Pelabuhan Tanjung Pelepas Sdn Bhd (PTP), the operator of transshipment hub the Port of Tanjung Pelepas in Johor, is expected to continue driving the development of the logistics and port sector in Malaysia.

The MMC Group member said this was in line with the group’s commitment to invest almost RM26 billion over the next five years to undertake various developments in the Sungai Pulai area, which would generate more than 23,000 job opportunities there.

MMC Corp group managing director, Tan Sri Che Khalib Mohamad Noh, said PTP not only has world-class port facilities but also a reference for the regional maritime industry, leading in various fields including sustainability, digitisation as well as the provision of industrial vocational and technical training.

“PTP is the busiest transshipment hub in Malaysia, covering 1,900 acres of terminal and 1,600 acres of free zone area that provides services to major shipping companies and container operators. It provides shippers in Malaysia and abroad with extensive connectivity to the global market,” he said in a statement today (January 11).

PTP said MMC Group would also develop a green fuel terminal for the supply of methanol for the shipping industry, which is a game-changer initiative in line with the National Energy Transition Roadmap and Malaysia’s aspirations towards net zero, green energy development, and ensuring environmental sustainability.

It added that the investment by MMC Group would also include RM10 billion over the next five years for the development of PTP’s phase 3A terminal, and upgrading of the existing terminal in terms of automation, digitisation, and human resource empowerment.

Source: Bernama

PTP to continue contributing to development of logistics and port sector

Prime Minister Datuk Seri Anwar Ibrahim described the achievements of the Port of Tanjung Pelepas (PTP) as an extraordinary success at the international stage, becoming among the three major ports in Southeast Asia and ranked 15th in the list of major ports in the world in over 20 years.

He said the port area which was once a fishing village is now the busiest container transshipment hub in Malaysia.

The investments in PTP has resulted in economic spillovers such as high-paying jobs which benefit not only the residents in Johor but also Malaysian citizens in general, he said.

“Investments of RM8.7 billion have been spent for the PTP terminal development, which also attracts foreign and domestic direct invesments totalling RM4.4 billion, creating over 20,000 job opportunities.

“I believe this proud success is the result of good planning as well as efficient management.

More than that, PTP could not have achieved success at the level we see now without the commitment, discipline, and spirit shown by all its employees,” he said in a post on his Facebook page earlier today.

The Tambun Member of Parliament (MP) also spent around 30 minutes in a ‘Meet-and-Greet’ session with employees of PTP and MMC Group, and listened to a brief proposal on the long-term development plans for the terminal, and is prepared to give it due consideration.

“I’m stating the commitment to support and facilitate any efforts whether from government-linked companies or the private sector, specifically for industries or strategic activities that are important to the country so that these activities develop and progress and able to elevate the nation’s position and dignity,” he said.

Meanwhile in a separate statement, MMC Group stated its commitment to invest close to RM26 billion over the next five years to build various developments around Sungai Pulai.

The investment includes RM10 billion over the next five years to develop PTP terminal phase 3A and also to upgrade the existing PTP terminal encompassing automation, digitalisation and human resource empowerment at the port, it said.

The group will also develop a green fuel terminal to supply methanol for the shipping industry. 

Source: Bernama

Anwar: PTP achieves extraordinary success at international stage

Gamuda Bhd has the edge over the likes of YTL Corp Bhd and IJM Corp Bhd in building data centres, which will be the next growth area for the conglomerate, analysts say.

CGS-CIMB Research said Gamuda’s industrialised building system (IBS) plant will give the conglomerate an advantage and result in higher project pre-tax margins of over 20%.

Such margins are double of what tunnelling jobs for mass rapid transit (MRT) projects can offer. In addition, the IBS plant allows completion of data centres in just eight months.

The plant’s current utilisation rate of 50% gives it ample free capacity.

“To put things into perspective, assuming Gamuda clinches one RM500mil data-centre project a year, it will be able to replicate the income of a RM6bil MRT project over a six-year period,” CGS-CIMB Research said in a note.

IBS is a construction technique where components such as walls and ceilings are manufactured in a controlled environment such as a factory.

The research house noted that Gamuda is “exuding a new confidence” and that it is poised to see another record year in the ongoing financial year ending July 31, 2024 (FY24).

This was the key takeaway from Gamuda’s session at CGS-CIMB Research’s 16th Annual Malaysia Corporate Day.

The conglomerate projected that its revenue would double in FY24 to about RM16bil.

“We raise our FY24, FY25 and FY26 earnings per share (EPS) by 7%, 7% and 6%, respectively, and our target price to RM6.50 to factor in stronger revenues for property. At our new target price of RM6.50, Gamuda trades at 16 times 2024 EPS, which is still below its 18-year mean level of 17 times.

“Maintain ‘add’ for its strong earnings visibility from its record-high orderbook of RM26bil,” CGS-CIMB Research said.

