PETALING JAYA: Straits Inter Logistics Bhd (SIL) expects to reap additional income of RM60 million in the next 12 months, following the establishment of Pit Stop Bunker Hub@Lumut with Lumut Port.
"We will commence on October 15th. I think we can capture a bunkering market share of two million litres per month at Lumut Port.
"At today's price, this should conservatively bring in RM60 million in additional income for the next 12 months," said SIL managing director Datuk Seri Ho Kam Choy.
Today, SIL unit Tumpuan Megah Development Sdn Bhd sealed an exclusive agreement with Lumut Maritime Terminal Sdn Bhd to establish a fuel bunkering base at Lumut Port, Perak. This agreement has a renewable option for a further 12 months.
Present at the signing ceremony were Tumpuan Megah Development Sdn Bhd director Raja Ismail Raja Mohamed, Lumut Maritime Terminal Sdn Bhd director Laksamana Madya Datuk Seri Panglima Mohammed Noordin Ali and Lumut Maritime Terminal chief executive officer Mubarak Ali Gulam Rasul.
When asked on SIL's business outlook, Ho noted the United Nations’ International Maritime Organization’s (IMO) new ruling bodes well for Malaysia's bunkering industry.
The IMO plans to ban ships from using fuel with a sulphur content higher than 0.5 per cent by 2020 (from 3.5 per cent now), unless they are equipped to clean the sulphur, is expected to drive a shift in demand to marine gasoil.
“We anticipate the market size will grow for the marine gasoil bunkering business as more demand shifts to marine gasoil,” he says, adding that a shift to marine gasoil makes economic sense compared to alternatives such as the installation of “scrubbers”, or kits that strips out sulphur emissions and allow ships to use cheaper fuel oil with higher sulphur content.
Currently, SIL is Malaysia's largest oil bunkering operating across Pasir Gudang Port, Tanjung Pelepas Port, Johor Bahru Port, Kuantan Port, Kemaman Port, Kuala Terengganu Port, Labuan Port and Miri Port — all of which are licensed under the Petroleum Development Act 1974 (PDA Licences) for its bunkering services.
Four months ago, SIL unit Tumpuan Megah had entered into a 3-year contract with Bintulu Port Sdn Bhd to operate, maintain, manage and provide operational facilities and services of port undertakings within the Bintulu Port area.
In funding SIL's business expansion, Ho said his team seeks to tap into the soft loans available under the government's Maritime Development Fund and disbursed via Bank Pembangunan.
Five years ago, the government formulated the Logistics Sector Master Plan, which provided the strategic direction for the development of logistics infrastructure and supply chain.
Under the plan, RM3 billion in soft loans were allocated under the Maritime Development Fund through Bank Pembangunan Malaysia, to help the industry grow.
Then under Budget 2019, Finance Minister Lim Guan Eng relaunched a further RM1.5 billion soft loans into the Fund to be disbursed by Bank Pembangunan Malaysia Bhd until December 31, 2020.
Successful applicants enjoy cheaper loans, with subsidy of 1.75 per cent per annum, to part-finance acquisition of all types of vessel or aircraft, the purchase of land, the construction of shipyard, hangar or related infrastructure.
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