STATUS OF AMPANG LRT

KUALA LUMPUR (July 11, 2012): Syarikat Prasarana Negara Bhd (Prasarana) has yet to make a final decision on the awarding of contracts for the Ampang Light Rail Transit (LRT) extension project work.

“We have yet to make a final decision on the work contracts. It is unethical for us to comment at the moment. We will provide all the details after the Finance Ministry announces its decision,” Prasarana’s media affairs manager Azhar Ghazali told theSun today.

NEW CEO AT NORTHPORT

Monday June 25, 2012

Abi Sofian takes on challenge

Northport (M) Bhd CEO Abi Sofian Abdul Hamid is set to prove that he is not just the seasoned operations guy at Northport but also someone who can take care of the dollars and cents, and a be good employer. In his first ever media interview, the port’s new top brass shares with StarBiz reporter Sharidan M. Ali his thoughts, vision and business direction of the company.

PETALING JAYA: Lenggong-born Abi Sofian is not a new face in the port industry especially in Northport where he started his career back in 1991.

He was part of the team led by Northport former managing director (MD) and chief executive officer (CEO) Datuk Basheer Hassan Abdul Kader, which navigated the the merger of Klang Container Terminal (KCT) and Klang Multi Terminal into Northport.

When he was younger, Abi Sofian, 50, did not think that he would end up in the port industry until it was time for him to settle down.

“I came to Port Klang as a civil engineer with an Australian consultancy firm which was involved in the upgrading of facilities at KCT.

Abi Sofian: ‘There are still areas with good potential to be realised. Developing a s trategic human capital is one area.’

“At the end of the project in 1993, I was asked whether I was interested in joining KCT.

“Having spent about two and a half years working literally above water, I thought it was a good opportunity for me to finally settle down at one place and learn more about marine engineering from civil engineering practices,” he said.

Soon after, KCT set up a facilities department to look after all engineering related works other than those involving terminal equipment. “I was re-designated as facilities engineer. My involvement later expanded to include corporate matters such as looking at lease terms on infrastructure, facilities aspects, contracts for civil works and corporate branding. I took my new responsibilities quite seriously and I decided to study law in 1996.”

As Northport was established, Abi Sofian found the issues in the port operations very challenging and exciting.

“I began to interact with other departments especially the business units as they needed my involvement in their capacity planning.

“With further exposures in the port industry like government agencies, regulators, business groups, I supposed I was then embedded in the port industry,” he said.

Northport, which is owned by NCB Holdings Bhd, appointed Abi Sofian CEO in April. “I was totally surprised when I was offered the job. I did not have the slightest idea that the person would be me.”

Rather than feeling pleased, he considers the job a challenge.

“I intend to take the port to greater heights by continuing what Datuk Basheer had left behind and introduce some new things to further improve the operations,” he said.

The affable and ever-smiling Abi Sofian said years of involvement in the operations of the terminal was an advantage. He can now focus on sharpening his skills in corporate and financial aspects.

According to Abi Sofian, Basheer placed a good working structure in defining the business profiles of Northport as well as the harmonious working relationship between employees and management team.

This conducive environment would be retained, he said.

“In spite of this, I believed there are still areas with good potential to be realised. Developing a strategic human capital is one area.

“I believe a fully developed employee will not only able to positively contribute to the company but the nation as well.

“I am also a true believer in key performance index but we have to spend some time to come out with the right and realistic target and benchmarks.

“Of course as a trained engineer, I subscribe to the importance of systems and processes as well,” he said.

Focusing on the port business, Abi Sofian is an ardent believer in bottom line performance.

“Although I admit that the volume growth is important, we do not deliver the containers to the shareholders, we deliver profit,” he said adding that Northport was targeteting to handle 3.2 to 3.3 million twenty-foot equivalent units (TEUs) this year from about 3.11 million TEUs in 2011.

Abi Sofian said the port would continue to improve its revenue but it would also be looking at cost management to continue get better margins.

“And as a service provider we also must not forget about the quality of service. In a nutshell, all these criteria are the keys to business sustainability,” he said adding that high value boxes also bring better margins to the port.

To a question about whether Northport had been conservative in its annual volume target, Abi Sofian said it was just being realistic. “As the main gateway of import and export, our volume growth is in line with the gross domestic product growth.”

“As of last year, 60% of our volume were import and export boxes while the remainder were transshipments Again, the most important matter is the profit per box that we can achieved rather than how many boxes we can do,” he said.

