Selangor: The Industrial Powerhouse (Historical Outlook)

The Historical Perspective

Previously, we wrote about Selangor being the Industrial Powerhouse of the nation last month, and to continue the series, we are going to write on the background of this economic giant from the brief historical perspective and its future direction. Apart from its location in the modern-day Malaysia, i.e. the proximity to Kuala Lumpur and Putrajaya, Selangor owes its success to simply one general word: TRADE.

Trade has been the bloodline of Selangor since time immemorial, and the pivotal point is the Port of Klang. Evidence shows that this port has been in existence since the Iron Age or 2000 years ago, much earlier than the Majapahit Empire which was around 600 years ago, and arguably when the Portuguese invaded Malacca, Klang was already a bustling port town, and the main economic drivers were tin and the jungle produce. The Klang River itself was the artery of life that facilitated the movements of goods and services and the fact that Klang was once the capital of Selangor, says a lot of this historical place.

During the colonial days, the port was named Port Swettenham, and then changed to Port of Klang in 1972 after the establishment of the Port of Klang Authority (PKA).  After a slew of privatizations and merger in the mid 1980s the Port of Klang (comprising Northport, Westport and South Point a.k.a. Southport) the trades moved up significantly until the present day. PKA remains to be the main regulatory body for trade facilitation, port planning and asset management. Data from the pre-pandemic years has shown a healthy expansion of the Port of Klang.

Total Container Throughput, Selected SE Asian Countries, source The World Bank Group:

The above charts show the example of the leaps and bounds increases in the container throughput growth in the Malaysian Ports, understandably because of the strategic location of the country. Although Singapore remains the leading port in this region, it may find it difficult to expand fast as there is limited land and road connection available. Malaysia, in particular Port Klang, has all the attributes to take on any expansion to the next level as the economies of the region and China improve. The next level would simply be a transformation into a major transshipment and world class port, riding on robotics and technology as the operational backbone, rivaling the best ports in China or anywhere in the world.

This article was written by Irhamy Ahmad, Founder and Managing Director of Irhamy Valuers International.

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