Gamuda also reiterated its new order-win target of RM25bil a year in FY24 and FY25.

It said the medium-term wins will come from three projects in Australia worth A$7bil to A$8bil, and one project a year in Taiwan, Sabah and Penang.

CGS-CIMB Research said the execution of the Penang Light Rail Transit (LRT) project will move faster than the MRT Circle Line or MRT3 in the Klang Valley.

“Gamuda believes the RM10bil Penang LRT will take off by the first half of 2024 (1H24) and that it will have a significant role to play.

“For MRT3, it believes a rollout could happen in 2H24 after the government achieves some certainty in terms of subsidy savings,” he said.

Meanwhile, CGS-CIMB Research added that Gamuda expects its private finance initiative (PFI) to develop the 187.5MW Upper Padas Hydroelectric Power Plant in Sabah to be the first of more projects to come that will build its recurring-income stream.

Gamuda has 45% equity interest in the project.

“It has committed to the latter (PFIs) to replace the income loss from the sale of its toll road business in 2022.

“The power plant targets to achieve financial close by mid-2024 and to have finalised its power purchase agreement and tariff structure by then,” the research house said.

On dividends, CGS-CIMB Research pointed out that Gamuda said there will likely be no increase beyond the 12 sen it pays yearly.

“It may look to raise this only after earnings have achieved a more sustainable level when it reaches its peak orderbook in the next two years,” the research house said.

Source: The Star

Gamuda has edge in building data centres

Emergence of logistics industry creates a niche market for new facilities

In the ever-evolving landscape of the logistics industry, a distinctive market is emerging and its heartbeat resonates within the realm of cold storage facilities. The surge in demand for logistics services, particularly those requiring temperature-controlled environments, has propelled the creation of a specialised niche that is transforming the way goods are handled and transported.

With this surge in demand, cold storage facilities have emerged as a vital component of the entire logistics industry. Simply, these facilities are where temperature-sensitive goods are stored before they are transported along the cold chain journey to the final destination, which is usually the end consumer. Through this cold chain process, products are transported and stored in a consistent and temperature-controlled environment, in which cold storage real estate plays a critical role.

Taking ice cream as an example product in the cold chain journey, the recommended storage temperature for ice cream is -27°C but fluctuations in storage freezer temperatures can lead to textural defects. This typically occurs when the product warms during the transition between freezers. Prolonged warming can result in the loss of air and settling of sugar syrup, causing ice crystals to grow and altering the texture of the product. 

Another example is the transportation of certain temperature-sensitive medication as experienced during the Covid-19 pandemic where the Pfizer vaccine needed to be stored at 2°C to 8°C over 10 weeks to ensure its efficacy against the virus. Such special consideration beckons the need for property temperature-controlled storage spaces. Ensuring a consistent temperature throughout the cold chain, therefore, is critical in ensuring that the quality of products is maintained.

Evolution of cold storage facilities 

According to global real estate services firm JLL, cold storage facilities typically require higher specifications than standard distribution centres due to their specific function. While standard facilities are becoming increasingly sophisticated with greater integration of technology and automation, cold storage facilities pose additional challenges. 

“The complexity of refrigeration, including building design and labour working conditions, along with the increased risk to temperature-sensitive products, make cold storage facilities more capital- and management-intensive. Further, increasingly complex logistical requirements are driving changes in how cold storage facilities are being utilised. 

“These changes need to be incorporated into how buildings are designed and into the operational strategies of operators. In addition, environmental, social and governance (ESG) requirements are also increasingly being incorporated into cold storage real estate to promote sustainability and reduce environmental impact,” the JLL Research team said in their Cold Chain, Unlocked report.

For example, more facilities are being designed with insulation, efficient refrigeration systems, and LED lighting to optimise energy efficiency. Additionally, renewable energy sources such as solar panels are being integrated to power these facilities. Water conservation measures, waste reduction strategies, and the use of environmentally friendly refrigerants are also being implemented to create more sustainable cold storage solutions.

What’s the development opportunity? 

“Incorporating advanced technology, automation and sustainable practices is driving changes in the sector. This presents opportunities for differentiation and for developers and investors to become industry leaders in cold storage real estate. For instance, there are real opportunities to leverage advanced technology and sustainable practices in cold storage facilities. Implementing energy-efficient systems, insulation, and renewable energy sources can help reduce environmental impact and operational costs,” the team reported.

Moreover, the integration of automation and digital solutions has the potential to enhance operational efficiency and simplify processes. Furthermore, in the ongoing evolution of the cold storage industry, there exists an opportunity to modify facilities to align with evolving logistical demands. This may involve the strategic design of facilities to accommodate alternative distribution models, including those tailored for e-commerce and last-mile delivery.

