MALAYSIA’S shipping industry, badly hit by overcapacity and a slowdown in the oil and gas (O&G) sector, is banking on the Malaysia Shipping Master Plan (MSMP) for a revival.
Association of Marine Industries of Malaysia (AMIN) honorary secretary Nazery Khalid said as Malaysia increasingly depended on shipping business to facilitate its trade and O&G industry, the country needed to develop the sector in a cohesive and strategic way.
“Having a master plan is long overdue.
(The) shipping (sector) requires huge capital expenditure and a conducive environment to foster the development of local tonnage and enable local companies to prosper.
“This can be created through policy intervention or government support, which a master plan can help articulate and spell out,” Nazery said in an email interview.
He said Malaysia must put in place a facilitating environment to attract shipping lines to its ports amid growing competition.
“A master plan... can also help the local shipping sector to adjust to the fluid and dynamic nature of global shipping, in terms of environmental protection, navigation safety, security of ships, crew and cargo, and other aspects,” he added.
The MSMP was reportedly close to being completed at the end of last year.
The Transport Ministry, through its agencies including the Marine Department and the Maritime Institute of Malaysia, has worked closely with industry representatives in drafting the MSMP.
It is learnt that the MSMP is proposing, among others, the participation of Malaysia’s fleet in the global energy and intra-Asean trade shipping, and the expansion of their operations in the domestic market.
Nazery said as local shipping companies continued to be impacted by the downturns in supporting sectors such as the O&G, companies could do well through consolidation such as by exiting non-core business, merging with other companies, and focusing on asset maintenance and integrity.
“The strategy would also ensure that they are in tip-top conditions to enable them to reduce maintenance cost and position themselves better to win contracts, improve operational efficiency, relocate workers in areas which generate income, right size or reduce manpower, or upgrade their skills in preparation for the eventual turnaround of the shipping market,” he said.
Nazery said the association also expected more vigorous merger and acquisitions to take place.
Some form of “corporate Darwinism” would and should take place, which would result in the survival of the fittest to attain some semblance and equilibrium between demand and supply of shipping services, he added.