JWD, Thailand's leading provider of fully integrated land-based logistics services, has made another move to implement its plan to expand its business in the Asean region, partnering with JB Trading, a major distributor of consumer products in Laos, in developing a new general warehouse in Vientiane with 3,200sq.m. in aggregate space, the construction of which is expected to be completed in Q1/2017, to tap the growing warehouse demands in a booming economy. It is conducting feasibility studies on its planned phase 2 warehouse expansion, which would help enable it to secure leadership in Asean's logistics market in the future.
Mr Charvanin Bunditkitsada, Chairman of the Executive Committee and Chief Executive Officer of JWD Infologistics Public Company Limited, or JWD, Thailand's leading provider of fully integrated land-based logistics services, revealed that, following last year's decision to build general, frozen and cold storage warehouses with an aggregate rental space of 750sq.m. in Vientiane, the company has recently moved to expand its logistics and warehouse business in Laos, partnering with JB Trading, a major distributor of consumer products in Laos, in establishing a joint-venture firm, in which it holds a 60% stake, to build a new general warehouse in Vientiane to cater to local customers' demands for spaces in warehouse with acceptable operational standards.
With total investment of THB 75 million, the warehouse is designed to be a one-level building with about 3,200sq.m. space available for rental. Its construction will commence in mid-2016 and is expected to be completed by the first quarter of 2017. It will become the largest general warehouse in Vientiane and one of the warehouses there that meet high operational standards, which will enhance JWD's competitiveness in warehousing business in the country.
"The introduction of the Asean Economic Community, or AEC, has led to several major international firms' decisions to enter the Lao market and the local firms' decisions to expand their businesses to take advantage of new opportunities. Those decisions, in turn, have increased the demands for general warehouses to facilitate business operations," he said.
He noted that JWD will recognise revenue from the new general warehouse in Vientiane immediately on its opening, as JB Trading, its partner in the project, has expressed its interest in renting about 1,200sq.m., or more than 30%, of the warehouse space in the initial phase. This, he said, will contribute significantly to stability of revenue streams after the opening of the warehouse. The remaining space will be rented by general customers, and JWD expects to record an 85% occupancy ratio for the warehouse in two years after its launch, added he.
JWD is interested in making continuous expansions its warehouse business in Laos, as it is conducting feasibility studies on its plan to build a phase 2 expansion of the warehouse to grasp the opportunities offered by the booming local economy and flourishing restaurant business. Dining out is becoming more popular in Laos, and, consequently, local restaurants are requiring more spaces in warehouses with acceptable operational standards. Such situation poses a great opportunity for JWD's expansion in the country as part of the company's efforts to realise the ambition to secure leadership in the Asean logistics industry.