BMI's Executive Summary

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Malaysia Mining Corporation (MMC), a diversified infrastructure and energy group, in September 2007, signed an agreement with the government of Dubai to build a major port in Malaysia's southern state of Johor. Under the terms of the agreement MMC and port operator Dubai World would develop a MYR16bn (US$4.7bn) maritime centre, including an oil terminal, drydocks, a shipyard and cargo handling facilities. MMC said that the project would bring Dubai World's expertise and experience to the development of South Johor's hinterland, unlocking the potential of the company's 2,255 acres of land at Tanjung Bin. Work on the project was expected to start before the end of 2007, with completion in the second half of 2010. Analysts said that, when completed, the maritime centre was likely to compete head on with the port of Singapore. Malaysian businessman Syed Mokhtar Al-Bukhary controls MMC. Dubai World is controlled by the government of Dubai. Trade and investment flows between Malaysia and the Gulf countries has been increasing recently.

BMI sees the net effect on our Malaysian shipping forecast as being positive. Our newly released Malaysia Freight Transport Report concludes that in terms of freight carried, shipping traffic will grow by an average 7.1% per year in 2007-2011. The total number of containers handled at Malaysia's ports will grow more strongly at 10.9% per year. Despite the mixed outlook for freight rates, the continuing export drive and the dynamism of China and other regional trading partners will underpin strong demand.

We now expect total freight carried, measured in million tonnes-km (mntkm), to grow by an annual average of 7.0% over the 2007-2011 period. Total road freight turnover is expected to grow at an average annual rate of 6.6% in 2007-2011. The cross-Malaysia railway link project is being revived, but will not become operational until after 2011. We expect rail freight traffic to perform reasonably well, with annual growth averaging 6.5%. Air freight will grow by a strong 8.6% per annum, with pipeline throughput not far behind at 6.8%. Malaysia scores reasonably well on our overall freight industry business environment ranking. The total score of 43.0 out of a theoretical maximum of 70.0 places it close to the average for the regional peer group (44.7). It is at the top end of the spectrum in terms of expected freight transport growth and scores well as far as long-term economic risk, transport infrastructure growth and the regulatory and competitive environments are concerned.

For the 2007-2011 forecast period, we expect the transport and communications sector to continue outpacing the economy as a whole by a small margin. It will achieve average annual growth of 5.6%, versus 5.4% for overall GDP. The total value of the transport and communications sector will rise to US$18.9bn in nominal terms by 2011, representing 7.4% of Malaysia's GDP.

Contents

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Chapter 1 - Executive Summary

Chapter 2 - SWOT Analysis

Malaysia Transport Industry SWOT

Malaysia Economic SWOT

Chapter 3 - Business Environment Overview

Asia Pacific Freight Business Environment Ranking

Business Environment Ranking

Economics – Long-term Risk

Politics – Long-term Risk

Freight Transport Growth

Transport Infrastructure Growth

Regulatory Environment

Competitive Environment

Transport Intensity Index

Political Risk Summary

Economic Risk Summary

Business Environment Risk Summary

Legal Code/Corruption

Red Tape

Labour Force

Chapter 4 - Industry Trends And Developments

Road

Rail

Air

Sea

Chapter 5 - Industry Forecast Scenario

Table: GDP, Population And Output

Transport Outlook

Freight carried (domestic and international):

Table: Annual Transport & Communications Sector Forecasts

Chapter 6 - Country Snapshot: Malaysia Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education And Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption And Stratification

Table: Wages Per Annum

Chapter 7 - Trade Environment

Foreign Trade Regime

Overview

Trade Agreements

Tariffs

Table: Malaysia – Value of Imports by Category (US$mn)

Table: Malaysia ??– Value of Exports by Category (US$mn)

Table: Top Export Destinations

Table: Top Import Sources

Table: Export Trade, % y-o-y

Table: Import Trade, % y-o-y

Chapter 8 - Market Overview

Multimodal

Infrastructure

Road

Competitive Landscape: Road

Rail

Competitive Landscape: Rail

Company Profiles

Keretapi Tanah Melayu (KTM)

Air

Competitive Landscape: Aviation

Company Profiles

Malaysia Airlines System (MAS)

Water

Competitive Landscape: Maritime

Company Profiles

Malaysia International Shipping Corporation Berhad (MISC)

Chapter 9 - BMI Forecast Modelling

How we generate our industry forecasts

Transport Industry

Sources

Chapter 10 - Appendix: Regional Demographic Data

Table- Manufacturing Wages (ave per annum), US$

Table - Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Competitive Landscape for Asia Freight Transport Reports: Sample of Companies Ranked

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Analysis of latest projects across the freight transport sector – road, rail, air, sea, logistics – including market overview which provides an outline of the key elements driving development. SWOT analysis of the state’s business environment, transport sector, politics and economics, which carefully evaluates the short- and medium-term issues facing the industry.

Network of Asian Freight Transport Sources

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BMI's Asian Freight Transport Reports are based on an extensive network of multilateral organisations, government departments, freight transport industry associations, chambers of commerce and company reports. Information sources include: