Leading ‘Total Logistics Solutions Provider’ JWD and Indonesia’s major shipping line company Samudera jointly established a JV firm to provide integrated logistics solutions in Indonesia. The firm’s first mission was to buy a 67% stake in a cold storage company based in Jakarta, which will enable JWD to recognise revenue from the profits to be shared proportionately to its investment through the firm. The firm will also build more cold storages in other cities. JWD seeks to create Asean’s ‘Food & Cold Supply Chain’. The top executive of PT. Samudera Sarana Logistik, an affiliate of PT. Samudera Indonesia Tbk, noted the need of his company to grow its presence in inland logistics business, a sector with high growth potential.
Mr. Charvanin Bunditkitsada, Chairman of the Executive Committee and Chief Executive Officer (CEO) of JWD InfoLogistic Public Company Limited (JWD), a leading ‘Total Logistics Solutions Provider’, revealed that JWD sees the opportunity to step up its investment efforts in the Asean region in order to secure regional logistics leadership, and that most recently JWD Asia Holding Private Limited, a Singapore-incorporated company which is 99.98% owned by JWD, has reached an agreement with PT. Samudera Sarana Logistik, an Indonesian member company of PT. Samudera Indonesia Tbk, a major shipping line company listed on the Indonesia Stock Exchange, to set up PT. Samudera JWD Logistics as a joint-venture (or JV) firm with an initial registered capital of USD 780,000 (approx. THB 26m) and with its shares 49% held by the former and 51% by the latter, to serve as the holding company for pursuing investments and acquiring stakes in a wide range of logistics businesses in Indonesia, especially cold storage, automotive storage and management and hazardous cargo warehousing and management.
“In the cold storage and transport segments, we have a strong base in Thailand and we have made investments in Cambodia, Laos, Myanmar and Indonesia. Most recently, we have reached a deal to invest jointly with Samudera, which marks a major milestone for the campaign to grow our presence in Indonesia. The first mission was to invest in cold storage businesses, given the currently high demand for cold storage space. We have an ambition to create Asean’s ‘Food & Cold Supply Chain’ that offers a comprehensive range of services, including cold storage, carriage, cross-border transport, freight forwarding and incidental services (e.g. procurement of materials). In the meantime, we keep looking for new opportunities to expand regionally. To realise our goal to maintain logistics bases in nine Asean countries (excluding Brunei), we aim to set our foot on Vietnam, Philippines, Singapore and Malaysia by 2020. We will focus our efforts on building a network and connecting logistic solutions regionwide, using ‘Total Solutions’ business model”, said he.
Mr. Tanate Piriyothinkul, Executive Committee and SVP Business Development of JWD, added that, after completion of the incorporation process, PT. Samudera JWD Logistics (the JV firm) has invested about USD 7.8m (approx. THB 260m) in a 67% equity stake in Adib Cold Logistics (ACL), a Jakarta-based member of Adib Group that operates cold storage and transport facilities with a cargo warehousing capacity of about 7,000 pallets and a cold storage space occupancy ratio of approximately 60%, which is forecasted to jump to 80-90% in March 2018 due to orders from new users of its storage space.
This investment deal will allow JWD starting January 2018 to recognise revenue from the profit sharing proportionate to its share of investment through the JV firm. For 2017, Adib Cold Logistics is forecasted to post a revenue figure of approximately USD 4m (approx. THB 140m) and a profitability ratio of approximately 10%. JWD also seeks to expand the fleet of transport vehicles in Jakarta and build new cold storage plants in the same city and elsewhere (e.g. Surabaya, Medan), as the existing providers of cold storage and logistics services there cannot meet the high levels of demand.
Mr. Yudi Riyadi President Director of PT SAMUDERA SARANA LOGISTIK, stated that his company is a provider of cargo transport and logistic services (including container handling) and a member of PT. Samudera Indonesia Tbk, which is a company founded in 1953 (or six decades ago) and listed on the Indonesia Stock Exchange. Using the brand ‘Samudera’, it conducts activities in five core segments, namely Samudera Terminal, Samudera Shipping, Samudera Shipyard, Samudera Logistics and Samudera Property. It employs more than 4,000 workers and maintains 17 branch offices throughout Asia, including in Dubai.
The decision to partner with JWD was taken to respond to Samudera’s need to grow its operations and provide integrated logistics services in Indonesia. Samudera looked for an equity partner and saw that JWD possessed extensive experience in the logistics industry, as well as professionalism and expertise in cold storage, hazardous cargo warehousing and management and automotive storage and logistics. Given its expertise in shipping line and logistics businesses, Samudera is convinced that the partnership is a win-win deal that will allow both parties to use their know-hows to create the JV firm’s growths through investments in promising businesses.
“Driven by a booming population and healthy growths in restaurant and convenience store chain and auto manufacturing businesses (Indonesia is an auto manufacturing base in Asean and requires professional inland logistics services), the demand for logistics services involving cold storage, hazardous cargo and automobiles in the country keeps rising. We see this as a great opportunity to partner with JWD to create mutual growths” said Mr. Riyadi.