PENANG FREE PORT: Reality of Myth? Symposium of Technology Management, Operations & Logistics (SIPTIK) V 2013

Dr. Muhammad Subhan DEPARTMENT OF INTERNATIONAL BUSINESS, UUM

22 April 2013

 Current position of Penang Port  Free port opportunity  Discussion

 Conclusion

Where are we now?  What is the current position of Penang Port in the global maritime industry? • Domestic? • Regional? • International?

Container Throughput in Top-4 Port in Malaysia, 2012 (in TEUs)

Total: 9,933,634

Total: 1,165,733

Total: 801,058

Total: 7,493,806

CS Report 2010

CS Report 2012

Latest CI Report on East and SE Asian Ports (2013) Other Asian Ports exclude China

China

Penang Port position among its neighboring ports According to CS Report 2010 (data 2009), from Top 100 world busiest ports: 1. 2. 3. 4. 5. 6.

Singapore (1) Port Klang (13), Tanjung Pelepas (17), Penang (100) Port of Laem Chabang (20), Bangkok (84) Tanjung Priok (26), Tanjung Perak (58) Ho Chi Minh (29) Manila (33) Sumber: Cargo Systems (2010)

Top 10 World Busiest Port in 2013 (My Prediction in 2012) 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Shanghai Singapore Hong Kong Shenzhen Busan Guangzhou Ningbo Jebel Ali, Dubai Qingdao Tianjin

(Reality in 2013) 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Shanghai (32,5) Singapore (31,6) Hong Kong (23,1) Shenzhen (22,9) Busan (16,9) Ningbo (16,1) Guangzhou (14,5) Qingdao (14,5) Jebel Ali, Dubai (13,3) Tianjin (12,3)

Top 10 Busiest Port in 2013  The only port in Europe (Rotterdam)  out from the top 10 busiest ports list in 2013.  8 of 10 busiest ports are from East Asia, 1 from Southeast Asia, and 1 from Middle East. Prediction:  East and Southeast Asian ports will dominate top-10 world busiest port in 2014.

OPPORTUNITIES   

    



Strategic location International commercial fleet route Resources Market size: production and consumption Government support Private involvement/support Maritime industry development Future scenario Others

Position of Penang Port in Global Map

Norway Denmark England

Germany

United States of America

Russia

Korea Japan China

Egypt

Middle East

Africa

Taiwan India Thailand Vietnam Penang Philippines Srilangka

Malaysia

Singapore Indonesia

South America South Africa

Australia

New Zealand

WORLD POPULATION DISTRIBUTION 2012 China: 1,347m

Japan: 128m

Indonesia: 238m

ASEAN: 603m India: 1,241m

ASIA: 4,216m

Current world population (2012) has exceeded 7 billions (7,058,000,000) where about 50% living in the yellow circle region.

POPULATION ESTIMATION OF ASEAN MEMBERS BY 2050 (IN ‘000) 2010

2011

2012

2013

2020

2025

2030

2040

2050

Indonesia

239,871

242,326

244,769

247,188

262,569

271,851

279,659

290,223

293,456

Philippines

93,261

94,852

96,471

98,113

109,742

118,088

126,321

141,675

154,939

Viet Nam

87,848

88,792

89,730

90,657

96,355

99,335

101,483

104,047

103,962

Thailand

69,122

69,519

69,892

70,243

72,091

72,884

73,321

72,994

71,037

Myanmar

47,963

48,337

48,724

49,120

51,688

53,194

54,331

55,410

55,296

Malaysia

28,401

28,859

29,322

29,787

32,986

35,186

37,266

40,800

43,455

Cambodia

14,138

14,305

14,478

14,656

15,893

16,687

17,363

18,361

18,965

Laos

6,201

6,288

6,374

6,459

7,045

7,429

7,754

8,187

8,384

Singapore

5,086

5,188

5,256

5,301

5,597

5,801

5,978

6,145

6,106

Timor-Leste

1,124

1,154

1,187

1,224

1,510

1,744

1,989

2,487

3,006

399

414

422

429

478

513

547

607

658

593,415

600,033

606,627

613,176

655,953

682,713

706,011

740,936

759,263

Brunei Darussalam TOTAL

By 2025:  

