JWD, a leading fully integrated in-land logistics service provider, is renewing its cold-storage warehouse expansion amid quick demand recovery, aiming to launch a 2,800sq m Suwinthawong expansion section by Sep. Expected to reach a 50% occupancy ratio at yearend, the section would improve JWD's second half-year results. Phase 2 and 3 solar rooftop installations at Mahachai and Suwinthawong plants, anticipated to be completed in Q3 and Q4, would also cut electricity bills and enhance gross margins.
Mr Charvanin Bunditkitsada, Chairman of the Executive Committee and Chief Executive Officer (CEO) of JWD InfoLogistics Public Company Limited (JWD), a leading fully integrated in-land logistics service provider, revealed that, to tap the opportunities posed by the faster-than-expected recovery in demand for cold storage space after the impacts from IUU (Illegal, Unreported and Unregulated) fishing issues have been lessened, and by its recent moves to win new customers, JWD is pursuing more growths by seeking to begin commercial operation of the expansion section of Suwinthawong plant, with a total 2,800sq m storage space (on top of the current total space of nearly 10,000sq m, which is virtually fully occupied) by Sep, which will increase its capacity.
The occupancy ratio of the said expansion, which cost THB90m, is projected to reach 50% by this yearend and 100% within two years, due to a greater focus on fulfilling orders from customers in the non-seafood segment, especially poultry businesses in Suwinthawong area, as well as other food businesses (butter, cheese, wine, etc).
Witnessing a dramatic recovery in cold storage business since early this year, we have decided to expand our Suwinthawong plant. The expansion is now in commissioning phase and should begin commercial operation by Sep, which would contribute to our better performances. We are also considering constructing Building 8 at our Mahachai plant to ensure continuous growths," said he.
The CEO noted the completed Phase 1 solar rooftop installation, and added that, to further reduce electricity bills, JWD has committed THB 31m to install solar rooftop systems at its cold storage plants in Mahachai (Phase 2) and Suwinthawong (Phase 3), which are expected to finish in Q3 and Q4, respectively. On completion of all the three phases, JWD could reduce its electricity bills for cold storage by as much as approximately THB1.2m per month.
The said investment is forecasted to improve the gross margin rate of JWD's cold storage business compared to the Q2 and Q1 figures (44.4% and 41.2%, respectively). This, plus better utilisation of cold storage space, would enable the company to post gross margins for cold storage business at the same level as those recorded for 2014 and 2015 (47.4% and 46.5%, respectively).