DUBLIN--(BUSINESS WIRE)--Research and Markets (http://www.researchandmarkets.com/research/e1f6a2/malaysia_shipping) has announced the addition of the "Malaysia Shipping Report Q2 2011" report to their offering.
The Malaysia Shipping Report provides industry professionals and strategists, corporate analysts, shipping associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Malaysia's shipping industry.
After a strong performance in 2010, BMI continues to see a relative growth slowdown making itself felt in Malaysia during 2011, with prospects for the ports and shipping sector also cooling as a result. We think domestic consumption and investment levels will remain pretty robust, with the cooling-off making itself felt through a weaker external sector, influenced by a slowdown in the Chinese economy.
After efforts by the administration of Prime Minister Najib Razak to narrow the fiscal deficit in 2010, we think government spending may push up again in 2011, exerting a positive influence on GDP. Under the government's Economic Transformation Programme (ETP) investment is set to be channelled into infrastructure, tourism, and agribusiness. Within these priorities BMI believes the ports sector will get particular attention, given evidence that it is a potential bottleneck to growth. Based on our analysis, BMI forecasts 2011 GDP growth of 3.4% in Malaysia (following on from 6.4% in 2010 when the country was recovering from the global recession in the preceding year). The economy will then gather a little more pace to 3.6% in 2012. In the five years to 2015 we expect growth to average 4.8% per annum.
Headline Industry Data
Port of Klang, the country's largest bulk and box handling facility, will see a +5.4% gain in tonnage to 189.995mn tonnes this year, with box handling up 5.8% to 9.437mn TEUs. In both cases this represents a cooling off on the 2010 growth rates, respectively 24.7% and 22.0%.
Growth is also due to cool at Malaysia's number two facility, the Port of Tanjung Pelepas, where we see tonnage at +5.8% to 118.596mn tonnes and container handling at +6.2% to 6.891mn TEUs.
2011 Malaysian trade growth forecast at 3.1% in real terms, down from 12.8% in 2010.
Key Industry Trends
The need to invest in expanding port capacity is back in focus. Throughput at the country's two main ports expanded strongly last year, and with the pace easing in 2011 congestion is not yet a major issue (although it is a big problem at Johor). However, BMI's view is that if medium term growth is to be sustainable, port facilities have to be updated and expanded as a matter of urgency.
The problems at Johor are a sign of what could happen if investment is not forthcoming at the necessary speed. Johor Port Shipping and Forwarding Association said that delays at the facility in southern Malaysia slowed the flow of imported raw materials, disrupting production, resulting in missed deadlines for shipments, and potentially harming Malaysia's reputation as a supplier.
The 'China connection' remains of major importance to Malaysian ports and shipping. This was underlined with a decision by China Shipping Container Lines (CSCL) to continue using the Westports container terminal in Port Klang as its main transhipment hub in South-East Asia. Westports is developing its capacity to handle mega-size container vessels.
Key Risks to Outlook
While BMI's central ports and shipping forecast has as its central scenario a reduction in 2011 growth rates relative to 2010, we believe there is an upside risk linked to the performance of the Chinese economy. In essence, this is that the Beijing authorities might launch an additional round of fiscal stimulus to cushion or prevent the expected slowdown in the economy. This could mean that China grows more strongly than we have anticipated, with positive-knock on effects for Malaysia in general, and for Malaysian trade and ports and shipping in particular.
Companies Mentioned:
- A.P. MLLER-MAERSK
- Mediterranean Shipping Company (MSC)
- CMA CGM
- Evergreen Line
- Hapag-Lloyd
- Neptune Orient Lines (& APL)
- CSAV Shipping
- China Ocean Shipping (Group) Company
- Hanjin Shipping
- China Shipping (CSCL)
- Mitsui OSK Lines (MOL)
- Nippon Yusen Kabushiki Kaisha (NYK)
For more information visit http://www.researchandmarkets.com/research/e1f6a2/malaysia_shipping.