CANADA MANUFACTURING AND BRITISH MANUFACTURING COMPARED

Canada Creates Manufacturing Jobs

By Martin Murray, About.com GuideJune 15, 2012

As British manufacturing slumps, the factories in Canada are busier than ever, according to Statistics Canada, as almost 115,000 manufacturing jobs over the past six months, the most over any similar period on record. This puts Canada on top of the top 34 richest nations in the world. So how does a country that has high wages, low productivity, and a strong currency, create more jobs than Germany, USA, Japan, and every other developed nation?

Many economists believe that Canadian manufacturers are concentrating on the local market rather than exports due to the strong value of the Canadian Dollar. Another sign of the strength of the manufacturing sector is the new PMI figure which has now reached 54.7 for May, up from 53.3 in April. The PMI is now at its highest level since September 2011. As far as orders, the numbers were also up in May, to the highest level in five months. 

British Manufacturing Declines

The manufacturing sector in the UK is suffering according to the latest figures from the government's Office for National Statistics. Economists were expecting an increase in April's figures and an overall half percent increase since the beginning of the year. However, the actual figures were disappointing with April's figures falling 0.7 percent, which means a 0.3 percent decline for the year.

Economists are predicting a slower second quarter for British manufacturing due to extra public holidays due to Jubilee celebrations, the summer Olympics and the weakness in the economies of other European nations.

Not all manufacturing sectors saw a decline in April; the transport equipment and electronics sector posted the highest increases in manufacturing output. In total, seven manufacturing sectors fell with six managing an increase. 

SHIPPING - back in the black?

Maersk CEO says container rates back in the black 

Container shipping freight rates are profitable again and could rise further if trade picks up over the summer, the head of A P Moller-Maersk, the Danish shipping and oil group, said, reported Reuters.

The recovery in rates could signal a brighter outlook for the global shipping industry, which has struggled to emerge from a four-year slump caused by oversupply of vessels and weak demand due to the sluggish world economy.

"At the moment, freight rates are at a level where container transport is earning money," chief executive Nils Smedegaard Andersen said in a presentation to the Danish Society of Financial Analysts.

"We are still working to get higher rates," Andersen said. "We hope there will be a pick-up in world trade after the summer."
Last month, Andersen had said recent rate increases meant most container shipping lines were probably operating at breakeven levels.

This contrasts with last year when rates plunged towards the middle of the year, which took A P Moller-Maersk's Maersk Line into the red for the year.

Results this year for Maersk Line, the world's biggest container shipping group and a barometer of world trade, are expected to stay negative or "up to neutral," assuming that a rate recovery since March continues, the group has said.

Andersen said last month in the company's first-quarter results presentation that he hoped Maersk Line would get into positive territory this year, but that would require higher freight rates.
But he said on Thursday that the oversupply of ships weighing down the industry would persist for several more years.

"We think there will be overcapacity in container shipping until 2016-17," he said.

Andersen said Maersk Line had the fleet capacity it needed to maintain its market share and did not plan to buy more vessels.
Maersk Line has said its global container shipping market share was 15.5 percent in 2011 and it had 17.8 percent of the market on Asia-Europe routes.

"With the capacity we have, we are well equipped for the next years," Andersen said. At some point, we will go out and order containers, but we have no plans to go out and buy ships."

"We have roughly the ship capacity that's needed to maintain our market share in the next five years," he said.

SHIPPING - restructuring causes job losses

Maersk to restructure, terminate 400 jobs

Danish oil and shipping group A P Moller-Maersk said it would slash about 400 jobs as part of a restructuring of its struggling container shipping division Maersk Line.

The group said in a statement that a key objective of the reorganisation was faster decision-making and that about 250 of the job cuts would be at its Copenhagen headquarters, reported Reuters.

The shipping industry has been hit hard during the global economic downturn as weak demand and excess capacity knocked freight rates to loss-making levels.

Maersk said last month it expected 2012 results "slightly lower" than in 2011, a modest improvement on previous guidance, but below analysts' hopes.

Maersk Line reported a loss of US$599 million in the first quarter. In a stark illustration of the damage caused by excess tonnage in a poor rate environment, Maersk Line’s volume increased by 18 percent while the average freight rate declined by nine percent compared to the first quarter last year.

PORT PERFORMANCE

CMIT sets productivity record for Vietnam

Cai Mep International Terminal (CMIT) this month set two important new productivity benchmarks for container terminals in Vietnam.

