Since it terminated its management contract with the Jebel Ali Free Zone Authority (Jafza) in July 2007, the Port Klang Free Zone (PKFZ) in Malaysia is taking a new business approach, characterised by a re-branding exercise aimed at creating an identity free from the once strong influence of Jafza.

"It was imperative that the PKFZ came out with a new business direction to capitalise on its competitive advantages, optimise its resources and competencies, and ensure that it remained focused,'' Chia Kon Leong, PKFZ's general manager, told Cargonews Asia.

In keeping with this strategic approach, five industry segments have been identified. They are oil and gas, automotive, halal, palm-oil and logistics.

According to Chia, the PKFZ offers an ideal location for the upstream oil and gas industry. "As an integrated free zone, manufacturing of oil and gas equipment, including massive sub-sea equipment such as Christmas trees, pipes and pipe fittings, pressure vessels and other related equipment and components, can be carried out in the zone. Most of the components, materials and finished products imported can be easily shipped out either in containerised or non-containerised form."

In contrast to Singapore's vehicle transhipment hub, Port Klang, which has been traditionally handling vehicles and automotive components for the domestic markets, will also be developed as a hub for automotive trading and auction, a business that is gradually spilling over from Japan, Chia said.

The Malaysian government is also keen to develop a global halal hub in collaboration with the Malaysia-based Halal Industry Development Corporation (HDC). A dedicated zone for the halal industry - food and non-food manufacturing activities - is being set up in the light industrial area with at least 50 acres of land earmarked for manufacturing activities.

"The global halal industry business is growing fast with a customer base of two billion Muslims and a potential market outreach of over eight billion people worldwide," Chia maintains.

"With HDC's support, PKFZ will be able to provide a one-stop-centre for halal certification, audit, training and other services," Chia said.

The shifting of two biodiesel companies to the PKFZ in 2007 was motivated by the logistical advantages of being within the direct proximity of a port, enabling the companies to check transport costs.

The PKFZ complements Malaysia's concept for downstream development of the palm oil industry, including a wide range of manufacturing activities such as biomass, food industries, nutraceutic/phytonutrients, oleo chemicals and biofuel. Most of the halal products use palm oil derivatives as raw materials.

Chia said that the logistics industry segment plays a vital role to support the manufacturing and trading activities in the PKFZ. It is believed that the four industries identified would generate substantial cargo volume in the free zone, thereby increasing demand for logistics services.