Chairman's Statement
 Overview
Over the last decade, world trade has steadily increased each year. Container traffic is also growing at a rate of about 7 – 8% per year. Much of the increase in container throughput is being fuelled by the robust economic growth of the export-oriented economies of Asian countries, especially China.
Since its establishment in 1988, Portek has grown to become a leading provider of equipment, services and total solutions to the global port industry. We are well-known in Asia, the Middle East, the Mediterranean and the Americas. We are proud to be one of the few companies in the world that are able to provide the entire spectrum of engineering services to our customers: sale or lease of refurbished pre-owned equipment, modernisation and automation services like drive upgrades and position determination systems, surveillance systems and comprehensive equipment maintenance.
Engineering business
A main pillar of Portek’s expertise lies in our in-house engineering knowledge of the port industry. One key trend that has driven demand for our expertise is the increasing demand for equipment modernisation and modification services, resulting from increasing ship sizes and demand for higher productivity.
Portek offers the more cost effective solution of structurally modifying (raising heights and extending booms) existing equipment, rather than for terminal operators to buy bigger and more expensive new equipment.
The second key trend is the continued growth of container trade which has meant that terminal operators attain capacity targets earlier than projected. This results in the need for equipment that can be quickly mobilised to handle the higher-than-expected container throughput. For this reason, Portek maintains a readily deployable inventory of refurbished equipment, strategically located at various parts of the world to service our customers. We are therefore confident of meeting our customers’ needs quickly and economically wherever they may be.
Terminal operations
The second core business of Portek derived from our terminal development and operations expertise. We are able to work closely with port authorities and terminal operators in order to enhance port productivity through the spectrum of port solutions that Portek can provide. Through Portek’s assistance, the efficiency of small to medium-sized feeder terminals can be improved. Going forward, the improved productivity of these terminals will be a critical factor for the global logistics chain, as more and more countries plug into the global market.
 Portek aims to service this industry and thereby play our part in contributing to an increase in the overall effectiveness of today’s ‘hub-and-spoke’ pattern of container shipping.
Today, in Indonesia Portek manages and operates 2 terminals in Tanjung Priok, Jakarta, and 1 multipurpose terminal in Banten, West Java. In August 2004, we entered into a joint venture agreement with Enterprise Portuaire de Bejaia for the formation of a joint venture company, Bejaia Mediterranean Terminal (“BMT”), which holds a 20-year concession for handling container and bulk cargo at the Port of Bejaia. In 2006, we secured a 30-year concession for the operation and management of the Valletta Gateway Terminal in Malta, These acquisitions have brought our Group’s total combined throughput in 2006 to 680,000 TEUs.
Even as we work to improve our performance as a feeder port operator, we are examining other port operations opportunities that could provide additional value to our terminal operations portfolio. We are on the look-out for further port concessions in Asia, the Mediterranean region, Africa and Latin America as we believe that these will continue to be the key drivers for future growth in the container trade.
Taking advantage of our engineering expertise in related sectors
In order to realise even greater value for its shareholders, Portek has also begun to explore the possibility of expanding its earning base into the energy sector, particularly in the area of power production. This expansion into the energy sector is a logical move considering that we will be employing our already well-developed engineering competencies and well-established market presence in Asia.
Conclusion
As an established brand name in the port industry, Portek is well positioned to capitalise on the growth opportunities as a solutions provider to the global port industry and operator of small to medium-sized container terminals; at the same time, we have been developing expertise in the energy sector. Portek will continue to offer value to its customers and shareholders by extending its geographical coverage and mix of products and services.
Larry Lam Choon Seng
Chairman and Managing Director
Portek International Limited
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Corporate Information
