Part 2: Strategic Compass and Boutique Advantage
[2025, July 30] – Lumut Port’s remarkable growth is meticulously guided by a series of Business Strategic Plans (BSPs), which CEO Dato Mubarak Ali aptly describes as “live documents” – constantly evolving roadmaps for progress. These plans are not static blueprints but dynamic frameworks that adapt to market realities and internal capabilities.
BSP 1.0: Setting the course for operational excellence (approved 2015)
The formulation of BSP 1.0 was the first major task assigned to Dato Mubarak Ali by the Board, serving as a “map” for the company’s new direction. This plan was developed entirely internally, reflecting Dato Mubarak Ali’s strong belief in the “thousands of years of experience” residing within his staff, preferring their collective wisdom over external consultants. The development process was intentionally rigorous and iterative, with the plan revised over 50 times. This involved intense discussions and even “table banging” among staff, a deliberate strategy to foster a culture of internal challenge and prevent complacency within the organization.
BSP 1.0 aimed to significantly improve the port’s operational efficiency and service standards. Prior to its implementation, Lumut Maritime Terminal (LMT) was stagnant at handling 3 million tonnes a year, with productivity as low as 180-200 tonnes per hour. This meant that a 20,000-tonne vessel could take nearly two weeks to complete operations, leading to vessels waiting for weeks and customers incurring substantial demurrage charges, sometimes as high as USD10,000 per day.
Key initiatives under BSP 1.0 included a nearly RM5 million investment in renovating the office, a strategic move aimed at boosting staff morale and fostering a sense of belonging in a more modern environment. Crucially, a dedicated Business Development division was established in 2015. This marked a significant shift from a passive “you want to use us, you come to us” approach to actively seeking customers and enhancing service. This division was notably led by an operations expert, Mr. Raja, who could speak to technicalities and build customer confidence.
The results were swift and impactful: by 2019, productivity increased from 7,000 MT to 12,400 MT per day, vessel turnaround time decreased from 60 hours to 29 hours and direct berthing percentage rose from 55% to 83%. The initial five-year plan was externally validated by Royal Haskoning consultants at the Board’s request, confirming its feasibility before full implementation in 2015 and public launch in 2016 by the Menteri Besar of Perak.
BSP 2.0 & 3.0: Expanding horizons and diversifying capabilities (2016–2026)
Recognising the limitations of existing land for future growth under BSP 1.0, Lumut Port proactively acquired additional land, including 115 acres from PKNP across the river bank, which directly led to the conceptualisation of LMT2. This strategic move was vital for the port’s long-term expansion.
BSP 2.0, covering 2016–2026, introduced the innovative concept of separating cargo types: LMT2 was designated for “clean cargo,” while LMT1 would handle “dirty cargo”. This directly addressed past operational challenges, such as contamination issues where coal dust from dirty cargo would affect limestone, sometimes even leading to cargo being sent back by unhappy customers. This separation enhanced customer satisfaction and retention. The development of LMT2, though delayed by technical issues and the COVID-19 pandemic, is nearing completion. This will free up significant space in LMT1, allowing it to accommodate new cargo types, including liquid bulk.
Further diversifying its offerings, BSP 3.0 was formulated in 2021, after the COVID-19 pandemic, and was incorporated into the existing 2016–2026 timeline. This plan involved the acquisition of another 30 acres for LMT3, which will eventually include a container terminal. This foresight addresses a critical market need, particularly in the post-COVID era where haulage costs have significantly increased. The availability of a container port is often a key consideration for industries looking to establish operations in Perak, making LMT3 a strategic move to attract more diverse businesses.
A hallmark of Lumut Port’s strategic approach is its unwavering financial discipline. Dato Mubarak Ali shares, “We never had any loans”. All investments for BSP 1.0, 2.0 and 3.0, totalling RM400 million (with RM280 million already spent by February 2025), are funded entirely from the company’s own cash flow. This includes the proactive and early settlement of past Sukuk obligations, demonstrating a robust financial position and a commitment to self-funded growth.
