Introduction on Mils Logistics Hub Services

INTRODUCTION The Straits of Malacca, which link the Pacific and Indian Oceans, provide the shortest sea route between three of the World’s most popular nations. India, China, and Indonesia, as countries together account for over 40 per cent of the World population. More than 50,000 vessels pass through the Straits of Malacca every year, making it one of the busiest waterways in the World. Malaysia, therefore, has the enormous geographic good fortune to sit at the crossroads of the major International trade routes from the East, and from the West, from North America to Europe, West and East Asia.

The country has become a leading global Logistics hub, and Regional and International trade is the lifeblood of the Malaysian economy. Imports and Exports are worth in excess of RM300 billion annually; putting Malaysia in the top 20 of the World’s largest trading nations. Hence, the globalization of markets is significantly increasing the demand for the movement of merchandise, goods and services in the supply chain and logistics sector. To meet the challenge, MISC Berhad (MISC) through its subsidiary MISC Integrated Logistics (MILS) envisions itself to be a partner of choice in this sector.

Part of this initiative is the formation of the MILS Logistics Hub (MLH) – a new generation, world class logistics facility offering the complete range of logistics services supported by a single integrated IT platform with a world-wide reach via the web. Total Supply Chain Solutions MILS LOGISTICS HUB (MLH) Strategically located in Pulau Indah, Selangor, the development of the MLH has been divided into three phases of which the completion of the final phase will result in the formation of a 90,000m2 state-of-the-art warehousing with Free Commercial Zone status.

The Phase 1 development is currently completed and operational. The facility is able to accommodate 14,508 pallet positions and 130,000 ft2. of floor storage area within a total built-up area of 250,000 ft2. The Phase 2 development which is a multiple temperature controlled storage facility is targeted to be operational in June 2008. MLH acts as a one stop-shop offering a full range of logistics services door-to-door worldwide, including customer delivery where required. Other available services are inventory management, haulage and distribution services, freight and customs management and a container yard.

Value Added Services include packing and re-packing, labeling and re-branding, sorting and kitting, Vendor Managed Inventory (VMI), pre & post products Inspection, laboratory service, container yard management, sterilization and fumigation. At MLH, manufacturers and importers/exporters are able to consolidate multi-country warehouses at a single duty free location. Total Layout Plan of MLH Development THE COMPREHENSIVE LOGISTICS SOLUTIONS OFFERING AT MLH Global Freight Management Sea / Air / Land Customs Brokerage Warehouse Management Dry/Ambient storage Cold storage Product Handling & Inspection

Stuffing and Un-stuffing of Containers Cargo Break-bulking, Sorting and Shipment Consolidation Value Added Services Transportation Management Haulage – Dry & Reefer containers Distribution & Order Management Domestic & Regional Delivery Reefer Cargo Distribution Cross Border Distribution Reverse Logistics Management Goods Returns across multi channel Traceability & tracking Web based Supply Chain Execution and Visibility System Online Shipment & Order Booking Bar-coded Inventory Management On time Inventory & KPI Reporting Laboratory Testing & Certification Food and Non-Food Testing Sterilization and Fumigation

Ethylene Oxide (EtO) Sterilization STRATEGIC PARTNERSHIPS MILS is supported by strategic partnerships, Seafrigo and SterilGamma. Both partners respectively have vast experience in managing technology based logistics industries such as cold chain and sterilization facilities. MILS’ joint venture with ETB-Seafrigo, one of Europe’s largest cold storage specialists, will enable MLH to offer its customers total cold chain logistics solutions. Putting together its experience in cold chain management and product knowledge, MILS-Seafrigo is confident in providing quality end-to-end logistics services from manufacturers to consumers.

The world-class multiple temperature controlled facility with storage temperature ranging from +18? C to -25? C will be operational in June 2008. The facility is equipped with mobile racking solution to accommodate 9,778 pallet positions of frozen products and 960 pallet positions of chilled products. The warehouse stores only Halal products range from deep frozen such as seafood produce, meats, poultry, vegetable based products, pastries, dairies, pharmaceutical, tobaccos, to refrigerated products, which comprises of fresh fruits, vegetables, fruit-based beverages and confectionery.

