The Langkawi declaration in 1987, which established the island as a tax-free destination, had a profound impact on its tourism sector, leading to rapid development and transformation. What was once a humble fishing village has now evolved into a world-renowned international tourist hotspot, boasting a wide range of modern facilities and amenities. Being an island, Langkawi relies heavily on its sea transport system to connect with other destinations, serving as a vital communication link for both passengers and cargo.

Consequently, the role of the port in Langkawi cannot be overstated, as it serves as the primary gateway to the island. During the initial stages of development, Langkawi faced challenges in terms of its port infrastructure. The Teluk Ewa Jetty, originally built for the cement industry, was repurposed as a cargo port for public use. However, due to the exponential growth in cargo volume, the Teluk Ewa Jetty soon became inadequate to handle the increasing demands. To address this issue, the Langkawi Development Authority (LADA), under the guidance of the government, took action and constructed a new port at Tanjung Lembung, which was officially inaugurated on 15 November 1997.

To effectively manage the operations of the port, LADA appointed a consortium consisting of LADA, Yayasan Amanah Saham Anak Langkawi (ASAL), and DR Group Holdings Sdn. Bhd. This consortium established a company called LANGKAWI PORT SDN. BHD. (LPSB), which took on the role of port operator for Dermaga Tanjung Lembung. Incorporated on June 16, 1997, LPSB commenced its operations at Dermaga Tanjung Lembung on the same day it was commissioned, namely 15 November 1997.