Transoceanic Cooperation: Beibu Gulf Port Group Promotes the Development of Brunei Port

Written By Huang Yunyun / Translated By Chen Zhiying

Muara Port, 29 kilometers away from Bandar Seri Begawan, the capital of Brunei, is an important port for Brunei to participate in international trade. Before 2017, the staff of the  port still relied on the original practice of manual registration before entering data into computers to carry out the work of wharf operation and statistics. After the port has fully realized information management, the port operating system has replaced the past working mode, and the operation efficiency and accuracy of the whole terminal have been greatly improved. 

Such transformation comes from the in-depth cooperation between Muara Port and Guangxi Beibu Gulf International Port Group (hereinafter referred to as Beibu Gulf Port Group). The transformation of Muara Port accurately reflects the potential and ability of China and Brunei to carry out port development and cooperation. 

Guangxi-Brunei port cooperation

In 2014, the Memorandum of Cooperation on Brunei-Guangxi Economic Corridor Economic and Trade Cooperation was officially signed. After years of construction, the economic corridor has become the most influential carrier and platform for China-Brunei cooperation and the flagship cooperation project between the two countries.  Guangxi-Brunei cooperation is moving towards maritime economy represented by ports.

Surrounded by 1595km coastline, Guangxi has three good deep-water ports, namely Qinzhou port, Beihai port and Fangcheng port, serving as the nearest sea passage from Southwest China to ASEAN. Before Beibu Gulf Port Group reached cooperation with Brunei, the Group had already integrated Guangxi seaport resources and explored a development path with efficient operation of port administration system, smooth promotion of infrastructure construction system and wider pattern of port development and opening-up. 

Brunei has the regional advantage of locating in the core area of ASEAN East Growth Area (hereinafter referred to as the East Growth Area). Muara Port is the only deep-water port in the country. In addition to oil and gas resources, 90% of import and export goods pass through Muara Port. Therefore, the Brunei government hopes to build Muara Port into a shipping center and transportation hub in the East Growth Area and make it a new economic growth point. However, for a long time, due to the relatively underdeveloped operation and management technology and high logistics cost of Muara Port, the location advantages of the port have not been fully reflected, and the pace of development is relatively slow. This provides a space for Brunei and Guangxi to develop and cooperate in ports. 

On February 21, 2017, Brunei Muara Port Co., Ltd. (hereinafter referred to as Muara Port Corporation), a joint venture between Beibu Gulf Holding (Hong Kong) Company under Beibu Gulf Port Group and Brunei Darussalam Asset Management Company, was listed in Bandar Seri Begawan, capital of Brunei. According to the agreement of both parties, Muara Port Corporation officially took over the operation of Brunei Muara Port container terminal, marking the smooth implementation of the flagship project of “Brunei-Guangxi Economic Corridor”. 

Since then, Brunei Muara Port has embarked on the fast track of development. 

Improving the regional competitiveness of Muara Port to reflect the speed of Beibu Gulf Port Group

“The Chinese management team has given the port a new look,” said a Brunei manager of the container operation department of Muara Port Corporation. In the year of formal takeover, Muara Port changed the situation of long-term loss and relying on government subsidies, turned losses into profits and continued to make profits, fully reflecting the “speed of Beibu Gulf Port Group”. 

How did this change come about? In general, Muara Port Corporation has used the advanced technology and management experience of Beibu Gulf Port Group in wharf construction and operation to optimize and upgrade the operation mode, business process, on-site management, mechanical equipment and information system, and improve the port infrastructure, operation efficiency and service level of wharves. Thus, logistics costs have been reduced, cargo handling capacity of the container terminal of Muara Port has been greatly improved, and the Port’s regional competitiveness has been risen to a new level. 

For example, in terms of hardware facilities, in August 2017 when Muara Port Corporation took over the container terminal of the port just five months later, the newly added mobile equipment such as 4 front cranes and 3 stackers were officially put into use, which injected fresh blood into the port that has not purchased new equipment in recent 20 years. Then, after more than a year’s efforts, the average operation efficiency of a single ship in the port has reached 30.2 natural containers  per hour, which is more than 50% higher than that before taking over. The average time for the external trailer to pick up and return the container is 25 minutes, which is shortened by more than 30 minutes. 

