Kerry sees bangkok as a strategic hub

"With the Thai government's policy to support the national logistics industry, Bangkok will become a strategic logistics hub in Asia," Alex Ng, the new general manager of Kerry Logistics (Thailand), said yesterday.

The move is aimed at coping with the worldwide economic slump, which has resulted in a huge drop in global demand for the shipment of goods and products.

The company has lost a few major clients in the automobile industry but it could compensate for that with others in the consumer product business, he said.

In Thailand, Kuok Group backed-Kerry Logistics continues to expand its service offerings.

A free zone warehouse facility at Kerry Laem Cha Bang Logistics Centre with a total area of 18,000 square metres is set to formally open on April 22.

The Kouk Group, which also has majority stakes in the Shangri-la Hotel in Bangkok and the South China Morning Post, is one of the largest international conglomerates in Asia.

Ng admitted that the group has experienced declining sales in some of its five businesses - seaports, warehousing, express and distribution, air- and sea-freight forwarding, and road transporting services.

"In the first quarter, we saw a sales drop in the seaport business [operated by Kerry Siam Seaport] and flat sales in the Kerry Logistics business," he said.

The other three businesses are expected to see positive growth in sales.

He declined to give exact sales figures, but said the group expects to achieve 10-15-per-cent sales growth this year.

A reason for keeping its overall sales target is that the company can offer a wide range of integrated services as a package.

To connect Asia efficiently, Kerry's newly established business Kerry Asia Road Transport (KART) is providing transport service by trucks from Thailand to countries such as Vietnam, Laos, Cambodia, China, Malaysia and Singapore.

KART has its own fleet of 120 container trucks running in Thailand and Malaysia and 400-500 trucks provided by its joint ventures in the other countries.

Once the free zone warehouse is open, Kerry Logistics in Thailand will be able to provide customers' a one-stop service for logistics, from total solution to customised services.

Kerry Logistics' free zone warehouse will allow importers to bring foreign goods into Thailand without paying customs duties and taxes, pending their eventual processing, transhipment or re-export.

The warehouse acts as a hub and can handle whatever additional work is needed such as the processing of shipments and re-assembly before linking them up for delivery on Kerry's KART road network or by ship or air to outside countries.

"The company plans to invest more this year in upcountry development, cross-border extension and manpower," Ng said.

For this year's business strategy, the group would embark on a cost-reduction campaign, keep investing in new ideas and projects and diversify its revenue.

Robert Turner, general manager of Kerry Express (Thailand), said the company targeted growth in the triple digits for the coming year and is launching a recruitment campaign to support increasing demand for its services.

"Now, we have 14 general warehouses nationwide and expect to add 20 more by year-end," he said.

After establishing its warehouse business in Hong Kong in 1981, Kerry Logistics now operates in 22 countries worldwide. The group expanded into Asia, starting with Thailand and Korea, in 2001.

In 2007, the group recorded sales of 7.68 million Hong Kong dollars (Bt35 billion) with a total of more than 6,7000 employees.

It manages a combined 1.2 million sqm of warehouse space, more than 69,000 sqm of rail terminal area, more than 330,000 sqm of seaport area, more than 39,000 sqm of container yard area, and more than 3,500 vehicles in its transportation fleet.