KUALA LUMPUR (March 3): Straits Inter Logistics Bhd today signed a binding definitive agreement with Labuan Port Authority to operate and manage the Labuan Liberty Terminal, after announcing the six-year contract in January.

The contract serves as an opportunity for the company to venture into port management services, which complement its existing oil trading and bunkering services business, said Straits Inter Logistics director Tan Sri Mohd Bakri Mohd Zinin in a statement.

The new services, which will commence on April 1, include container operations, breakbulk, berthing and mooring, harbour tug services, stevedoring, bunkering, and ship chandler to container and conventional vessels.

The contract will be undertaken by the company’s 51%-owned subsidiary, Megah Port Management Sdn Bhd, in which the remaining 49% stake is held by LPM Holdings Bhd.

Bakri said the port management industry in Malaysia grew from RM4.9 billion in 2014 to RM5.3 billion in 2018, representing a compound annual growth rate (CAGR) of 2.0% during the period.

It is expected to further grow to RM5.6 billion in 2021 domestically, registering a CAGR of 1.9% between 2018 and 2021, he said.

Labuan Liberty Terminal is situated on an island off Labuan.

Bakri noted that the Labuan Development Blueprint 2030 was launched in January 2018 to drive the transformation of Labuan into a smart and sustainable city.

“One of the plans is to strengthen the island's logistics, through the enhancements of cargo facilities and infrastructure. The initiative shall help to create demand for port management services to facilitate the seamless administration of the various port activities,” he said.

Straits Inter Logistics’ 55%-owned subsidiary, Tumpuan Megah Development Sdn Bhd, currently operates in eight ports, namely Lumut, Pasir Gudang, Tanjung Pelepas, Johor Bahru, Kuantan, Kemaman, Kuala Terengganu and Labuan.