WESTPORT Malaysia is set to sign an agreement with a key-customer, CMA-CGM, which will ensure that the French shipping line continues to use the port as a key Asian transhipment hub for at least the next 15 years.

The CMA-CGM business generates revenue currently worth around RMIOO million a year. The agreement is expected to be signed sometime this week, sources say.

Locking in GMA-CGM for the long term is a coup of sorts as the shipping lines business with Westport has grown by leaps and bounds since its ships first called at Port Klang in 1998, bringing in lO,QOO twenty foot equivalent units (TEUs) container boxes that year. Last year it did 700,000 TEUs and I this is expected to rise to 850,000 TEUs this year, the sources added.

Westport, which is owned and managed by Kelang Multi Terminal Sdn Bhd, is in negotiations to seal long-term agreements with other shipping lines. The port, which is the number two container port in the country after Pelabuhan Tanjung Pelepas (PTP), handled 2.7 million TEUs last year.

Industry analysts say the strong growth Westport has enjoyed in recent years makes it hard and very expensive for a competitor port like Northport to try and stage a takeover as speculated recently by certain quarters. Northport is part of the Permodalan Nasional Bhd (PNB) group.

They say that given the strength of Westport, which is owned largely by private interests, it will be hard for anyone to try and force it to merge with Northport. "Shipping lines and shippers using Port Klang would want competition" says an analyst. "They would be unhappy if a monopoly is created and they could then decide not to use the port"

With the Port of Singapore very aggressive in trying to lure customers to it, Malaysia cannot afford to do anything that will upset shipping lines. Which are currently using Port Klang. Analysts also note that Hong Kong tycoon Li Ka Shing had in 2000 paid RM500 million for a 30% stake in Westport, valuing the whole company at RM1.7 billion. At that time, the port was netting a profit of around RM30 million a year and handling about 1.2 million TEUs.

By now, they estimate that Westport could be worth anywhere from RM2.2 billion to RM2.5 billion as its net profit is said to be around RM 100 million. Aside from the need for competition, it will cost a lot of money anyone to buy it;" says the analyst. "I don't see it happening.

The Sun, 15.6.2005