  

Population of ASEAN Population of China Population of India Population of Japan Population of Asia

Source: UNCTAD Statistics 2012

: 682,9 millions : 1,39 billions : 1,46 billions : 122,8 millions : 4,51 billions = 56% of world population

SOME FACTS OF NEW SHIPPING AND PORT DEVELOPMENT FOR PENANG FREE PORT Requirement for vessel draft at the Malacca Straits: 21.9 meter Every day, tankers in the Malacca Straits bring about: 18% of total world oil supply (43 million barrels/day) Every day, containerships in the Malacca Straits bring about: 28.7 million TEUs Vessel traffic volume in the Malacca Straits: >75,000 ships/year (2011) Giant Vessels  i.e. The biggest containership: Emma Maersk (Length: 497 meter; draft: 14 meter: TEU: 15.000) Current construction of containership: 18.000 TEUs Future development of containership: 21,000 TEUs

Regional setting of the Straits of Malacca

Neighboring Ports

um

WORLD FLEET CONDITION (DWT)

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2011

2012

822,011

841,735

863,667

907,474

965,006

1,042,328

1,117,779

1,192,317

1,276,137

1,395,743 Jumlah 1,534,019

103,392

104,305

286,001

308,683

320,658

340,748

356,109

382,975

407,881

418,266

450,053

474,846 Kapal Tanker 507,454

11,092

11,214

294,780

296,140

308,935

325,666

349,721

367,542

391,127

418,356

95,693

96,457

94,331

91,827

96,392

100,934

105,492

108,881

456,623 532,039 Kapal Bulk 622,536 World 108,232 108,971 Kapal Kargo 106,385 Umum

77,329

83,281

91,621

100,226

112,702

128,321

144,655

161,919

169,158

68,208

57,173

48,122

49,007

52,249

62,554

68,624

84,895

92,072

8,954

9,816

21,399

20,530

183,859 Kapal Kontainer 198,002

4,897

5,012

96,027 Lain-lain 99,642

57,049

57,733

Source: UNCTAD Statistics 2012

ASEAN VS. GLOBAL THROUGHPUT (IN TEU) 2009

2010

Singapore

30,891,200

26,592,800

29,178,500

Malaysia

16,093,953

15,922,800

18,267,475

Indonesia

7,404,831

7,255,005

8,482,636

Thailand

6,726,237

5,897,935

6,648,532

Viet Nam

4,393,699

4,936,598

5,983,583

Philippines

4,471,428

4,306,965

4,947,039

Cambodia

258,775

207,577

224,206

Myanmar

180,000

163,692

190,046

90,366

85,577

99,355

Total ASEAN

70,510,489

65,368,948

74,021,373

Total Dunia

516,255,115

472,273,661

540,693,119

Brunei Darussalam

For 2010:  ASEAN  China only  China+Taiwan+Hongkong  India  Singapore

: 14% of global throughput : 24,1% of global throughput : 30,79% of global throughput : 1,8% of global throughput : 5,4% of global throughput

