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SPEECH BY Y.B. DATO SERI CHAN KONG CHOY
MINISTER OF TRANSPORTAT THE SIGNING CEREMONY OF THE RM 1.455 BILLION
PRIVATE DEBT SECURITIES ISSUE FOR
TRANSHIPMENT MEGAHUB BERHAD
ON TUESDAY 12TH
OCTOBER, 2004,
MANDARIN ORIENTAL HOTEL, KUALA LUMPUR
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Y. A. B. Dato Sri Mohd Najib bin Tun Haji Abdul RazakDeputy Prime Minister of Malaysia
Y.Bhg Dato Abdul Azim Bin Mohd Zabidi;Chairman, Kuala Dimensi Sdn Bhd
Y.Bhg Dato Nik Mohamed Din bin Nik YusoffExecutive Chairman, OSK Holdings Bhd
Board of Directors of Transshipment Megahub Berhad
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Board of Directors of Kuala Dimensi Sdn Bhd
Distinguished Guests,
Members of the Press,
Ladies & Gentlemen.
Good Evening,
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I take this opportunity to congratulate Kuala Dimensi Sdn Bhd
through its subsidiary Transshipment Megahub Berhad, on its
success in obtaining the approval of the Authorities on the issuance
of RM1.455 Billion Private Debt Securities Issue which comprises
RM1.095 Billion Fixed-Rate Serial Bonds (BONDS) and RM360.0
Million Commercial Papers/Medium Term Notes (CP/MTN)
Programme for the Port Klang Free Zone Development Project. I
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would also like to congratulate OSK Securities Berhad as the
Principal Advisor and Lead Arranger for this major fund raising
exercise.
I understand that Malaysian Rating Corporation Berhad has assigned
a rating of AAA to the Bonds and MARC-1/AAA to the CP/MTN.
This rating indicates the ability to repay principal and pay interest on
a timely basis and also shows the confidence by the rating agency on
the overall project as well as Kuala Dimensis competency to
complete the project.
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Ladies and Gentlemen,
The Ministry of Transport and through its implementing agency, Port
Klang Authority, has put top priority on the Port Klang Free Zone
Project to ensure the success of this project. The establishment of
the Port Klang Free Zone or PKFZ is aimed at making Port Klang a
regional Distribution Hub as well as a commercial, industrial and
logistics centre. At the same time, PKFZ would serve to attract and
promote both domestic and international manufacturing activities for
the export market.
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The development of The Port Klang Free Zone by Transshipment
Megahub Berhad through its parent company, Kuala Dimensi Sdn
Bhd, shows that the private sector is increasingly contributing to the
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growth of our country by directly undertaking government
development projects. The advisory, arrangement and subscription of
such a large bond issuance by a single Universal Broker also
highlights that the governments Capital Market Masterplan has
succeeded in creating strong financial institutions. I applaud OSK for
being able to undertake such a transaction and I hope this bond deal
will be very successful. In fact, the demand of this bond issuance by
the institutional investment community will show that the Malaysian
capital market has indeed grown deeper and broader with our
governments Capital Market Masterplan. The deals success will also
show us that the investment community is supportive of government
development plans even when they are undertaken through the
private sector.
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Ladies and Gentlemen,
Since being designated as a National Load Centre in 1993, Port
Klang has seen tremendous growth in its container throughput, rising
by an average of 20% annually to handle 4.8 million twenty-foot
equivalent units (TEUs) in 2003. It is now the 12 th largest container
port in the world. Consistent effort by the Government in expanding
port capacity through the construction of new berth facilities has been
among the reasons for this spectacular growth.
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The Port Klang Authority (PKA) has done excellent work in
coordinating and regulating the diverse port operations within Port
Klang and in their overseeing of both terminal operators, namely
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North Port and West Port. The 1000-acres Port Klang Free Zone will
further increase Port Klangs attractiveness as a transshipment hub.
The growth in transshipment cargo at Port Klang has been
spectacular at an average of 120% annually since 1993. Of late,
much of this transshipment cargo has come from neighboring
countries such as Indonesia and Myanmar. Transshipment cargo now
accounts for more than 50% of Port Klangs throughput and this
percentage is expected to increase further.
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The Port Klang Free Zone will further boost our transshipment cargo
by providing additional facilities for industries to process raw
materials brought in via Port Klang for subsequent re-export. By
locating manufacturing facilities and logistics firms side by side within
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the Free Zone, Port Klang will be turned into an integrated trade,
manufacturing and logistics hub.
With global container shipping expected to grow by 12% this year and
between 9% to 10% in 2005, we feel that the global containerization
trend will result in sustained container traffic growth worldwide and
particularly in Asia. As such, the existence of logistics providers and
excellent infrastructure facilities at Port Klang will allow it to capture a
larger market share of global trade and to serve as a regional
distribution centre. Transshipment of cargo is the way forward for
global ports as growth in this area is not limited by the growth in the
ports hinterland as is the case with indigenous cargo. Thus although
indigenous cargo will remain key to Port Klang, the PKAs strategy to
boost transshipment cargo is a step in the right direction.
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When the Free Zone is completed by 2006, we expect global
container trade to be even more focused on Asia. Already, 6 of the
worlds largest container ports are located in Asia and the
containerization of cargo in India and China will only lead to the
greater use of containers in global trade. This will help boost the
throughput of container ports such as Port Klang. With Port Klang
strategically located on the Straits of Malacca, a key trade artery, it is
well poised to directly benefit from Asias pre-eminence in container
trade.
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The implementation of PKFZ is carried out by the Jebel Ali Free Zone
Dubai which is a joint venture project between Jebel Ali Free Zone
International (JAFZI) and Port Klang Authority, whereby JAFZI will
play the main role as Manager, Administrator and Marketer of PKFZ.
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The Joint Venture with JAFZI is the best option based on their
experience and expertise in managing the most successful free zone
in the world, The Jebel Ali Free Zone Dubai. The Government is
confident that the development of PKFZ spearheaded by JAFZI will
be a success and the government will continue to provide the
strongest support to ensure its consequent development and further
contribution to the national economy.
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Ladies and Gentlemen,
As you are aware, the Port Klang Free Zone Project was successfully
launched on 2nd July 2004 by the Hon. Deputy Prime Minister of
Malaysia on behalf of the Hon. Prime Minister of Malaysia. Following
this, I understand that there has been heightened interest from
various companies both local and international who are attracted to
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this project and are looking forward to the opportunity to locate and
operate their businesses in PKFZ.
I wish to congratulate Transshipment Megahub Berhad, a subsidiary
of Kuala Dimensi Sdn Bhd for all their efforts to take on new
challenges in developing Port Klang Free Zone and in strengthening
Malaysias place in the international arena as a major logistical hub in
Asia. I also applaud OSK Securities Berhad for being the lead
arranger, principal advisor and sole subscriber of this very significant
bond issuance. They have proven that Universal Brokers too are
capable of producing such a major bond issue in the market place. I
wish Kuala Dimensi, TMB and OSK every success in this transaction.
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On this note, I would also like to take this opportunity to extend my
appreciation to the Selangor State Government under the leadership
of YAB Dato Seri Mohamad Khir bin Toyo, Chief Minister of Selangor
and all the State Government Agencies who have assisted in one
way or another to ensure the successful fruition of this national
project. Thank you / Sekian Terima Kasih.
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