BSP 4.0: Charting the Next Decade of Ambition (2026 onwards)
The port is already in the process of formulating BSP 4.0 in 2025, a new 10-year plan scheduled to commence from 2026 and extend until 2036. This continuous, forward-looking strategic approach underscores Lumut Port’s commitment to sustained growth and its adaptability to future market demands. The BSPs, as a whole, are considered “live documents” that guide the port’s relentless pursuit of excellence. This highlights the deep integration of strategic planning into the organizational fabric, ensuring continuity and a clear direction for future leadership.
| BSP Version | Period | Primary Objective | Key Initiatives | Notable Outcomes |
| 1.0 | 2015–2020 | Put port on right track, improve productivity & service | Internal development, Business Development division, office renovation | Shift to 100% port revenue, increased productivity, reduced vessel waiting |
| 2.0 & 3.0 | 2016–2026 | Address land limitations, clean/dirty cargo separation, diversify offerings, container terminal | LMT2 development, land acquisition, LMT3/container terminal | Contamination issues resolved, diversified cargo, future container services, attract more industry |
| 4.0 (Upcoming) | 2026–2036 | Continued growth, focus on niche markets, further diversification | Ongoing strategic planning, LUMIC integration | Target of RM1 billion company, Perak becoming a top 3 state in Malaysia |
The “Boutique Port” advantage: Precision, specialisation and resilience
Lumut Port distinguishes itself with a unique competitive strategy: operating as a “boutique port.” This philosophy prioritises niche businesses and highly specialised, customised services over a broad, high-volume approach. Dato Mubarak Ali elaborates on this strategy, stating, “We don’t want to build a big port and then having problem filling it up, because when you start heavy on infra, that means you have a lot of liabilities”. This emphasises a practical, organic growth model that meticulously avoids excessive liabilities and focuses on delivering tailored solutions for specific client needs.
While historically reliant on mineral exports, particularly coal for Tenaga Nasional Berhad (TNB), which accounted for approximately 70% of its revenue in 2015, Lumut Port is proactively diluting this dependency. Dato Mubarak Ali foresees potential future government policy changes on raw mineral exports and is strategically expanding into diverse cargo types, including edible cargo, liquid cargo and materials for fertiliser production. This strategic shift is already evident in the current revenue split, where Lumut Maritime Terminal (LMT) now contributes 60% of the revenue, with Lekir Bulk Terminal (LBT) contributing 40%, a significant rebalancing from 2015.
This specialised focus, combined with prudent financial management, has fortified Lumut Port against global economic shocks. Dato Mubarak Ali proudly notes that even during the challenging COVID-19 pandemic, which had only a “slight impact” on the port, they were able to pay full bonuses to their staff. He attributes this remarkable resilience to their lean operations, minimal gearing (debt) and predominantly export-oriented business model, with 80% of their business being exports. This strong export focus insulates the port from import-heavy trade fluctuations and the direct impacts of global trade wars, such as those initiated by the US, which primarily affect import-dependent economies.
The port’s strategic prudence is encapsulated in Dato Mubarak Ali’s philosophy: “We don’t want to go or jump into the red ocean… what we can do is eat what we can chew”. This statement perfectly illustrates the port’s cautious yet ambitious approach, ensuring sustainable growth by focusing on manageable and profitable opportunities rather than engaging in highly competitive, commoditised markets.
Lumut Port’s strategic decision to operate as a “boutique port” focusing on niche bulk cargo and specialised, customised services, coupled with its strong export orientation and diversified B2B customer base, acts as a significant hedge against global economic volatility and geopolitical risks. Unlike larger, more diversified ports that might be heavily exposed to fluctuations in global container trade or specific import tariffs, Lumut Port’s tailored approach allows it to maintain stability and profitability even during crises. This demonstrates that strategic specialisation and financial prudence (evidenced by low gearing and self-funded growth) can be a more resilient path than broad market participation, especially for a port of its scale.
#LumutPort #MaritimeStrategy #BusinessPlans #BoutiquePort #OperationalExcellence #FutureReady #30thAnniversary
