. 1 No. 2 No. 18 10,000 Geographical Advantage & CONTAINER PORT IN SOUTHEAST IN THE WORLD VESSEL CALLS Global Connectivity IN ASIA PER ANNUM

. 70: 30 Joint venture with APM Terminal, part of Group – the largest liner in the world.

. Revenue has grown from RM448 mil in 2008 to RM1,043 mil in 2014.

. PTP handled 8.5 million TEUs in 2014, an increase of 11.7% YoY.

. PTP currently has 14 berths forming 5.04 km of liner wharf.

. Current capacity has increased to 10.5 mil from 8.5 mil TEUs. Quay crane facility have similarly increase to 55 from 44 in 2013.

. 2M alliance. A 10-year Vessel Sharing Agreement (VSA) between Maersk Line and MSC with over 180 vessels. . Positioned just 45 minutes from the crossroads of the world’s busiest shipping 9.8 lanes and located at the southern tip of 8.5 9.2 Peninsular Malaysia 7.5 7.7 7.6 6.5 . Over 120 vessel calls per week, connecting 5.5 5.6 6.0 4.8 to over 300 ports worldwide. 3.5 4.0 4.2 2.7 2.0 . Daily coverage to Europe, Far East and South East Asia/Intra-Asia

. Multiple sailings to USA, Oceania, Africa, Middle East and Indian Sub-continent

3 PORT OF TANJUNG PELEPAS: AMONGST THE WORLD’S LARGEST

Malaysia Chinese ports represent 7 out of TEU, in mil 2013 2014 the top-10 ports in the world PTP 7.62 8.52

Westports 7.47 8.37

Northport 2.88 2.57 35.3

33.9 33.9 Penang Port 1.24 1.30

Johor Port 0.76 0.79

24.0 Others 0.91 1.18

22.3

19.4

18.7 Total 20.88 22.73

16.6 16.4

15.2

14.1

12.3

10.9

10.6

10.1

9.7

9.0 8.6 8.5 8.5

8.3

6.8 6.6 6.5

5.8 5.8 5.8 5.4

5.0 5.0 4.9

4.6

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Dubai Busan Tokyo Dalian Tianjin Xiamen Bremen Yingkau Antwerp Qingdao Colombo Algeciras Shanghai Hamburg New York Shenzhen Port Klang Kaohsiung Rotterdam Hong Kong Hong Guangzhou Long Beach Long Ho Chi Minh Lianyungang Tanjung Priok Laem Chabang Ningbo-Zhoushan Port of Los Angeles Port Tanjung of Pelepas

4 CONTAINER TERMINAL - GLOBAL CONNECTIVITY

. 30 shipping lines calling PTP . Connected to more than 200 ports globally with more than 100 weekly services

2014 Volume Sailing frequency Route (TEUs) Frequency Route South East Asia 2.54 mil (per week) Far East Asia: 1.66 mil Intra-Asia 49 Europe/Mediterranean 11 - China 0.51 mil India Sub Continents 5 - Japan, HK, Taiwan 1.15 mil

Middle East/Red Sea 2 South Asia 0.42 mil Africa 13 US 5 South America 2 Australasia (Oceania) 4

5 PORT: MALAYSIA’S SOUTHERN GATEWAY

World's largest Ranked 7th in the world in terms of Capitalizing on the transportation of London Metal Exchange volume commodities and industrials palm oil terminal

. JPB have a designed capacity of 40 mil MT with 24 berths spanning 4 km.

. Volume handled in 2014 was 27.3 mil MT, up 1.3% YoY.

. Revenue has been stable, growing from RM473 mil in 2006 to RM603 mil in 2014.

. World's largest palm oil terminal - Storage capacity of 460,000 MT.

. Located at Industrial Estate, which provides a comprehensive range of industries specialising in petrochemicals, engineering, furniture, telecommunications, electronic good and food products among others.

