KUALA LUMPUR (May 5): Malaysia Bunkering Association (MBA) and Malaysia Shipowners’ Association (Masa) raised concerns about the scarcity of funds provided by financial institutions to the sector.
Masa chairman Mohamed Safwan Othman said securing finance is challenging as banks have listed maritime as a high-risk sector, particularly after the Covid-19 pandemic.
“Previously, we had a specific maritime fund under Bank Pembangunan Malaysia. In 2013 and 2014, the fund size was RM2.5 billion. It was reduced gradually to RM2 billion and recently to RM1 billion. This RM1 billion is being shared among maritime and other transport industries,” he said at the agreement signing ceremony between MBA and Masa on Friday (May 5).
He added that the association seeks government facilitation to look into this, as maritime business investments are typically big in scale and highly capital intensive.
The chairman added that the association hopes to address this issue at the National Shipping and Port Council (NSPC) meeting.
“It is important to have the Finance Ministry (MOF), Bank Negara Malaysia (BNM), and also specifically Bank Pembangunan Malaysia, where it (NSPC) has a mandate to spur the maritime industry in Malaysia, “ Mohamed Safwan added.
The NSPC meetings were first organised in 2018 by then transport minister Anthony Loke Siew Fook.
Meanwhile, MBA vice chairman Sum Ang Kek said financing the purchase of larger vessels such as double-hull double-bottom (DHDB) is difficult, due to the higher cost of investments compared to smaller ships.
“The second-hand DHDB can cost US$5 (million)-US$6 million. New vessels are even more expensive,” Sum said.
Transport Minister Anthony Loke Siew Fook said that the size of the bunkering market — with a 4% growth annually — will reach US$160 billion in 2030, compared to the world’s bunker fuel market, estimated at US$110 billion in 2020.
MBA and Masa signed a memorandum of understanding (MOU) to collaborate for three years to jointly promote the employment of local vessels and provide opportunities for Malaysian players in bunkering and trade activities.
The MOU is expected to help contain the outflow of funds by prioritising local bunkering players. It will also address illegal activities in the bunkering and shipping scene.
The signatories will also share information about their registered members upon request, and share the latest news or regulations on the Malaysian marine and the International Maritime Organisation.