Rapidly growing sector

According to JLL, the global cold storage sector has expanded rapidly in the past decade, growing from around 550 million cubic metres in 2014 to an estimated 785 million cubic metres by 2022. This reflects a 4.5% compound annual growth rate (CAGR). 

“Assuming this same CAGR, the market will grow to more than 1.1 billion cubic metres by 20302. Despite strong potential growth, this is arguably a conservative estimate. More capacity may be needed given the structural changes in consumption patterns and the shift to online spending. Global disruptions have also highlighted the criticality of the cold chain sector,” the report said.

These factors have and will continue to have long-term demand implications for the amount of cold storage space needed, how they are designed and operated and where they are located. Robust market growth translates to rising capacity on a per capita basis. In 2014, global capacity per capita was just 0.07 cubic metres. Assuming current population projections and historical CAGR cold storage capacity growth, global capacity per capita will almost double to 0.13 cubic metres by 2030. Capacity levels differ significantly in APAC. Generally, the more advanced economies have greater capacity relative to more emerging parts of Asia. This is unsurprising given that logistics networks in these countries tend to be more sophisticated and institutionalised. 

According to the 2023 Logistics Performance Index (LPI) by the World Bank, Singapore secured the top spot, Japan claimed the 13th position and South Korea held the 17th rank globally. Both Australia and China shared the 19th position. In contrast, emerging South-East Asian nations find themselves positioned much lower in the rankings.

The increasing interest in the cold storage sector is rooted in the market’s structural growth drivers. Global disruptions have underscored the critical role resilient supply chains play, with cold storage real estate emerging as a vital component in these networks. Shifting consumption patterns and the growing prevalence of e-commerce have triggered a heightened demand for efficient cold chain logistics and expanded cold storage real estate. 

Growth opportunity

To better understand this growth potential (i.e. from an estimated 785 million cubic metres in 2022 to 1.1 billion cubic metres by 2030), it’s important to understand the underlying drivers. Food is generally considered the dominant product in this expanding sector, followed by pharmaceutical goods. The opportunity to capture growth in these industries is large. 

The current, more challenging investment landscape is steering investor attention towards alternative and higher-yielding asset classes, with the cold storage sector standing out. The difficulties encountered in transporting perishable vaccines during the Covid-19 pandemic, coupled with subsequent food shortages, have underscored the essential nature of robust refrigerated infrastructure. This resilience positions cold storage assets as relatively resilient in a sector that attracts many investors seeking to mitigate risks in an increasingly volatile and uncertain investment environment. Investors are drawn to cold storage not only for its resiliency but also for factors such as greater stability, appealing leasing covenants, higher barriers to entry, a yield premium, technological upside and diversification.

Investing in cold storage presents an enticing opportunity for stable and resilient returns. Cold storage assets tend to yield higher rental rates and investment returns, making them an appealing destination for capital amid the current investment climate, characterised by elevated hurdle rates. With the escalating demand for cold storage space driven by relatively inelastic underlying demand, cold storage assets are positioned to deliver robust financial performance. This asset class offers greater stability and resilience, making it an attractive addition to investment portfolios.

Source: The Star

Rise Of The Need For Cold Storage

Panasonic Corporation Air Quality & Air Conditioning Company (Panasonic Corp AQAC) recently started operations of its new building constructed near Panasonic Appliances Air Conditioning R&D Malaysia Sdn Bhd’s (PAPARADMY) building in Shah Alam, Selangor.

In a statement today (Jan 3), it said that the new building will introduced state-of-the-art facilities, including the company’s first “simultaneous hot water and air conditioning multi-test laboratory”, to shorten the development lead time of air conditioning equipment for the global market, mainly in Asean and Europe, and to accelerate development tailored to local needs.

Panasonic Corp AQAC has two companies in Malaysia, Panasonic Appliances Air Conditioning Malaysia Sdn Bhd (PAPAMY) and PAPARADMY.

PAPAMY, which will celebrate its 50th anniversary this year, is a production and sales base for room air conditioners, commercial air conditioners, and heat pump water heaters (A2W) while PAPARADMY is a research and development base in Malaysia.

Malaysian Investment Development Authority (MIDA) chairman Tan Sri Datuk Seri Dr Sulaiman Mahbob applauded Panasonic’s decision to establish their new research & development (R&D) building in Malaysia.

“Panasonic stands as a shining example of corporate transformation and growth, adeptly navigating the dynamic landscape of manufacturing technology.

“Operating nine manufacturing facilities and twelve entities engaged in R&D, sales, and management, Panasonic’s comprehensive approach fosters economic growth across diverse sectors, generating around 17,000 job opportunities,” he said.

Sulaiman said the R&D centre in Malaysia is set to be upgraded from a supporting role to a global leadership role, spearheading R&D for new products and emerging technologies for Panasonic’s global business.

