Riding the Recovery Wave

The Star | 5 July 2021 | ROYCE TAN | PETALING JAYA

The ports and shipping industry is arguably one of the fastest to have bounced back in an economic environment ravaged by Covid-19.

Being the key connector of supply and demand globally, industry players were initially affected when the world went into a lockdown sometime in March last year but it barely lasted a few months.

One year on, the industry is facing a shortage in containers to cope with the heightened demand and some ports have even recorded historical high container throughputs.

For ports service provider Usaha Teknikal Sdn Bhd, the pandemic and the resultant restrictions that were implemented may have been a blessing in disguise.

Managing director Syed Sadiq Albar said they experienced the most significant drop in volume from March until May last year, but the overall sentiment was still positive then.

“The volume started picking up to estimated pre-pandemic targets after June 2020 and the third quarter saw a steep uptick.

“We expect that momentum to continue right into 2021 as the prices of commodities such as palm oil are at a peak.

“For ports, a strong recovery is on the cards. The shipping rate is at the highest in 30 years, due to shortage of container boxes, but it’s a temporary situation. The economic recovery will be driving it over the medium term,” he told StarBiz in an email interview. Commenting on the latest restrictions or lockdowns in place, Syed Sadiq said the company did not foresee any major hiccups.

There may be a slight dip but he noted that it would be nothing alarming and should be in line with cyclical factors.

“Despite the challenges, the port and logistics industry in Malaysia proved to be resilient and registered profits throughout the period.

“It gave us the affirmation and confidence that we are in the right sector and we have continued to build on our customer base.

“We have also instituted cost-cutting measures to improve our competitiveness over the long term,” he said.

Syed Sadiq added that the movement control order last year has allowed them to understand their clients’ needs better, quicker decision making through virtual meetings and also helped to improve their organisational structure.

“We believe we have a role to play as an example to other small and medium enterprises in the sector that it is possible to thrive even during a pandemic, if you are organised,” he said.

Usaha Teknikal is working on several projects in Johor, Penang, Sabah, Sarawak, Brunei and Indonesia and the company is looking to expand its services into the port sector at local and regional levels.

It was recently awarded a five-year contract in collaboration with its local Bruneian partner, for the leasing of mobile equipment and the comprehensive maintenance of port equipment at Muara Port Brunei.

“We are also providing a new fleet of equipment including terminal tractors and reach stackers.

“Every box that goes to and from Brunei, anything that comes through containers, is handled by equipment that is maintained by our technical team,” Syed Sadiq said.

Locally, Usaha Teknikal secured a contract for the operations of two grab bulk unloaders at the port in the Lahad Datu palm oil industrial cluster (POIC Lahad Datu).

The Muara Port and the POIC Lahad Datu contracts are for five and three years respectively, giving the company a good opportunity to explore more prospects in the region.

Usaha Teknikal is also in the process of completing the second refurbishment for ship-to-shore cranes at the Johor Port.

Syed Sadiq added that the company has also secured a short-term project in Indonesia, a market that it is very optimistic about.

He said Usaha Teknikal’s expansion plan is not limited to Brunei and Indonesia as it is also focusing on expanding to other South-East Asian countries.

“We have grown at a rate of 75% annually on average for the first three years and we look to keep our momentum going.

“Recently, we were also awarded a crane upgrade project in Doha, through our technology partners from China.

“This has to do with upgrading rubber-tyred gantry cranes to a hybrid version,” he said.

Asked if Usaha Teknikal has plans to go public, Syed Sadiq said it is something they were open to explore.

“However, timing is crucial and we are very focused on what we do.

“We have put together a strong team and the experience of our key members is an important asset for us.

“Ensuring that we deliver on our promise to our clients will be reflected in our earnings and the confidence our clients have in us will be clear when they engage us for more jobs,” he said.

News Article Source : https://www.thestar.com.my/business/business-news/2021/07/05/riding-the-recovery-wave

Photo Article : Usaha Teknikal Sdn Bhd Managing Director, Syed Sadiq Albar (left) and Sales Director, Alizi Ismail (right). The port and logistics industry is resilient, according to Syed Sadiq.