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"Malaysia Freight Transport Report Q1 2014" Published


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2013-12-13 11:20:23 - Fast Market Research recommends "Malaysia Freight Transport Report Q1 2014" from Business Monitor International, now available

China Slowdown Has An Impact On Malaysia

Second quarter economic growth in Malaysia came in under expectations largely, we think, because of the impact of slower Chinese growth on Malaysian exports. Q213 GDP growth was 4.3% year-on-year, down on Bloomberg consensus forecasts of 4.8%. BMI believes we have yet to see the worst of China's economic slowdown, meaning that Malaysia's export drive will remain somewhat subdued. While net exports are acting as a drag on growth, there are still some bright spots in the country's outlook, with both investment and domestic consumption looking strong. Construction activity is likely to be on the up, as many public sector infrastructure projects, part of the government's Economic Transformation Programme (ETP), have been scheduled to

start up during H213. There is also a healthy pipeline of private sector investment projects. Household consumption is also holding up well, boosted by low unemployment (at a historic low of around 3%). Taking these factors into account, we are maintaining our GDP growth forecast at 4.6% in 2013, followed by 4.6% again in 2014.

Full Report Details at
- www.fastmr.com/prod/723601_malaysia_freight_transport_report_q1_ ..

Activity levels across Malaysia's different freight modes will grow in a rough 2%-4.0% range in 2014, lagging a little the growth rates achieved by the wider economy and the foreign trade sector (4.0%-4.4%). However, as infrastructure investment plans are advancing, Malaysia will be gradually expanding its freight capacity.

Headline Industry Data

* The real value of Malaysia's total trade will rise by a predicted 4.1% in 2014, picking up from the estimated 3.8% expansion experienced in 2013.
* Total cargo volume handled at Port Klang will rise by 2.8% to 209.3mn tonnes in 2014, while volume at the Port of Tanjung Pelepas will rise by a marginally higher 3.0% to 126.5mn tonnes.
* Rail freight volume is projected to rise 2.2% to 6.379mn tonnes in 2014 and to average 3.1% annual growth in the five-year period to 2018.
* Air freight volume is set to grow by 1.9% to 945,000 tonnes in 2014, on a par with the growth rate achieved in 2012. Average growth in the next five years will be 1.9% per annum.

Key Industry Trends

Industry Lobbies Highlight Logistics Issues: Malaysia's logistics system is weak, inefficient, and fragmented, according to Abdul Rahman, chairman of the Asia Logistics Council (ALC). Rahman said there were only 19 to 20 'clusters' in the entire logistics value chain in the country. 'From the government bodies responsible for licensing to the port authorities, freight forwarders, trucking system, incoming port system -we are so fragmented' he said. In his view the logistics sector was the weakest of the four pillars of the country's international trade system, the others being finance, commerce and insurance.

Alvin S.W. Chua, president of the Malaysian Freight Forwarders' Association (MFFA) noted that 'we may have strength and capabilities in handling big shipments, we also have a super infrastructure; however the problem of the last mile may affect overall efficiency. What's the point of having everything else if congestion at the port is not addressed, it is going to let us down?'

PTP Says Double-Digit Growth Possible In 2014: Port of Tanjung Pelepas (PTP) management says it is confident of achieving double-digit growth rates in 2014. Chief executive Glen Hilton was quoted saying 'we are expanding under a three-year modernisation plan designed to be completed around May 2014'. A total of MYR1.4bn (US$440.2mn) is being invested to bring the port up to the standard necessary to receive a new generation of mega-container vessels. Hilton said that in 2012 the port handled 7.7mn twenty-foot equivalent units (TEUs), and that its current capacity from 12 berths stands at 8.5mn TEUs. While acknowledging that the market has been fluctuating, Hilton said 'although we are in tough economic times, we will continue to work well with customers like Maersk Line to attain continued growth'.

Northports Raising Capital For Expansion: Malaysia-based port operator Northports was considering whether to go to the stock market or use Islamic bonds to raise MYR1bn (US$299mn) for its expansion, reported Seatrade Global in August 2013. The operator said it would take the final decision on which financial instrument to use by October. Northports has acknowledged that it will struggle to meet its 5% growth target owing to the current economic situation. Earlier, technical specialists were reported to be engaged in assessing the feasibility study for a project aimed at expanding the break and dry bulk processing facilities of Northport, the port operating unit of NCB Holdings. The project represents a total investment of MYR200mn (US$61.6mn) and entails expansion to the north of Wharf 25.

Key Risks to Outlook

Domestic political risk has dropped significantly after the general elections in 2013. The subsequent unopposed election of Prime Minister Najib Razak as president of the ruling party, the United Malays National Organisation (UMNO) in October 2013, can also be taken as a positive sign of continuity in the government's business-friendly policies. In our view there remains is a rather more technical risk, concerning the way the government will unwind its pre-electoral stimulus programme. In the run-up to the polls a series of fiscal deficit-widening decisions were taken. This pump-priming included a generous budget for 2013, with cash handouts for the poor and wage increases for public sector workers. To bring the deficit back under control some kind of fiscal tightening will now be needed in the post-electoral period.

About Business Monitor International

Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets. BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports. Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports. View more research from Business Monitor International at www.fastmr.com/catalog/publishers.aspx?pubid=1010

About Fast Market Research

Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.

For more information about these or related research reports, please visit our website at www.fastmr.com or call us at 1.800.844.8156.


Author:
Bill Thompson
e-mail
Web: www.fastmr.com
Phone: 18008448156

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