“This transformation is a testament to Panasonic’s commitment to innovation and development. With the support of the Ministry of Investment, Trade, and Industry (MITI) and MIDA, Panasonic Group’s achievements in Malaysia are made possible through a strategic alliance aimed at transforming the Malaysian electrical and electronics (E&E) industry and contributing to its technological advancement,” he further added.

In Asean, the construction of buildings and other large properties is progressing along with population growth, and demand for commercial air conditioning is growing steadily.

In addition, the global market for air conditioning using heat pump technology with high energy-saving performance, A2W, and “water circulation air conditioning” in the commercial domain is expanding.

In this environment, it said by operating a new R&D building, it will strengthen its research and development.

The new building, which is adjacent to PAPARADMY’s current experimental and office building, has three floors with a total floor area of 10,900 sq m.

In the building, there are offices on the third floor considering hiring more staffs in the future, and various laboratories on the first and second floors.

The company added the size of the laboratory will be expanded approximately 1.6 times in addition to the current building to strengthen research and development.

Aside from “simultaneous hot water and air conditioning multi-test laboratory” to shorten development lead time, the building will also be used for R&D activities such as conducting various experiments involving equipment for commercial air conditioning, and strengthening local development capabilities as well as accelerating the development of heat pump water heater with natural refrigerant (air to water) for European market.

Source: Business Today

Panasonic’s New R&D Building For Asean, European Market Starts Operation In Malaysia

Cypark Resources Bhd is expected to improve its margins and cash flow upon the approval of the tipping fee revision, while its green energy plant is estimated to reach maximum capacity in the near term.

Public Investment Bank (IB) Research said the group’s discussion on the tipping fee revision, which is at RM33 per tonne, had received favourable response from the authorities and upon approval, will impact Cypark significantly.

The research house said Cypark’s green energy plant had resumed operations following the plant outage that required repair during the period, which subsequently pulled Cypark’s losses due to the waste-to-energy (WtE) segment from lower sale of green energy.

The plant at Ladang Tanah Merah, Negri Sembilan is expected to reach its maximum capacity of 20MW soon.

On a separate note, Public IB Research said that although the commercial operation date has yet to be announced, the group completed the large solar scale 2 (LSS 2) Danau Tok Uban and LSS 3 Merchang plant last December.

“We do not discount slight delays in the completion date, although it has resumed active progress on both of the projects after the injection of funding from its new major shareholders via a perpetual sukuk,” the research house said in a report.

The local renewable energy player has reported a wider core net loss after tax and minority interest (latami) of RM4.8mil in the second quarter of financial year 2024 (2Q24), as compared to the loss in the previous quarter of the same year with RM2.3mil.

Its loss before tax was also wider in 2Q24 compared with 1Q24 at RM9.1mil and RM6.2mil respectively.

Public IB Research noted that the wider losses were attributable to higher net losses from its WtE segment arising from the plant outage.

The research house said the latami during the first half of FY24 of RM7.2mil was below Public IB Research and consensus full-year net profit expectation of RM20.3mil and RM19.7mil respectively.

In light of the WtE plant outage and probable delays in the commercialisation of LSS and LSS 3 facilities, the research house said that it has lowered its FY24 prediction to net latami of RM9.3mil.

Public IB Research also lowered its forecast for FY25 and FY26 by 49% and 24% respectively, to account for delayed plant optimisation.

Public IB Research maintained its “neutral” recommendation with lower sum-of-parts based target price of 80 sen per share.

Source: The Star

Cypark’s green plant to reach maximum capacity

Sunview Group Bhd has via its wholly-owned Fabulous Sunview Sdn Bhd inked a Memorandum of Understanding (MOU) with Saudi Arabia-based Vision Ambassadors Company for International Trade Consultancy to seek renewable energy development and investment opportunities.

In a statement on Tuesday, the renewable energy company said the collaboration will jointly identify locations of potential projects, with both parties serving as the principal investors.

Vision Ambassadors, according to Sunview, specialises in investments for the development of businesses and small enterprises, with “tremendous momentum in international and local relations”.

Sunview will be exclusively in charge of engineering, procurement, construction and commissioning (EPCC) related tasks for the potential projects.

“We are thrilled to collaborate with Vision Ambassadors. We will not only explore opportunities within Malaysia but also across other regions, including Saudi Arabia, Middle East, Africa as well as Southeast Asia.

“This endeavour aims to extend our geographical footprint beyond the Malaysian Market,” according to Sunview Group Executive Director and CEO, HP Ong.

The group is optimistic that the MOU will yield a fruitful outcome, Ong said, given the sustained demand for renewable energy.

Sunview shares closed one sen or 1.35% higher at 75 sen on Tuesday, giving the group a market capitalization of RM351 million.

Source: The Edge Malaysia

Sunview inks MOU with Saudi-based firm to collaborate on renewable energy projects