Sumber: UNCTAD Statistics 2012

2008

REAL GDP IN ASEAN (IN MILLION US DOLLARS) 2008

2009

2010

Indonesia

510,229

539,356

707,448

Thailand

272,578

263,711

318,850

Malaysia

222,574

192,917

237,797

Singapore

189,384

183,332

222,699

Philippines

174,195

168,335

199,591

Viet Nam

91,094

97,180

103,902

Myanmar

25,859

32,805

42,027

Brunei Darussalam

14,394

10,733

13,024

Cambodia

10,352

10,402

11,272

5,285

5,585

6,496

562

704

794

61,232,771

57,960,080

63,063,973

Lao People's Dem. Rep. Timor-Leste Dunia

Source: UNCTAD Statistics 2012

GDP VS. THROUGHPUT IN ASEAN 2008

2009

2010

Indonesia

510,229

539,356

707,448

Thailand

272,578

263,711

318,850

Malaysia

222,574

192,917

237,797

Singapore

189,384

183,332

222,699

Philippines

174,195

168,335

199,591

Viet Nam

91,094

97,180

103,902

Myanmar

25,859

32,805

42,027

Brunei Darussalam

14,394

10,733

13,024

Cambodia

10,352

10,402

11,272

5,285

5,585

6,496

562

704

794

61,232,771

57,960,080

63,063,973

Lao People's Dem. Rep. Timor-Leste Dunia

2008

2009

2010

Singapore

30,891,200

26,592,800

29,178,500

Malaysia

16,093,953

15,922,800

18,267,475

Indonesia

7,404,831

7,255,005

8,482,636

Thailand

6,726,237

5,897,935

6,648,532

Viet Nam

4,393,699

4,936,598

5,983,583

Philippines

4,471,428

4,306,965

4,947,039

Cambodia

258,775

207,577

224,206

Myanmar

180,000

163,692

190,046

Brunei Darussalam

90,366

85,577

99,355

Total ASEAN

70,510,489

65,368,948

74,021,373

Total Dunia

516,255,115

472,273,661

540,693,119

Source: UNCTAD Statistics 2012

Berth Depth Comparison: Penang and its Neighboring Ports Port Name

Laem Chabang Port Klang Tanjung Pelepas Penang Singapore Tanjung Priok Belawan Sabang Krueng Geukueh Malahayati

Country

Quay alongside Depth

Thailand Malaysia Malaysia Malaysia Singapore Indonesia Indonesia Indonesia Indonesia Indonesia

16 meter 15 meter 16-19 meter 10 meter 15-19 meter 14 meter 9 meter 22 meter 10 meter 9 meter

Discussion Port as corporate (NOT infrastructure) Maritime area

Maritime area: - National - International

New opportunities for port services

Sea side area of port

Sea side services

Land operational area of port

Land operational area services: - Cargo handling - Storage & cargo processing

Value-added service by port Physical domain of port infrastructure New Port Service Domain

Port as a corporate in transport/supply chain system Source: Subhan, M

Land side

Hinterland Transportation

New business opportunities for port

Cargo Flow Segmen Laut

Shipping Wharve Pelabuhan

Terminal - Stacking - Penggudangan Kastam

Free Port Zone (FPZ)

Free Trade Zone (FTZ) And Free Industrial Zone

Depot Logistik

Multimodal transport to hinterland

Hinterland

Cargo flow through a port in FPZ Source: modified from Subhan & Ghani (2008)

- Model 1 Sea side Inbound (import)

Outbound (export)

Port Cargo Transfer

Import

Domestic Demand

Hinterland

Export Local Distribution

Production Center

Port with Export & Import Activity (Model 1) Source: Subhan, M.

- Model 2 Sea side

Outbound (export + reexport)

Inbound

Port Processing

Import

Local demand

Reprocessed product

Raw material to process

Local Distribution

Export

Production Center

Hinterland Port for Export-Import with Processing and Re-export Activities (Model 2) Source: Subhan, M.

- Model 3 Sea side Transhipment/hub

Re-export

Inbound Outbound

Port Process & Transfer

Stack & Transfer

Hinterland Local demand

Port Development with Transshipment/hub Demand (Model 3) Source: Subhan, M.

- Model 4 Sea side

Reexport

Outbound

Import

Inbound

Transhipment Export

Port Process & Transfer

Stack and Transfer

Hinterland Import

Local demand

Re-processed product

Raw material to process

Local distribution

Export

Center of production

Combined Model for Port Development (Model 4) Source: Subhan, M.

To conclude  Technically and economically, it’s feasible to have the free port status.  Some questions for further discussion: • Benchmark needed? Langkawi or Labuan? Others… • Area covered? The island or the state? • Free definition? 100% free or limited (80% or others), all products and activities or certain products or activities? • Beyond the zone? Any restriction?

End of Presentation Terimong Geunaseh Beurayeuk That