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Northport chief executive officer Datuk Azman Shah Mohd Yusof says the pilot project would involve up to 30,000 tonnes of biomass products exports per annum to Japan beginning the fourth-quarter of this year. NST picture by INTAN NUR ELLIANA ZAKARIA.

KUALA LUMPUR: Northport (Malaysia) Bhd, a member of MMC Corp Bhd, is planning to set up biomass processing and logistic facilities at Southpoint in Port Klang to optimise its existing assets utilisation.

The proposed biomass logistics hub is an integral part of Northport’s rejuvenation programme for Southpoint, following the signing of the privatisation agreement for Northport and Southpoint with the government on March 6 this year, which will expire in 2043.

Northport chief executive officer Datuk Azman Shah Mohd Yusof said the pilot project would involve up to 30,000 tonnes of biomass products exports per annum to Japan beginning the fourth-quarter of this year.

“We will start with a modest capacity for the first two years. We want to establish the hub and get enough traction for more potential players to come in.  We can then scale up the capacity and take advantage of economies of scale,” he told NST Business in an interview recently.

Azman said the port operator had allocated 15 acres of land in Southpoint to provide facilities such as warehouse, space for processing facilities and port handling services.

“The centralised processing hub, which is part of our plan to turn Southpoint into a regional biomass hub, is expected to cater for the demand for biomass products from the East Asian countries, particularly Japan and Korea,” he said.

He highlighted that the market demand for biomass products in the form of palm kernel shell (PKS), woodchips and wood pellets was estimated at 500,000 tonnes a month.

Japan and Korea are building more renewable energy (RE) power plants, as an alternative to fossil fuel and nuclear power plants.

“The hub is a vital part of the value chain needed to serve existing biomass producers and logistic providers in an industry which is very fragmented,” he added.

Azman said that by having a centralised hub, Northport would be able to optimise on the logistics cost and reap benefits from the economies of scale.

In April this year, Northport signed a memorandum of understanding with Cenergi Sea Sdn Bhd, Bioenergy Machinery Sdn Bhd and Environmental Preservation and Innovation Centre Sdn Bhd (EPIC) to establish a centralised processing hub, catering for various types of biomass such as palm kernel shell, palm pellet, woodchips, wood pellet and other biomass materials.

Cenergi and EPIC, who are subsidiary companies of Khazanah Nasional Bhd, will provide capital investment and quality standardisation and certification for the biomass project, while Bioenergy Machinery will manage the operation and provide the processing equipment for the hub.

Azman Shah said the collaboration was part of the company’s contribution to the government’s efforts to promote the biomass industry under the National Biomass Strategy (NBS) 2020.

Under the blueprint, Malaysia is projected to produce up to 80 million tonnes of biomass annually by 2020, creating business opportunities worth billions.

The biomass value chain could also create RM30 billion in additional gross national income with 66,000 jobs and 12 per cent reduction in carbon emissions as well as RM25 billion in investments by 2020 by utilising agricultural biomass for high value products.

He said Northport has been working closely with the Malaysia Biomass Industries Confederation (MBIC) to provide logistics solutions for the biomass industry and was hopeful that the collaboration would develop an end-to-end value chain for the biomass industry.

“The potential is tremendous. We know the market players have been looking around for a solution to their logistics issues. We have already received a few requests for this land space by the industry players,” he said.

Northport aims to create a thriving ecosystem backed allowing players to build the facilities themselves and operate independently.

“We will facilitate and create the space for players to operate and provide the port handling services,” he said.

With the biomass hub, the port operator is targeting a total cargo throughput of 2.0 million tonnes annually by 2020 at Southpoint, backed by key commodities such as bitumen, crude palm oil and biomass products.

“The growth potential for Southpoint is exciting. We are already the regional distribution centre for bitumen. We continue to be strong in palm oil exports, and our safe and high-productivity handling of project cargo and steel products are attracting new customers. The biomass logistics hub will further boost our cargo volumes and breathe new life to Southpoint”, Azman said.

Southpoint, whose history dated back to 1901 when it was known as Port Swettenham, is one of three ports that make up Port Klang. The other two are Northport (formerly known as Klang Container Terminal) and Westports.

Ever since the takeover of Northport by MMC Group in early 2016, the new management team has been working closely with the Southpoint business community to revitalise the port and the results are beginning to show.

In spite of the vagaries of the commodities market, Southpoint which operates as a bulk terminal has managed to perform well, handling cargo such as palm oil, bitumen, steel products, rice, fertiliser and of late, biomass.

 

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