Apart from storage and warehousing handling, MILS-Seafrigo also provides value added services such as packaging (vacuum packing, bag, box, etc) re-packing, co-packing, labeling, tagging, sorting, slicing and cutting. A specially designed processing area is provided to house these activities within the required temperature. MILS-Seafrigo also extends its logistics services to quality control services which include weight and grade control, organoleptical controls on deep frozen cargo, defrosted cargo, cooked cargo, bacteriological and chemical control.

In order to facilitate the quality control services, a laboratory will be set up in MLH. All testing is in compliance with the importation requirements by the importing countries followed by the issuance of lab test certification. In view of many animal-related diseases outbreak, such as Mad Cow, Avian Flu and SARS, sterilization and food irradiation processes are widely accepted and required by the European and US consumer market. Such value added technology will further enhance the food quality and prolong the product shelf life. Sterilization and food irradiation will be a compulsory process in cold chain in the near future.

Hence, MILS has made preparation to provide the sterilization services in MLH via its business joint venture with SterilGamma (M) Sdn. Bhd. , forming MILS-SterilGamma Sdn. Bhd. MILS-SterilGamma will primarily offer sterilization and decontamination services. The joint venture will expand its range of services to service more products and to synergize with cold chain operations. As part of the first phase implementation, two Ethylene Oxide (EtO) chambers are being fabricated to cater to the sterilization and fumigation needs of the pharmaceutical, medical and wood based industries.

The EtO sterilization facility within MLH is expected to serve both local products for export and also products from other countries transshipping via Port Klang prior to reaching export countries with stringent import requirements such as Australia, United States of America and Europe. In the second phase, together with SterilGamma, MLH will house an Electron Beam Sterilisation/Decontamination facility. This facility will support the Halal Hub initiative in terms of providing a value added service by decontaminating food and other perishable products hence enhancing the food uality and prolonging the product shelf life. This is done by reducing the bacteria level to a very low and safe level via irradiation. The process is expected to improve the level of acceptance of Malaysian products in the developed export countries. Along with cold chain facility within MLH, the two activities are expected to provide a comprehensive range of services not only to the local exporters in the country but also those from within the region. MILS TAKING HALAL TO THE NEXT FRONTIER

Maximizing the advantage of the gaining prominence of the Halal Market as a global force, MILS is providing a one-stop global Halal logistics related solutions. The MLH will play a key role in providing accreditation facilities through regulatory inspection, validation facilities through laboratorial testing and documentation, Halal compliance handling and storage processes as well as decontamination and sterilization processes. These facilities will enhance Malaysia’s position as an international hub for Halal products.

To support the management and implementation of Halal logistics, MILS is putting in place the required facilities and processes in compliances with Malaysia Islamic authorities’ regulations and requirements. The facilities include the establishment of MILS Samak Depot for containers cleansing and purifying according to Islamic ritual practice in all Malaysia ports. One of the visions is to establish Samak Depots in most major international ports, namely, Singapore, India, Dubai, Saudi Arabia, Australia, New Zealand, South Africa, Europe and US.

MILS has been working together with Halal Industry Development Corporation (HDC) and KasehDia Sdn. Bhd. to establish Standard Operating Procedures of Halal supply Chain. To initiate this, MILS has formed its in-house Halal Committee for policy regulations to assist in pertaining to Halal processes, determining process owners, auditing the compliance of processes and the training of MILS personnel in Halal operational and administration matters. JAKIM and JAIS are acting as an advisory capacity in matters relating to

Halal requirements. In addition, MILS is also actively participating in the development of Selangor Halal Hub in Pulau Indah. Through accreditation from the Selangor State Investment Council (SSIC), MILS is given the opportunity to collaborate with Central Spectrum (M) Sdn. Bhd. , the developer of Selangor Halal Hub, as the Halal Logistics Support Service Provider. One of the services provided is the Halal Express, a container vessel dedicated solely to the transportation of Halal goods throughout major destinations across the globe.

The weekly sailing vessels, amounting to the turnover of approximately 1200 TEUs per week, covers Singapore, Sri Langka, United Arab Emirates, Saudi Arabia, Pakistan and India on its route around the world. SUMMARY Through the MLH, MILS aims to redefine the future of logistics in this region by providing a competitive and service effective solution in a politically stable and skilled manpower environment at the same, gaining world recognition as a Global Halal Logistics Hub.

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