WESTPORTS – Connects the World

 PROVIDING SEAMLESS LOGISTICS SOLUTIONS

 When Tan Sri G. Gnanalingam, Executive Chairman of Westports Holdings Berhad (Westports), envisioned building a container terminal in 1993, who would’ve known that it would one day grow into Malaysia’s largest container terminal and Southeast Asia’s second largest transhipment hub.

Westports has experienced tremendous growth over three decades. International Business Review explores the company’s latest performance as well as the company’s outlook on its future growth with Tan Sri Gnanalingam.

Growing Despite Global Headwinds

While Westports warned of slower container traffic growth in early January due to global headwinds, the re-opening of international borders and relaxation of COVID-19 restrictions around the world has seen the global supply chain returning to normalcy. Ports are now operating at pre-pandemic levels and containers are being shipped and gated out much faster.

However, there are still many uncertainties and headwinds that stand to affect the industry, from geopolitical tensions to higher inflation and interest rates, container volume throughout the Straits of Malacca in Q1 2023 has only reduced marginally.

“Westports achieved a single digit increase in our container volume in Q1 2023 compared to the same period last year and flat compared to Q4 2022. Our moderate growth in the Q1 2023 was mainly driven by the indigenous cargoes contributed by the new Regional Manufacturing Factories and Distribution Hubs whereas transhipment has rebounded as we were able to handle more vessel calls in Q1 2023,” disclosed Tan Sri Gnanalingam.

Revolutionising Port Operations

To fortify itself against the headwinds, Westports has embarked on a digitalisation journey and initiated many innovations to help its businesses and future growth.

Among the many innovative projects implemented, Westports launched the Remote Physical Check System (RPS), making it the first wireless physical check system in the world.

“We would have a total of 200 staffs, with 50 staff per shift, that will be required to physically verify container movement under each crane during vessel operations. This is a high-risk job with exposure to heavy vehicle traffic, pollution, and weather,’ said Tan Sri Gnanalingam.

When containers are unloaded from or loaded onto a vessel, it has to be verified at the wharf. The RPS eliminates the need to physically perform the verification process by using Video Analytic cameras installed on its ship-to-shore (STS) cranes. This initiative has reduced the total required manpower to 80 staffs needed by enabling remote working and improved productivity, safety, and health for the staff.

The RPS not only allows for remote verification process, but it also improves accuracy and cuts waste. The implementation of the system has also enabled the company to redistribute its staff to other areas of operations which has supported in the greater operational efficiency of Westports.

Another notable innovation was the digitalisation of the refer container monitoring in the yard when Westports introduced its Reefer Monitoring System (RMS).

Tan Sri Gnanalingam mentioned, “Previously, we would monitor the critical refrigerated containers every 6 hours physically in order to identify refrigeration issues.”

The RMS provides continuous remote management of refrigerated containers where it offers real-time visibility, accuracy, and alerts related to temperature changes, container monitoring, humidity, and CO₂ levels as well as remotely control each reefer container settings.

This has also furthered improved the security and safety of the work environment by reducing the physical presence of people and onsite checking in the container yard.

Changing the Game for Sustainability

In addition to innovating internally, Westports is also going above and beyond with the addition of the Port Reception Facility (PRF) to its facilities, which is set to be the first fully equipped and environmentally friendly PRF in Malaysia.

As vessels travel around the world, they produce marine waste during their voyages. Vessel operators are unable to keep marine waste for long periods of time due to the limited space on board. Nowadays, in order to discharge the marine waste, third-party vendors from outside the port are appointed.

“By building a PRF, vessel operators are given a better option to discharge, handle, and process their marine waste inside the port. The marine waste handling will be under the scrutiny of the Department of Environment and Port Klang Authority, which means the entire process will be transparent, efficient, and more importantly safer and environmentally friendly,” said Tan Sri Gnanalingam.

The PRF is equipped with its own wastewater treatment plant designed to treat wastewater from Bilge Tank, Ballast Water, and Scrubber wastewater. It is also designed with solar panels

and rainwater harvesting to minimise the carbon footprint and lower energy consumption, which is in line with Westports’ target of achieving net-zero carbon emission by 2050.

In addition, the construction of the PRF to handle marine waste inside the port adheres to the recommendation set by the International Convention for the Prevention of Pollution from Ships (MARPOL), which was adopted by the International Maritime Organisation (IMO).

“As Malaysia is a member state of the IMO, we are always committed to promote environmentally sustainable practice in the maritime industry and building PRF is a part of our commitments to IMO in ensuring safe and better maritime industry in the Region,’ said Tan Sri Gnanalingam.

The construction of PRF is timely not only for Westports but the entire Port Klang, as the port will be embarking on its expansion plan to increase its container handling capacity from 14 million TEU to 28 million TEU. As more vessels call at Port Klang, the PRF will be able to handle more marine waste in the future.

Expanding with Westports 2.0

The Ministry of Finance (MOF) has also granted Westports Malaysian Sdn Bhd (WMSB) a 10- year Investment Tax Allowance (ITA) that commenced from 1 January 2022 to 31 December 2031. The ITA is used to facilitate the capital expenditure (capex) to be incurred by WMSB with respect to existing and future expansion programmes.

The ITA was granted on the condition, among others, that WMSB incur a minimum of RM4 billion in capex to its terminals during the stipulated 10-year period. As part of the ITA, 50 percent of the qualifying capex incurred by WMSB within the stipulated 10-year period can be offset against its statutory taxable income for each year of assessment within the stipulated 10-year period.

Tan Sri Gnanalingam elaborated further, “The ITA will also facilitate our expansion plans under Westports 2.0, which entails the development of eight new terminals, CT10 to CT17, that will double our container-handling capacity to 28 million 20-foot equivalent units (TEUs), from 14 million TEUs currently. We are still in negotiations with the Public- Private Partnership Unit, the Ministry of Transport (MOT) and other relevant government agencies on the concession terms for Westports 2.0. The estimated total development cost of Westports 2.0 is approximately RM12.6 billion, which will take between 25- and 30 years to fully develop.”

Bright things are in store for Westports as Tan Sri Gnanalingam and his team lead the company to even greater heights. Through its efforts to enhance and improve, Westports is on the right track to improve its efficiency, productivity, and sustainability all while contributing to the growth of the regional economy.