. Located at the southern-most tip of Throughput 27.0 27.3 Peninsula Malaysia, is strategically 25.6 26.3 25.9 positioned in the heart of the sprawling 10.0 10.5 9.4 9.9 9.5 8,000-acre Pasir Gudang Industrial Estate

10.8 11.6 10.6 10.6 11.1 . Johor Port is linked to important commercial

Million FWT Million and industrial centers in Malaysia as well as 5.3 other ports and neighbouring countries 1.2 3.7 1.2 4.1 1.2 4.6 1.1 0.9 4.8 2010 2011 2012 2013 2014 . Linked to the nation's road infrastructure and Breakbulk Drybulk Liquid Container rail connections

6 JOHOR PORT REGIONAL SHIPPING CONNECTIVITY

2014 Container Route Volume (‘000 TEUs) Sailing frequency South East Asia 342.6 Frequency Route (per week) Far East Asia: 183.0 Intra-Asia 12 - China 58.5 Domestic 5 - Japan, HK, Taiwan 124.5 Feedering Singapore 19 South Asia 39.4

CHINA & TAIWAN Shanghai, Ningbo, Dalian, Xingang, Yantian, Qingdao, Huangpu, Nansha, Shekou, Hong Kong, Xiamen, Keelung, Kaohsiung,

Taichung JAPAN & KOREA

SOUTH ASIA

Middle East and South Africa

S.E. ASIA

7 NORTHPORT: ACCESS TO KLANG VALLEY’S RICH HINTERLAND

Amongst the largest multi-purpose ports in Malaysia

. Situated in Port Klang, Northport provides both conventional and containerized cargo handling facilities.

. Northport offers dedicated facilities and services to handle wide variety of cargoes ranging from containers to cars, break bulk cargoes as well as capacity to handle liquid and dry bulk cargoes of all types and shipment sizes

. Its container terminal have an annual capacity of 5.6 mil TEUs, with 12 berths spanning over 3 km in quay length.

. Northport is undergoing an expansion program to push its installed capacity to 6.2 mil TEUs by 2016.

Container Volume Conventional Volume 9.84 3.3 8.23 8.28 3.2 3.0 7.75 2.9 7.21 2.6 1.4 1.4 1.3 1.3 1.2

1.9 1.8 1.7 Million FWT 1.6 1.4 TEUs, mil TEUs, in

2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 Local Transshipment

8 NORTHPORT: REGIONAL CONNECTIVITY

Sailing Frequency Route (per week) Intra-Asia 17 Asia/Africa 3 Australia 2 Gulf/Middle East 2 Indian Subcontinent 8 2014 Container ('000 TEU) % Throughput China 455.1 17.7% Malaysia 464.6 18.1% India 314.8 12.2% Japan 162.8 6.3% Indonesia 119.6 4.6% South Korea 147.9 5.7% Taiwan 110.8 4.3% Vietnam 79.8 3.1% Hong Kong 95.7 3.7% Thailand 94.4 3.7% Others 528.4 20.5% Total 2,573.9

9 PENANG PORT: GATEWAY TO MALAYSIA’S NORTHERN HINTERLAND

. Penang Port is fully equipped to handle all types of cargo such as container, liquid, dry bulk and break bulk. Gateway for northern region

. The port has grown rapidly and capable to handle over 30 mil FWT of cargo. Its container facility currently stands at 2 mil TEUs annually.

. Volume handled in 2014 was 30.0 mil FWT.

. Container handling is the core operation with the North Butterworth Container Terminal (NBCT) being the fulcrum for it.

. It is equipped with 6 berths (N1 to N6) that is 1.5 km in length, equipped with 13 quay cranes and 32 RTG cranes.

Throughput 30.1 30.0 . Located in the state of Penang, in the north-

west of Peninsula Malaysia, it is the oldest 29.4 29.3 and longest established port in Malaysia

28.8 . FWT, in mil Supported by nearly 30 shipping lines/agents

. Gateway port to its hinterland of North Malaysia and Southern Thailand 2010 2011 2012 2013 2014

10 MALAYSIAN PORTS: NATURALLY COMPLEMENTS CHINA’S STRENGTHS

7 out of 10 busiest container ports in the world are located in China

No.1 shipbuilding nation in the world

3 Chinese shipping companies are among the 12 largest container transporters 3rd World’s largest ship-owners after Greece and Japan

Malacca Straits records about 80,000 vessels per year Shortest distance linking China Mainland to Indian Subcontinent

Natural deep waters, sheltered from adverse weathers

Major ports are well equipped to accommodate the largest vessels

ASEAN hub for 2M & o3 alliances

11 MALAYSIA-CHINA: STRONG ECONOMIC RELATIONSHIP

1,449 1,309 1,369 1,168 1,272

14% . China is the world’s biggest 11% 13% 14% 15%

RM billion RM exporter, contributing to more 128 167 181 203 208 than 10% of global trade

2010 2011 2012 2013 2014 . Malaysia is China’s 3rd largest trading partner in ASIA and 1st Total trade Total trade - China in ASEAN

Major Trading Partners (RM bil) . China is Malaysia’s biggest trading partner 40.3 Thailand 39.7 . China’s investment in Japan 82.7 54.8 Malaysia grew to about USA 64.4 RM6.4bil in 2014 from 52.3 RM35mil in 2008 108.8 Singapore 85.7 92.4 China 115.5

Export Import

12 ROLES FOR PORTS: ENSURING SUSTAINABILITY OF THE SILK ROAD

To provide infrastructure and services to facilitate international trade Shenzhen

To continuously improve productivity levels to accommodate trade growth

To consolidate trade cargoes at preferred Ho Chi Minh and strategic ports

To play a major role in multi-model Port Klang logistics, linking hinterlands to ports Port of Tanjung Pelepas & Johor Port Strategic partnerships and continuous engagement – technology, marketing, Tanjung Priok best practices

13 CONTINUED GROWTH IN BOTH REGIONS TO INCREASE OPPORTUNITIES

Throughput vs Capacity Growth (2013 – 2018) . Strong throughput growth is expected to Top Terminals: Berth productivity 2014 continue in both China and South East Asia Global Total 5.6 APM Terminals 3.3 over the next few years (Drewry Report 2014) 186 Yokohama North America 3.3 . 1.8 Opportunities for joint investment in the Tianjin Port Pacific 142 building of port capacity in South East Asia 4.1 Europe 2.6 . Currently, ports BOT projects are typically Qingdao Qianwan 136 5.1 South East Asia 3.0 done via a consortium of main port operators Tianjin Port Alliance 136 7.6 . MoU for potential collaborations in Greater China 4.0 operations, engineering, marketing and DP World 131 Throughput Growth (%) information technology Capacity Growth (%)

Consortium between IJM & Beibu Gulf Holdings (HK) to invest RM3 bil to expand Kuantan Port, increasing capacity to 52 mil FWT.

China investment of RM43 bil in the Malacca Kuantan, Pahang Gateway Project, with a total land area of 246ha. The project will consist of a deep-sea port and ocean park, expected to be completed in 2025 Melaka

14 AMONGST THE MAJOR GLOBAL PORT OPERATORS

82.9

65.0 60.0 FY2014) 38.3 34.8 MMC Ports Mil TEUs TEUs Mil

( 19.0 17.0 14.5 10.7 9.7 9.4

1 2 3 4 5 6 7 8 9 10 11

Note: Aggregated volume based on total container volume handled by PTP, Johor Port, Penang Port, North Port and Red Sea Gateway Terminal

15 JOINT OPPORTUNITIES

Opportunities:Opportunities:

THAILAND  MajorMajor C Chinesehinese shipping shipping lines lines to to FormForm alliances alliances and and establish establish regionalregional hubs hubs in in Malaysia Malaysia .Penang Port  PotentialPotential JVs JVs for for regional regional port port MAJOR TRADE developmentsdevelopments LINE  PotentialPotential collaborations collaborations in in operations,operations, engineering, engineering, marketing marketing 03 Alliance @ Westport andand information information technology technology . CMA CGM . China Shipping . . United Arab Shipping North Port

2M Alliance @ PTP Johor. Port . Maersk PTP . SINGAPORE . MSC

16 Thank You

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