JWD established a JV firm in Thailand jointly with South Korean major operator CJ Logistics to provide logistics solutions to customers in the B2B and booming e-commerce segments, as part of its moves to grow its presence in the existing core segments and create e-commerce as a new core segment, thus widening its range of solutions for end-customers and strengthening its group’s businesses.
Mr. Shon Kwan Soo, Chief Executive Officer (CEO) of CJ Logistics Corporation, South Korea’s largest integrated transport and logistics provider, with a market share of more than 50%, revealed that his company has decided to invest jointly with JWD InfoLogistics Public Company Limited (JWD) in order to synergise the know-hows and strengths of both companies and mutually enhance their capacity to offer solutions to business-to-busines (B2B) and e-commerce customers in Thailand, where e-commerce is booming and projected to grow further in the future and will likely increase the level of demand for logistics services.
CJ Logistics is a major logistics provider in South Korea with overseas presence, including in Singapore, Indonesia, Malaysia, Philippines, Vietnam, Thailand and US. In Thailand, it provides delivery services to e-marketplace operators and e-commerce customers, predominantly in the business-to-customer (B2C) segment. It now seeks to introduce B2B and contract logistics segments in partnership with JWD, which possesses extensive experience and expertise in these two segments.
“We seek to achieve our growth target by intensifying our investment campaigns in Thailand. We aim to raise the number of delivery vehicles by more than 2,000 by 2020 and are working to build a new distribution centre (more than 30,000sq.m.) in Bang Na area by 2019 to improve the order fulfillment capacity to more than 400,000 pieces per day through employment of an automatic sorting system. CJ Logistics will become a global leader in logistics by 2020”, said he.
Posting approximately USD 6.1 billion in global sales in 2017, CJ Logistics provides a rich variety of logistics solutions in the areas of international cargo transport, domestic transport, distribution centres, depots, domestic and international express parcel and cargo delivery, etc. Beginning in 2003, CJ Logistics has grown rapidly across the globe in its pursuit of becoming a top-five logistics provider in the world market. Especially, it has executed merger and acquisition transactions to fast-track its expansion in major regions, including China, South-East Asia, India, Middle East and US.
Mr. Charvanin Bunditkitsada, Chairman of the Executive Committee and CEO of JWD, a leading Asean-based specialised logistics solutions provider, noted that the joint investment with CJ Logistics will be made through the formation of CJL JWD Logistics Limited as a newly established company in Thailand, with an initial registered capital of THB 2 million, and with equity shares held by CJ Logistics Thailand at 51% and JWD at 49%. Both parties will use their existing resources, e.g. JWD’s warehouses and vehicles and CJ Logistics’s nationwide truck network and advanced transport management and servicing technologies, to expand their businesses more efficiently.
JWD expects the investment to pave the way for an expansion of its B2C business to cover e-commerce, which has been growing dramatically in recent years. The combined market value of e-commerce in Thailand is forecasted to surpass THB 3 trillion this year (compared with the THB 2.8 trillion level reached last year), in line with the rising online purchase volumes. This will benefit the providers of logistics solutions to e-commerce operators.
“CJ Logistics is currently one of the four major logistics providers in the B2C segment in Thailand. JWD possesses almost four decades’ experience in logistics and the capacity to offer integrated logistics solutions in the B2B segment. We believe that the co-investment will allow them to enhance their collective strengths and the potential to achieve their goals. Due to the entry of new players, competition for logistics businesses from the e-commerce operators is growing more intense. Notwithstanding, we believe that players with comprehensive geographical coverage as well as the capacity to perform delivery speedily and efficiently, order management technologies and consumer preference data will have advantages”, said JWD’s CEO.