While handling Maersk Line’s vessel, the 9,038 TEU Mette Maersk, CMIT moved 2,100 containers during an 11 hour, 30 minute port stay.

Gross crane productivity was 43 container moves per hour, resulting in berth productivity of 183 moves per hour.

“This is certainly the first time CMIT has crossed the important benchmark of 40 crane moves per hour, and we believe we are the first container terminal in Vietnam to have done so”, said Steen Davidsen, CMIT’s general director.

“We also believe our berth productivity of 183 moves per hour using just 5 Ship-To-Shore cranes sets a new benchmark for Vietnam” he added.

CMIT measures berth productivity based on the total time the vessel is available for work on the berth starting from the time the gangway is secured and ending upon time of vessel sailing or half an hour after operational completion should the vessel not sail immediately upon completion.

Time is never deducted from this berth productivity calculation so CMIT’s berth productivity is a true reflection of the time the vessel spends working at the terminal.

“Terminal berth productivity is a critical cost driver for all shipping lines, and high berth productivity translates directly into significant bunker cost savings for us,” said Peter Smidt-Nielsen, general director of Maersk Line, Vietnam.

“Achieving the levels of productivity being delivered to Maersk Line by CMIT is quite remarkable – and particularly so for a terminal that has been operational for just 14 months.”

CMIT handled its first vessel on March 30, 2011, and since then has welcomed 151 vessel calls, handling over 351,000 TEU of export and import containers to and from Vietnam’s major trading partners in Europe, North America and Asia.

PURCHASING

Ethics In Purchasing

By Martin Murray

Every day the media has reports of cases of bribery and unethical business practices that involves the purchasing of materials or services in almost every country in the world. Although we like to think that the people who determine contracts and purchasing agreements are fair and ethical, there are some that will accept coercion that may affect the award of contracts that are worth thousands of dollars to those that are worth millions of dollars.

Purchasing Standards

Every company will hold their employees to a purchasing standard that is put in place with processes, methods and rules to ensure that the procurement process is as fair as possible. However, the purchasing of materials and services is a process that involves the interaction of purchasing staff and potential vendors, which leads to personal relationships and contacts. A purchasingprofessional will naturally call a vendor they have personal knowledge of before they cold call other potential suppliers. The relationship between a company and their suppliers is one that is developed over a period of time and based on personal relationships.

However, the purchasing professional is duty bound to their employer to ascertain the best product or service at the best cost, in the timeliest fashion. Purchasing standards are in place to ensure that the needs of the company are foremost in any negotiations with potential suppliers. The first ethical standards for purchasing professionals were published by the Association of Purchasing Management in 1929.

Actions of Suppliers

Although we expect purchasing professionals to be as ethical as humanly possible, most companies have a sales department whose job is sell your product and that can means having contact with employees of potential clients, which could be purchasing or non-purchasing staff. These sales teams will have budgets to promote products with advertisingsouvenirs, such as pens, calendars, diaries, etc., or more tangible gifts such as lunches. In a number of studies on purchasing it has been found that almost all purchasing professionals accepts something from vendors, even if it as small as an item of stationary.

Although the majority of companies will require purchasing and non-purchasing employees to sign and abide by an ethics policy, smaller companies are less likely to either have or indeed abide by a code of ethics. Small business failure is high and it is vital for companies to win business, and that can come at the expense of ethics.

Non-Purchasing Employees

Although large companies insist on purchasing professionals strictly adhering to ethics codes, the same is not necessarily true for non-purchasing staff. In many companies purchasing is allowed by department heads or even line staff which by-passes the purchasing department all together. This means suppliers sales departments can target non-purchasing staff to gain sales where perhaps they have been rejected by the purchasing department. Much of this rogue procurement is never seen by the purchasing department as it either is paid for a department’s cost center or checks cut by the accounting department.

Rogue purchasing has two major drawbacks for a company. Firstly the spending is never funneled through the purchasing department so there is no way to know if the purchaser obtained the best price for the item. Secondly, the purchaser may have been unduly influenced to make the purchase; perhaps by gifts, personal relationship or even a conflict of interest. Rogue purchases can make up as much fifty percent of a company’s overall spending for a year. If non-purchasing employees are restricted to minor or even zero purchasing, the company would be confident that the purchases were made in an ethical manner and the best product was selected based on price, quality and delivery time.

Summary

Purchasing professionals are an asset to any company. They can save a company thousands if not millions of dollars a year. The way in which they purchase items is vital to the success of a company and a strict code of ethics ensures that all potential vendors are treated equally.