Westports acquires land as first step towards Port Klang expansion

Ships unloading containers and cranes in Port Klang, Malaysia. Credit: Getty Images/Mario Eduardo KOUFIOS FRAIZ

Westports Holdings’ wholly owned subsidiary, Westports Malaysia, has bought a 146.4 ha land plot in Klang, Selangor, for MYR393.96 million (USD94.04 million) from its major shareholder, Malaysian port operator Pembinaan Redzai, to develop eight additional container terminals in its Port Klang concession.

Developing the eight new terminals is estimated to cost about MYR10 billion.

Malaysia’s Port Klang Authority (PKA) recently said that through terminal operator Westports Holdings, it plans to expand capacity.

At a press briefing, PKA general manager K. Subramaniam said Port Klang has reached 70% of its capacity and needs to expand in order to maintain Malaysia’s largest port’s position as the world’s 12th busiest container port.

Subramaniam said, “Port Klang’s current container handling capacity is 19.5 million teu, and between January and November 2020, we had reached 12.3 million teu.”

PKA estimates that the port handled 13.5 million teu in 2020 and thus, there is a need to increase Port Klang’s capacity.

Pembinaan Redzai owns a 42.42% direct stake in Westports, which is listed on Bursa Malaysia. Hong Kong-based Hutchison Ports, part of magnate Li Ka-shing’s empire, has a 30% stake.

Westports executive chairman G. Gnanalingam is also a director and substantial shareholder of Pembinaan Redzai.

The company said, “Westports’ current terminal facilities, comprising Container Terminal 1 to 9, are operating at a utilisation rate of approximately 77% of its total terminal handling capacity and Westports Group expects its current CT facilities to reach near full utilisation within the next few years.”

As part of Westports’ proactive management strategy, it intends to undertake periodic upgrading of its terminal capacity to meet the expected rise in volumes, as well as to remain competitive.

Currently, Westports is installing additional terminal handling equipment at Container Terminal 9.

Westports said, “Beyond Container Terminal 9, Westports Group is also planning for the expansion of its terminal facilities by developing eight additional berths comprising Container 10 to 17 (proposed expansion), to support the expected long-term growth in the coming decades.”

Pending government approval, expansion works are proposed to begin in 2021 and are estimated to take 25 years to complete.

“Westports Group intends to fund the purchase price through internally generated funds and/or bank borrowings,” Westports said.

Subramaniam added that plans to expand Port Klang’s capacity by developing Carey Island are still on the table.

Malaysia’s transport ministry has earmarked the offshore Carey Island for a future development project that will take Port Klang’s annual handling capacity to 30 million TEU. This is part of a wider scheme to link up Port Klang with Kuala Lumpur, in conjunction with the East Coast Rail Link, a joint project between Malaysia and China as part of the latter’s Belt and Road scheme.

Subramaniam said that a feasibility study of the Carey Island project began in August 2019 and will take 18 months to complete.

“It is a long-term project, and our aim is to develop Westport first,” he said.