Langkawi declaration as a tax free island in 1987 stimulate rapid development of the tourism sector. Langkawi has suffered significant physical development, from an island of a fishing village to an international tourist destination that is equipped with various facilities. As an island, sea transport is the main communication system linking Langkawi to other destinations, particularly for passengers and cargo.
Accordingly, the port plays a very important role as a gateway to Langkawi. In the early stages of development, Langkawi does not have a good port infrastructure. Teluk Ewa Jetty, built for the use of the cement industry was also used as a cargo port for public use. Following a very rapid development, Teluk Ewa Jetty could no longer accommodate the growing cargo. Thus in 1995, the government through the Langkawi Development Authority (LADA) has built a new port at Tanjung Lembung. This port was commissioned on 15 November 1997.
LADA has appointed a consortium of LADA, Yayasan Amanah Saham Anak Langkawi (ASAL) and DR Group Holdings Sdn. Bhd. to administer the port. The consortium has set up a company which LANGKAWI PORT SDN. BHD. (LPSB) as an operator for Dermaga Tanjung Lembung. LPSB was incorporated on June 16, 1997 and commenced operations in Dermaga Tanjung Lembung on 15 November 1997.