In this second instalment of a two-part series on Bintulu Port Holdings Berhad (BPHB), chief executive officer Datuk Mohammad Medan Abdullah, talks to New Sarawak Tribune on the company’s revenue stream expansion plans, the challenges faced by its subsidiaries, its targets and commitment to CSR programmes.
New Sarawak Tribune: What are BPHB’s targets for 2021?
Datuk Mohammad Medan: Despite the ongoing Covid-19 outbreak, Bintulu Port Holdings Berhad Group’s target for 2021 is expected to be positive with a register in growth. The realisation of the target is through the continuity of our Business Response Plan and the pursuance of our business plans and initiatives. We also target to finalise and formalise our concession agreement with the port authority in 2021. The board has made this one of the key priorities for this year.
The Sarawak BioHub Port and industrial estate development, located on 2,500 hectares of land between Bintulu and Samalaju with an estimated development cost of RM20 billion over 10 years, is expected to kick-start in the first quarter of this year. The port is to be operated collectively by Bintulu Port and the Port of Rotterdam. Could you elaborate on this project?
To clarify on the above statement, the Bintulu Port Sdn Bhd and Samalaju Industrial Port Sdn Bhd are both operated and owned by Bintulu Port Holdings Berhad. Port of Rotterdam in this context, act as one of the project-study partners, by providing the port expertise and knowledge to determine the viability of the project.
We recently signed the MOU with the project study partners to embark on a collaboration to study the feasibility of a Biohub facility in Sarawak. The study of this project is still ongoing, and is expected to be completed by end of July 2021.
Does BPHB have any plans to improve the operational efficiency and management of Bintulu Port?
We have set our sights on a new aspiration and vision of becoming a world class port operator in 2017. Since then, we have been focusing on three strategic thrusts, one of which is to institute operational excellence. We have started several transformation programmes that are still ongoing, and focus on improving several key areas which are our people, operations and our service delivery to our customers.
Furthermore, we are progressively moving towards becoming a smarter and greener port, by diligently adopting best practices as well as available technology that will enable us to become a net zero-carbon port by 2030.
Does BPHB have any plans to expand its revenue stream?
Yes, BPHB does have plans to expand its revenue stream. It is a part of our strategy and business plan initiatives. We have set ourselves a BHAG target in the next four to five years to achieve RM1 billion operating revenue.
What are some of the key challenges faced by each of BPHB’s subsidiaries and how are they being addressed?
Since we started operations, we have been highly dependent on revenues generated from LNG cargoes. Over the course of the years, our strategy has been to shift this dependency on a single type of cargo as the main source of revenue by diversifying into other mixtures of cargoes handled. This strategy has proven to be very effective as we can now see a balance between LNG and other cargoes handled. Following this course of trajectory, we project to handle more non-LNG cargoes in the future.
BPSB also faces limited available land area for further port expansion coupled with poor hinterland connectivity to infrastructure. This limitation however can be partly mitigated by the completion of the Pan Borneo Highway which we opportune will stimulate the state economy as well as make a stronger case for attracting local and foreign investments.
For our bulking facilities under BBSB, sanctions and regulatory requirements by importing markets pose a larger challenge for us. Despite this, we are confident that palm oil growth opportunities are abundant. In terms of BBSB, we are ready to cater to higher demands, by having allocated available space for future expansions.
Our newly minted port SIPSB which is located adjacent to Samalaju Industrial Park relies on investments within the Sarawak Corridor of Renewable Energy or Score agenda. In other words, there is a reliance on current Score players to deliver value as well as attract more investors to operate at Samalaju. This is made more challenging since Samalaju itself is a green field site. Therefore, further development of commercial and logistic support industries must be initiated to support sustainable growth within Score. We have been working closely with the relevant public agencies as well as the state to attract more investors to Samalaju.
Overall, our business landscape is dynamically shifting in these unprecedented and turbulent times, which in turn affects trade and demand. This fluctuation creates a challenge for us to match our port capacity to cater to port users. Considering this, we have in place comprehensive terminal service agreements with port users. Furthermore, considering the rising costs of doing business within the industry, we are managing this challenge via cost management initiatives which are currently in place. It is very important to address these challenges in order for us to achieve our stipulated profit margins.
