Triple i Logistics sees more M&A activity in the industry

The Thai-owned group is also one of very few local logistics firms to achieve their sales targets last year. Revenue exceeded Triple i's target of Bt1.4 billion and is expected to grow by 20 per cent this year.

The group oversees six logistics-services affiliates: Triple i Interfreight, Triple i Air Express, Triple i Logistic Management, Triple i Maritime Agencies, GSA Asia Cargo and HazChem Logistics Management.

Group CEO Tipp Dalal gives his views to The Nation on how to survive in business during the toughest of times.

What is the outlook for the logistics industry this year? Will there be an increase in mergers and acquisitions?

Tipp: The logistics industry trend |this year is one of slowdown, mainly derived from the global economic downturn and political uncertainty. These |factors will lower sales volume and the value of logistics business both locally and internationally, because they affect imports and exports directly. Moreover, the United States and the European Union, Thailand's major export markets, have been badly hit by the economic crisis. The country's exports have signalled a decrease since the third quarter of last year, also resulting in a re-|duction in imports, mostly of capital |goods that are used in production for export.

Domestic logistics businesses are affected, because most of their activity is dependent on international transport. When international logistics activity declines, there is also a slowdown in the domestic market.

There will be an oversupply in both marine and air freight, leading to stiffer competition. Given these circumstances, there will be more mergers and acquisitions among logistics firms, a trend that has been seen since last year in shipping lines and airlines.

As for Triple i Logistics Group, we don't have any policy to merge with others. However, we will focus on joining hands with partners in order to increase each other's competitiveness.

However, there are still positive factors from a lowering of world oil prices and new potential markets in emerging countries and regions such as China, India |and Africa, all of which the group has targeted.

What is your strategic business plan for this year?

The group has been rebranding since September, allowing us to review our weaknesses and strengths. The group |has differentiated its services to provide |its customers with the most efficient |logistics solutions. The group will |emphasise the provision of services |with integration, innovation and inti-macy, as the logistics partner of its |customers.

What is your group of six companies' revenue projection for this year?

We divide our businesses by type: marine freight with 10-per-cent growth, air freight with 25 per cent, warehousing and distribution (20 per cent) and chemical logistics (20 per cent). Overall, we expect each business type will grow by 20 per cent on average this year.

In the meantime, we will maintain the same net profit as last year.

What is your marketing plan for this year?

We will continue what we were doing last year, especially our brand-building project. In 2009 we will focus on enhancing the potential of our six units, as well as our customer-relationship management scheme.

How will the liberalisation of services under the Asean Economic Community agreement affect the group?

It will have a positive impact, as liberalisation will stimulate international trade and investment, including traffic rights. As a result, the aviation cargo sector will have the opportunity to grow further.

Will the new 3E road link from the South of China to Thailand via Burma and the R9 route, linking Burma to Vietnam via Thailand and Laos, be positive for the group?

These routes will be good for the logistics industry both in Thailand and neighbouring countries, because there will be more choices in cross-border transportation. This will help Thai logistics firms to expand their services.

The group has provided logistics services by using the 3E in cooperation with our partners to transport goods and products between Thailand and neighbouring countries. Exports from Thailand to the South of China are mostly consumer products, while imports from China are largely fresh fruits.

The group expects to open services via the R9 soon.