GEORGE TOWN – Penang Port could become a major hub for e-commerce in the region, following the federal government’s decision to award free commercial zone (FCZ) status to its sprawling north Butterworth facility.
Penang Port Sdn Bhd (PPSB) chief executive Datuk Sasedharan Vasudevan said the port has been lobbying for the move for the past two decades, as the status has already been given to ports like Westport in Port Klang and Tg Pelepas in Johor.
He said the status, to now be observed at PPSB’s North Butterworth Container Terminal (NBCT), will enable e-commerce distributors and service providers, such as Amazon and Lazada, to consider using the hub to repackage and distribute items throughout the region.
“It will also attract more foreign and local investors to Penang,” he added in an interview with The Vibes.
Penang Port is already designated as a free zone for trade and industry, along with Penang International Airport in Bayan Lepas, Penang Air Cargo Complex in Batu Maung, as well as the Bayan Lepas Free Industrial Zone and Prai Free Industrial Zone.
Sasedharan said with the FCZ status at NBCT, exporters using the port can consider marketing to countries like Thailand, Myanmar and India due to better logistics, while cutting down on cost and distribution time.
He said it will also entail less documental procedures, and allow traders to enjoy more value in repackaging their items for the domestic or overseas market as the rates will be duty-free.
He added that it will allow for consolidation, especially with the shift towards digital-driven trade and services.
“We expect international firms to take advantage. The spillover effects from this will be shared by local shipping lines, agents and forwarders, who can expect more import and export volumes.”
When the port expansion is completed through a reclaimed parcel, said Sasedharan, cottage industries can be set up within the FCZ area for direct repackaging and re-export, and there will also be more opportunities for warehousing and holding facilities for cargo.
He said FCZ resembles a value-added transit zone, where instead of undergoing passport stamping and confinement until the next journey commences, it allows free movement within its boundaries.
Announcing the matter on Friday, Penang Port Commission (PPC) chairman Datuk Tan Teik Cheng said the FCZ status will create jobs and boost domestic manufacturing.
“PPC and PPSB will strive to improve our services to attract more foreign investors to use the port in the state, and attract more foreign investors to set up their plants here.”
State PKR vice-chairman Jason Ong said Penang will flourish as a free trade zone, adding that the status will stimulate the economy.
“Even as the world recovers from the pandemic, things still need to be manufactured and moved around in the world, and Penang fulfils all the criteria as a safe and sustainable environment for investors.”
Even though Penang Island’s free port status was taken away in 1967, the state still managed to thrive. To date, Penang is the fourth-largest contributor to the country’s gross domestic product.
“Penangites are hardworking, resilient and dynamic. I am sure that with the upgraded FCZ status, the state will be able to contribute even more to the country,” said Ong.
He added that the state has a highly versatile and competent workforce, with good infrastructure, which will attract investors. – The Vibes, January 31, 2021
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