For another example, in terms of operation and management, in order to change the situation of manual registration and entering data into the computer in Muara Port, Beibu Gulf Port Group has customized a port operation system for Muara Port and sent technical experts from China to provide core business training and guidance to the employees. In December 2017, Brunei Muara Port container terminal realized comprehensive information management, and the operation efficiency and accuracy of the whole terminal were further improved. 

Because of that, Muara Port still makes great achievements despite the COVID-19. In the first half of 2021, the cargo throughput of Muara Port was 694 thousand and 900 tons, up 8.75% over the same period. The operating income was RMB 66.5528 million yuan, a year-on-year increase of 29.52%; The total profit was RMB 30.8596 million yuan, a year-on-year increase of 91.65%. 

With joint efforts of the two countries, Muara Port is getting closer and closer to the goal of building a regional hub port which is “more intelligent, more modern, more green, and more international”. On July 5, 2021, Muara Port Corporation held a commencement ceremony for the expansion of the new container terminal. The project plans to build a 50,000-ton container berth while upgrading the original container and bulk cargo terminal. It is expected to be completed and put into use by the end of 2023. By then, the annual container handling capacity of Muara Port will be increased to 500,000 TEUs. A broader development path lies in the near future. 

Comply with Brunei’s economic development trend and diversify the operation of Muara Port 

Shipping business of Muara Port is naturally an important part for the cooperation between Beibu Gulf Port Group and Brunei. However, in addition, the “Brunei 2035 Vision” put forward by the Brunei government to overcome the difficulties brought by single economic structure and realize diversified economic development provides more possibilities for Beibu Gulf Port Group to expand related industries based on ports. 

On September 15, 2017, Beibu Gulf Port Group and relevant departments of Brunei government signed a capital injection agreement for Brunei Muara Port, a memorandum of understanding for the development and construction of Brunei logistics park and a letter of intent for the development of Brunei Industrial Park. This means that China and Brunei have taken another solid step on the path of developing diversified logistics services and exploring coordinated development model featuring “Port-Industry-Park” which is in line with the common interests of both sides. 

What are the advantages of the model featuring “Port-Industry-Park”? That is, the improvement of various service capabilities of the port will help to meet the freight demand of the industry and drive the development of the park; After industry in the park forms a certain scale, it can also feed the development of the port. It is said that the park is developed under the main direction of “halal manufacturing”, “electronic information”, “modern logistics” and “real estate”. It also develops supporting industries such as R & D and design, financial services, business services and business offices, so as to form four functional areas, namely manufacturing R & D area, international logistics area, modern business area and ecological residential area, and build itself into a benchmark park for industrial development in Brunei in the new era. 

In December 2020, the development of the park made landmark progress. Brunei Muara fishing port project was successfully signed, and Muara Port Corporation would have the right to develop and operate the project for 40 years. Muara fishing port is the only public fishing wharf in Brunei. After the signing of the project, Muara Port Corporation began to improve the berthing conditions of the existing wharf and improve the supporting infrastructure such as ice making, cold storage, oil supply and water supply. With the goal of training local professionals, Muara Port Corporation also expanded a sustainable and export-oriented development path, drove the growth of Brunei fishery and enhanced the position of Brunei fishery products in global supply chains. 

In April 2021, under the COVID-19, Muara Port Corporation actively took advantage of the ports and took over Brunei’s grain reserve business. In transportation, it actively docked with the customs to realize container landing and loading at the same time. In unpacking and warehouse management, the Corporation put machinery and and labors into use respectively, and introduced advanced grain management technology from China to further improve the storage quality. 

It is said that in the future, based on the operation of Brunei national rice reserve business, Muara Port Corporation will further expand downstream supporting services, effectively revitalize the idle assets such as land and warehouse in the port area, and further expand the radiation scope and influence of Muara Port in Brunei inland logistics by relying on the whole process service advantages such as inland logistics featuring factory to port and wharf loading, laying the foundation for the linkage development of “Port-Industry-Park”. 

The development process of Muara Port and the good cooperation between enterprises of both sides are not only a vivid portrayal of the two countries giving full play to their respective advantages to achieve win-win development, but also a successful model of docking development strategies and sharing cooperation opportunities since the establishment of diplomatic relations between the two countries three decades ago.