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Malaysia's Westports setting up for future turnaround with current expansion

Malaysia's Westports setting up for future turnaround with current expansion
Westports Holdings is cautiously expanding capacity despite the current economic uncertainties, and is confident that a turnaround is round the corner, local media quoted ceo Ruben Emir Gnanalingam as saying. “The beauty of a cycle is that once you hit the bottom, the following year is good. Hopefully, last year would have been the bottom,” said Gnanalingam.

He cited the MYR1 bn ($228m) container terminal 8 (CT8) expansion project, which started work last year, and is set to increase Westports' capacity from 11m teu to 13.5m teu as an example of preparing for a future upturn. The first phase of the expansion will be operational by the end of this quarter or early next quarter, and will be fully ready by the middle or end of 2017.

“We are expanding by 600m, adding 14 to 15 cranes and a lot of yard equipment. We are also adding new marshalling centres for our staff, new car park and new gate to ease congestion.Gnanalingam however acknowledged that the year will be an uncertain one.

“I think 2016 will be a difficult year to predict. There are many factors at play, and one of the difficult things is you don’t know where these things are trending.“Is the currency going back to normal? What is the new normal? Is fuel really going to remain at this price forever? How much lower can it go?” asked Ruben.

But there is cause for optimism he believes. Moves towards further trade liberalisation will spur  business, and the Trans-Pacific Partnership, Asean Economic Community and other similar trade pacts will have a positive impact in the long term, said Gnanalingam.

“The general rule is that free trade equals more trade. As barriers are reduced for all kinds of reasons, there will be more trading. It will have a positive impact but usually, you won’t see it straightaway.”

He pointed out that there is potential to grow intra-Asean trade, which is still at a low 20% level compared with other regional groupings.“Sometimes, it’s also because we compete with our fellow Asean members. That’s why there is not much trade between us. But I think over time, people expect a lot more intra-Asean trade, especially if we’re trying to become a closer community,” he said.