These challenges are being mitigated through our business response plan, as well as identified strategic plans and current business objectives.
The management is grateful for the excellent steering and guidance by the board of directors comprising eminent, well-qualified and extremely experienced people.
Are there any plans to upgrade or add to the port’s equipment and facilities?
Yes, certainly. Our philosophy when determining whether to add or upgrade our equipment and facilities is always founded upon a solid business case that matches up to demand. Currently, we are looking at expanding our container terminal capacity in the near future.
One of BPHB’s strategic thrusts is embarking on smart and green port, with the Smart Digital Green Port (SDGP) Blueprint being commissioned by Bintulu Port Authority as a way to address sustainability. What has been the impact of this so far and have there been any new developments with regard to sustainable initiatives?
The Smart Digital Green Port Blueprint outlines our long-term plan and sustainability objectives more specifically in the economic, social and environmental dimensions.
In 2020, we conducted a carbon footprint calculation exercise to ascertain a baseline of our carbon emissions resulting from our port operations and activities. The resulting exercise has enabled us to plan out a list of activities that has to be implemented for the next five years for us to be a zero-carbon emissions port by 2030.
Starting from this year, the allowed sulphur emission from vessels is reduced from 3.5 percent mass by mass (m/m) to 0.5 percent m/m. From this new requirement, we are also looking into having an on-shore power supply service for any vessels berthing at Bintulu Port. Lastly, the bunkering of low sulphur fuel services will also be provided to minimise sulphur emission in complying with IMO requirements.
It was reported in BPHB’s integrated annual report for 2019 that the Group was in the process of implementing environmental software for real-time environmental monitoring at Bintulu Port. How has the progress been thus far?
We have since installed a water quality sensor at our palm oil jetty and bulk cargo wharf and an air quality sensor at our multipurpose terminal operation area, as part of our real-time environmental monitoring system.
These sensors will enable us to prevent the introduction of dangerous particles into our areas of operations, such as oils in the port waters or hazardous materials such as nitrogen oxide in the air.
In the unlikely event that such an incident was to happen, we are now able to construct a predictive model of the contamination using this system, which will help us to determine the best scenarios and approaches in containing the contaminants.
What are some of the measures taken by BPHB and its subsidiaries on environmental conservation?
Two years ago, we started a CSR programme called ‘plogging’, which combines jogging with picking up litter. We believe we are one of the first organisations in the country to start such a programme. Other organisations in Bintulu such as Petronas have since followed suit and started their own plogging events as well. We have had three plogging events to date and look forward to more once the pandemic is under control and the virus has been eliminated completely.
Since then, we have planted countless trees in different locations, the latest one being the Forest Landscape Restoration programme in collaboration with the Forest Department where we planted many species of native trees all over the course at the Bintulu Golf Club in December last year.
We also started an energy conservation programmed called Biport Hour that encourages prudent consumption of energy within our offices. In line with this, we release monthly newsletters to our staff to remind everyone to practise switching off unnecessary lights and electronic devices, such as printers when not in use in our offices and buildings.
How has BPHB given back to the local community?
We have never failed to engage with our community since we started. We conduct our CSR programmes all year long, annually. Our CSR focuses on four key pillars which are engagements, education, health and the environment.
Last year itself, we have undertaken various CSR programmes. One of the most significant programmes saw us collaborating with the largest intra-Asia shipping line, SITC Container Lines to bring in additional PPE’s from China directly into Bintulu. Together with SITC, we distributed the additional PPE to four major hospitals in Bintulu and to other parts of Sarawak. We were the first to mobilise and organise a large-scale community support programme at the start of the pandemic in Bintulu.
We have been particularly active in extending aid to fire victims, especially in our continuous donation of equipment to Bintulu Hospital over the course of years. We also helped 43 families who lost their homes in 2019 to a fire in Belaga by aiding in the rebuilding efforts as well as providing the materials needed.
