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Port Klang aims to become gateway for halal food trade

The Port Klang Free Zone is finally making good progress but it has changed its strategy with the focus now being on export of halal food. Correspondent Manik Mehta reports on the developments at the zone

After a sluggish start, the controversial Port Klang Free Zone (PKFZ) has managed to attract a large number of investors and is now pitching itself as a gateway for the global halal food industry.
“We have strong potential to make a mark on the global halal food trade because of our value-added services and distribution park facilities,” said Chia Kon Leong, general manager of business development at the PKFZ.
The PKFZ was to be managed jointly by Dubai’s Jebel Ali Free Zone Authority (Jafza) and the Port Klang Authority following the signing of a 15-year agreement in October 2003, but Jafza later pulled out of the project because of changes in the company’s policy.
The PKFZ was modelled on the Jebel Ali Free Zone in Dubai, whose port ranks ninth in the world in terms of container traffic.
The project was criticised as being too expensive after its price tag ballooned from US$303 million at the time of its inception in 1999 to a level that left the Port Klang Authority deeply in debt. The PKFZ finally opened in November 2007 after receiving government aid.
The zone’s location in Pulau Indah serves as an excellent gateway for Asia-Pacific countries to penetrate Muslim countries, where there is a huge demand for halal products, Chia said. He noted that there were two billion Muslims worldwide with China alone having a 80 million population. The world’s halal food consumption is estimated at US$500 billion annually.
“Shippers can use the PKFZ as the gateway to repackage and export halal food to Muslim countries,” said Chia. The PKFZ has entered into an agreement with Malaysia’s Halal Industry Development Corporation (HDC) to jointly develop a halal exclusive zone (HEZ) in the PKFZ.
“The HEZ will be a dedicated halal zone for commercial and industrial activities with facilities consisting of pre-built light industrial units, open land with completed infrastructure and office space at the commercial centre,” Chia said.
The concept behind the creation of the PKFZ is similar to that of the Jebel Ali Free Zone in Dubai but it has been fine-tuned to local and regional conditions in Southeast Asia, said Chia.
The PKFZ has also been highlighting the facilities that exist for other industries. “Besides halal, the automotive industry will be one of the key segments of the PKFZ, although the volume currently is quite modest,” Chia said.
Investment in the zone has accelerated this year and 43 companies have so far invested in the zone a total $20.40 million. Aker Solutions of Norway, with an investment of nearly $12 million, is the biggest investor in the PKFZ.
European countries also see good potential for the PKFZ to be a gateway for the export of halal food for distribution to Muslims in the region. The Dutch ambassador to Malaysia, Lody Embrechts, said recently that Netherlands was working on creating a halal supply chain between Port Klang and the Port of Rotterdam.
Chia said the PKFZ was also trying to attract investments in the field of trading, manufacturing and logistics covering the automotive, oil and gas and palm-oil related industries. He said talks were proceeding with more than 40 potential investors for investments worth more than $17 million.
The PKFZ is also having talks with an unidentified foreign shipping line that is considering to set up a logistics hub at the PKFZ for warehousing, distribution, container storage and other activities. To facilitate this, a common user container freight station has been set up in the zone.
“The free zone will ensure long-term sustainability of ocean traffic as it serves as a vehicle for a port’s strength,” Chia said.
The PKFZ is adjacent to Malaysia’s premier maritime gateway Northport and this allows for seamless logistics operations as goods can be transported speedily to and from the zone,” he added. Transhipment accounts for 57 percent of cargo volume handled at Port Klang.

source:http://www.cargonewsasia.com/secured/article.aspx?id=17&article=17756