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SPEECH BY Y.B. DATO’ SERI CHAN KONG CHOY

MINISTER OF TRANSPORT

AT THE SIGNING CEREMONY OF THE RM 1.455 BILLION

PRIVATE DEBT SECURITIES ISSUE FOR

TRANSHIPMENT MEGAHUB BERHAD

ON TUESDAY 12 TH OCTOBER, 2004,

MANDARIN ORIENTAL HOTEL, KUALA LUMPUR

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Y. A. B. Dato’ Sri Mohd Najib bin Tun Haji Abdul Razak Deputy Prime Minister of Malaysia

Y.Bhg Dato’ Abdul Azim Bin Mohd Zabidi; Chairman, Kuala Dimensi Sdn Bhd

Y.Bhg Dato’ Nik Mohamed Din bin Nik Yusoff Executive Chairman, OSK Holdings Bhd

Board of Directors of Transshipment Megahub Berhad

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Board of Directors of Kuala Dimensi Sdn Bhd

Distinguished Guests,

Members of the Press,

Ladies & Gentlemen.

Good Evening,

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I take this opportunity to congratulate Kuala Dimensi Sdn Bhd

through

its

subsidiary

Transshipment

Megahub

Berhad,

on

its

success in obtaining the approval of the Authorities on the issuance

of RM1.455 Billion Private Debt Securities Issue which comprises

RM1.095 Billion Fixed-Rate Serial Bonds (“BONDS”) and RM360.0

Million

Commercial

Papers/Medium

Term

Notes

(“CP/MTN”)

would

also

like

to

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congratulate

OSK

Securities

Berhad

as

the

Principal Advisor and Lead Arranger for this major fund raising

exercise.

I understand that Malaysian Rating Corporation Berhad has assigned

a rating of “AAA” to the Bonds and “MARC-1/AAA” to the CP/MTN”.

This rating indicates the ability to repay principal and pay interest on

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a timely basis and also shows the confidence by the rating agency on

the

overall

project

as

well

as

complete the project.

Kuala

Dimensi’s

competency

to

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Ladies and Gentlemen,

The Ministry of Transport and through its implementing agency, Port

Klang Authority, has put top priority on the Port Klang Free Zone

Project to ensure the success of this project.

The establishment of

the Port Klang Free Zone or PKFZ is aimed at making Port Klang a

regional Distribution Hub as well as a commercial, industrial and

logistics centre.

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At the same time, PKFZ would serve to attract and

promote both domestic and international manufacturing activities for

the export market.

The development of The Port Klang Free Zone by Transshipment

Megahub Berhad through its parent company, Kuala Dimensi Sdn

Bhd, shows that the private sector is increasingly contributing to the

growth

of

our

country

by

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directly

undertaking

government

development projects. The advisory, arrangement and subscription of

such a large bond issuance by a single Universal Broker also

highlights that the government’s Capital Market Masterplan has

succeeded in creating strong financial institutions. I applaud OSK for

being able to undertake such a transaction and I hope this bond deal

will be very successful. In fact, the demand of this bond issuance by

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the institutional investment community will show that the Malaysian

capital market has indeed grown deeper and broader with our

government’s Capital Market Masterplan. The deal’s success will also

show us that the investment community is supportive of government

development plans even when they are undertaken through the

private sector.

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Ladies and Gentlemen,

Since being designated as a National Load Centre in 1993, Port

Klang has seen tremendous growth in its container throughput, rising

by an average of 20% annually to handle 4.8 million twenty-foot

equivalent units (TEUs) in 2003. It is now the 12 th largest container

port in the world. Consistent effort by the Government in expanding

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port capacity through the construction of new berth facilities has been

among the reasons for this spectacular growth.

The

Port

Klang

Authority

(PKA)

has

done

excellent

work

in

coordinating and regulating the diverse port operations within Port

Klang and in their overseeing of both terminal operators, namely

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North Port and West Port. The 1000-acres Port Klang Free Zone will

further increase Port Klang’s attractiveness as a transshipment hub.

The

growth

in

transshipment

cargo

at

Port

Klang

has

been

spectacular at an average of 120% annually since 1993. Of late,

much

of

this

transshipment

cargo

has

come

from

neighboring

countries such as Indonesia and Myanmar. Transshipment cargo now

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accounts for more than 50% of Port Klang’s throughput and this

percentage is expected to increase further.

The Port Klang Free Zone will further boost our transshipment cargo

by

providing

additional

facilities

for

industries

to

process

raw

materials brought in via Port Klang for subsequent re-export. By

locating manufacturing facilities and logistics firms side by side within

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the Free Zone, Port Klang will be turned into an integrated trade,

manufacturing and logistics hub.

With global container shipping expected to grow by 12% this year and

between 9% to 10% in 2005, we feel that the global containerization

trend will result in sustained container traffic growth worldwide and

particularly in Asia. As such, the existence of logistics providers and

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excellent infrastructure facilities at Port Klang will allow it to capture a

larger market share of global trade and to serve as a regional

distribution centre. Transshipment of cargo is the way forward for

global ports as growth in this area is not limited by the growth in the

ports’ hinterland as is the case with indigenous cargo. Thus although

indigenous cargo will remain key to Port Klang, the PKA’s strategy to

boost transshipment cargo is a step in the right direction.

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When the Free Zone is completed by 2006, we expect global

container trade to be even more focused on Asia. Already, 6 of the

world’s

largest

container

ports

are

located

in

Asia

and

the

containerization of cargo in India and China will only lead to the

greater use of containers in global trade. This will help boost the

throughput of container ports such as Port Klang. With Port Klang

strategically located on the Straits of Malacca, a key trade artery, it is

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well poised to directly benefit from Asia’s pre-eminence in container

trade.

The implementation of PKFZ is carried out by the Jebel Ali Free Zone

Dubai which is a joint venture project between Jebel Ali Free Zone

International (JAFZI) and Port Klang Authority, whereby JAFZI will

play the main role as Manager, Administrator and Marketer of PKFZ.

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The Joint Venture with JAFZI is the best option based on their

experience and expertise in managing the most successful free zone

in the world, The Jebel Ali Free Zone Dubai.

The Government is

confident that the development of PKFZ spearheaded by JAFZI will

be a success and the government will continue to provide the

strongest support to ensure its consequent development and further

contribution to the national economy.

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Ladies and Gentlemen,

As you are aware, the Port Klang Free Zone Project was successfully

launched on 2 nd July 2004 by the Hon. Deputy Prime Minister of

Malaysia on behalf of the Hon. Prime Minister of Malaysia. Following

this, I understand that there has been heightened interest from

various companies both local and international who are attracted to

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this project and are looking forward to the opportunity to locate and

operate their businesses in PKFZ.

I wish to congratulate Transshipment Megahub Berhad, a subsidiary

of Kuala

Dimensi

Sdn

Bhd

for

all their

efforts to

take on new

challenges in developing Port Klang Free Zone and in strengthening

Malaysia’s place in the international arena as a major logistical hub in

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Asia. I also applaud OSK Securities Berhad for being the lead

arranger, principal advisor and sole subscriber of this very significant

bond issuance. They have proven that Universal Brokers too are

capable of producing such a major bond issue in the market place. I

wish Kuala Dimensi, TMB and OSK every success in this transaction.

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On this note, I would also like to take this opportunity to extend my

appreciation to the Selangor State Government under the leadership

of YAB Dato’ Seri Mohamad Khir bin Toyo, Chief Minister of Selangor

and all the State Government Agencies who have assisted in one

way or another to ensure the successful fruition of this national

project. Thank you / Sekian Terima Kasih.