ASEAN ports buck global trend with wave of expansion and refitting

September 21, 2016

BANGKOK - Suppliers in the ASEAN ports sector are riding a wave of opportunity as the industry upgrades to handle bigger ship sizes, according to a HKTDC research report, which says substantial investment is now being made in ports, transport infrastructure and logistics hubs across the region.

The bullish outlook centres around a widely-acknowledged need for the region's ports to upgrade infrastructure to handle ever-increasing ship sizes, delegates to an international  conference in Bangkok have been told, and is being further bolstered by demand for new and upgraded ports across the ASEAN bloc, most notably in Vietnam, Cambodia, Indonesia, Myanmar and the Philippines.
Steady relocation of manufacturing operations from China to Vietnam, Cambodia and Myanmar is forcing these countries to expand their ports at all levels - and to develop new facilities.
One of the knock-on effects of new ports has been that existing facilities need to work harder to hold onto business, often needing to invest in new equipment and systems to drive cost efficiencies. A prime example is Laem Chabang, Thailand's largest port.
Chai Naganidhi, President of the Thai International Cargo and Container Terminals Association (TICTA), the trade body that represents terminal operators at the port, says that despite last year's slowdown in Thailand's economy, the port still delivered growth of 3%.
"One of the key issues we've been raising with authorities is infrastructure access to the port. Road access has proved something of a bottleneck, and is now a problem we have to deal with on a daily basis. On behalf of our members, we are also pushing for improvements across a broad range of other issues, including purchasing, policy, customs and marine regulations."
Jeffrey Foo, Regional Manager of Konecranes, a Finnish specialist in lifting equipment and modernisation services for industrial cranes, said changes to Thailand's administration had meant that a number of long-postponed development projects are now back on track.
“The country is proactively expanding its port facilities and upgrading the standards of its services on both a domestic and international scale,” he said.
Another welcome business driver comes from Indonesia and the Philippines, two of the fastest-growing ASEAN countries that, as archipelagos, require substantial investment in domestic shipping infrastructure to connect their component islands.
According to the World Bank, about 90% of Indonesia's external trade is transported via its 300 or so seaports, with inter-island shipping still the primary means of moving goods through these ports, rather than rail or road freight.  www.hktdc.org (ATI).