Port of Tanjung Pelepas (PTP), Malaysia’s largest container port, is a world-class port strategically located at the southern tip of the Malaysian peninsula and at the confluence of the busy east-west trade lanes passing through the straights of Malacca. PTP’s strategic location makes it an ideal gateway port for the region to the larger Asean (Association of South-East Nations) and Asia-Pacific markets.

Being located within the boundaries of Iskandar Development Region (IDR), Malaysia’s new economic growth area, PTP is one of the very few ports in the world which is integrated with a free zone area ideal for logistics and manufacturing companies to set up their distribution centres for both semi-finished and finished products.

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Faster, easier, cheaper

PTP’s free zone, more commonly known as Pelepas Free Zone, or PFZ, has been designed in a unique way where both the industrial and commercial parks are located within the same compound as the port terminal. With no interventions in terms of customs processes, the movement and transfer of cargo from the factories and warehouses within the ‘distriparks’ to the terminal is much easier and faster, hence ensuring a quicker turnaround time for container operations.

“This benefits the tenants directly as the fast turnaround time enhances the efficiency of the supply chain which translates into significant cost savings for our customers,” said PTP chief executive officer, Harun Johari, in a recent interview.

“PFZ offers various value-added services such as a one-stop service centre to look into the requirements of would-be investors. Besides assisting potential investors to obtain the necessary approvals from the local authorities for their building approvals, we also assist them to obtain various incentives from the relevant government authorities. Other services offered under the one-stop service centre include solutions for their human resource requirements, worker accommodation and even transportation for workers,” he added.

Among the key factors that have made PFZ an attractive location to invest in are the incentives and benefits made available to would-be investors. Companies looking at operating within PFZ are entitled to apply for corporate tax exemption for up to 10 years from the government. In addition, all goods and products brought into the free zone area are exempted from duty, sales tax and service tax. Foreign companies within the PFZ are also exempted from Malaysia’s Foreign Investment Committee (FIC) rules, which place a restriction on 100% foreign ownership or equity in foreign companies investing in Malaysia.

Mr Harun stated that the ample land space available at PFZ provides investors with possible future scalability of their facilities. “The industrial park is big enough for strategic suppliers to co-locate on-site with manufacturers to reduce procurement costs and transportation time, providing customers with a faster time to market.”

“We are very flexible. Potential investors of the PFZ have an option to either build their own purpose-built warehouse or manufacturing facility; or lease an existing one,” he added.

Big-name business

Being Malaysia’s preferred free zone, PFZ has to date managed to attract more than RM2bn ($576m) in foreign direct investments. Last year alone, PFZ managed to sign deals with some notable big-brand names such as Intelco, Century Logistics, Cameron International and Nippon Mining.

Other big names already operating from within PFZ include BMW, Schenker Logistics, Maersk Logistics, Naigai Nitto, MiEL, Tiong Nam, JB Cocoa, Flextronics, Ciba Vision, JST, Pioneer Smith, Nippon Express, Kimberly-Clark, Geodis International, Panasonic, Hewlett-Packard and many more.

Mr Harun concluded that “business owners who are looking for a free zone environment to set up their operations will realise that Pelepas Free Zone offers the best options in terms of location, connectivity as well as space for growth and expansion”.