Home' Ships and Shipping : August 2009 Contents Maritime Venture (GMV) was formed in 1994 to act as a catalyst to
the maritime sector by forming strategic alliances with Malaysian
partners involved in the maritime sector.
In addition to shipping activities, Malaysia also has several
shipyards of international class, albeit limited in their building
capacity. Generally, they have a maximum building capacity of
around one million DWT, with the majority dedicated to ship repair.
This inadequacy continues to force local shipping companies to
purchase vessels and commission major reparation works from
foreign shipyards. The biggest shipyard, Malaysian Marine & Heavy
Engineering became a subsidiary of MISC in 2004, marking a huge
leap forward in taking the industry to greater heights.
Malaysia can rightfully boast of having a shipping sector, which
is internationally competitive and capable of leveraging on the
strengths that the country has in maritime transport, shipping and
other supporting activities. But despite the steady growth of its
national fleet and the shipping sector over the years, Malaysia still
has some way to go towards achieving self-sufficiency in shipping.
The government's commitment to promoting commercial
shipping in Malaysia is underlined by the many fiscal, financial,
administrative and legislative efforts it has taken. In promoting local
commercial shipping, the government offers attractive financial
incentives to shipping players, including: tax exemption on income
derived from activities involving Malaysian ships, applicable only to
Malaysian residents; tax exemption on income of any person
employed on board Malaysian ships; and, competitive financing in
the form of shipping loans and venture funds.
The government also encourages activities in the country that
provide training for maritime personnel. Departments teaching
marine technology and marine science have been set up at public
universities. The government also lends its support to many local
and international training programmes, seminars and conferences
held in the country. It actively promotes seafaring as a profession
to Malaysian youths through promotional activities, financial
incentives and institutional support to reduce dependence on
Maritime support services
There is a wide variety of maritime support services in Malaysia
focusing on providing support to ports and shipping companies
and facilitating maritime trade. A number of companies are
involved in these activities, as shown below.
Malaysia's resolve to attract foreign participation is
clearly evident in the maritime sector. Although the
Malaysian Government is committed to developing the
maritime industry and encourage local participation, Malaysia
very much welcomes the involvement of foreign players in the
sector. Aware of the fact that the maritime sector is one of the
most international of activities, Malaysia acknowledges the need
to welcome the participation of foreign companies, many of
which have greater capacity, experience, skills and knowledge
than local players.
The presence of foreign companies in activities such as logistics,
shipping, ship classification and ship management underlines
Malaysia's openness to foreign investment, resources and talents to
help develop its maritime industry.
Malaysia's openness is also evidenced by the privatisation of
federal ports, and by allowing foreign companies to hold equity
stakes in local ports and by granting foreign shipping lines
permission to provide services in domestic shipping under certain
conditions. These mark Malaysia's commitment to liberalise its
economy and integrate it with the global economy in order to
enlarge its share of the global trade.
The General Agreement on Trade in Services (GATS) under the
aegis of the World Trade Organisation (WTO) has delineated six
main support services in the maritime industry. These activities,
also termed as maritime ancillary services, are: cargo handling;
storage and warehouse; customs clearance; container station and
depot; maritime agencies; maritime freight forwarding.
Although many local players are involved in these activities, the
development of the maritime support services sector is neither
backed by a coherent strategy nor by a structured, long-term
development approach. This results in non-linkage between the
activities with one another and also between the maritime sector
and other production sectors.
Although Malaysia can be proud of its achievements in the
maritime sector thus far, it still has its work cut out to become a
true maritime nation. More needs to be done, especially in the area
of ports and shipping, for the country to fully exploit its maritime
resources, infrastructure and expertise and enhance its
Indeed, Malaysia has many criteria to become a maritime
powerhouse -- a glorious maritime heritage, strategic location,
excellent ports and shipping facilities -- but much more can be
achieved in optimising these attributes.
Malaysia's dependence on and demand for maritime
transportation systems will continue to grow in tandem with these
developments. With the concept of multi-modalism fast becoming
a reality, and with the maritime sector being at the forefront of
this concept, it is paramount that port and shipping players stay
abreast of its development.
Port development will continue to be a priority as Malaysian
ports prepare to increase their share of the rapidly expanding
transhipment business. This is emphasised by the bullish forecast
of container throughput in the country's ports, which is expected
to reach 36 million TEU by 2020.
The government has privatised several ports to enhance
management and boost development of port facilities, with positive
results. The investments of Maersk-Sealand in Port of Tanjung
Pelepas and Hutchinson in Westport have boosted operational
efficiency, competitiveness and cargo volumes at these ports.
Investment opportunities also exist in the free zones of several
local ports, which have been developed with distripark infrastructure
and facilities, and have the potential to further enhance Malaysia's
role as a regional distribution centre. The onus is on ports to be able
to present a strong case and a package of attractive investment
opportunities and growth plans to attract private investment.
Although many local shipping companies have gone on from
strength to strength over the years, the country's fleet expansion
has not been able to meet the rapid growth and demand in the
shipping services sector. The size of the Malaysian merchant fleet is
still small by global standards. It is estimated that only ten percent
of the country's trade is carried by the national shipping lines.
The Malaysian Government has steadfastly affirmed its
commitment to provide a conducive regulatory framework, policy
direction and administrative support to ensure that Malaysian ports
and shipping strategies continue to be responsive to market
developments and customer needs. While Malaysia can be rightfully
proud of the performance of its ports and shipping services, the onus
is on the stakeholders not to rest on their laurels. Amidst keen
competition in the maritime industry and international trade, and
the current global economic downturn, they must continue to
improve their services and pursue greater efficiency.
* Nazery Khalid is a Senior Fellow at the Maritime Institute of Malaysia.
This edited article is published in full at www.baird-online.com in the
SHIPS AND SHIPPING August 2009 17
Number of companies offering ancillary services
No. of local
Source : www.eguideglobal.com.my (Retrieved on 2/6/2009)
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