Tag: JWD InfoLogistics PCL

SCGL and JWD announce merger to combine strength to leverage regional business expansion

SCG Logistics Management Company Limited (“SCGL”) and JWD InfoLogistics PCL (SET: JWD), the two leading logistics and supply chain service providers at the ASEAN level together announced a crucial merger deal to form a partnership under SCG JWD Logistics PCL (SCGJWD) in a move to combine strength and increase the service level capability to become the largest Integrated Logistics and Supply Chains Solutions Provider in the ASEAN region with a wide variety of integrated services to cover all industrial groups to increase the opportunities for exponential growth derived from the customer bases of the two companies, while drawing up a strategy to expand the businesses in the ASEAN region.

Mr. Charvanin Bundikitsada, Chairman of the Executive Committee and Chief Executive Officer of JWD Pcl. (JWD), revealed that the Company has moved ahead to merge the Company with SCG Logistics Management Company Limited (SCGL), which is a subsidiary of Siam Cement PCL (SCC), following the Company’s Board of Directors’ Meeting on October 26, 2022 resolving to propose to the shareholders’ meeting to consider and approve the merger between JWD and SCGL.

In this merger transaction, JWD will issue new ordinary shares to the amount of not more than 791,020,363 million shares and offer them as private placements (PP) to the existing shareholders of SCGL at the price of 24.02 baht per share as compensation for the transfer of all SCGL ordinary shares in a share swap. Following the completion of the share swap, SCGL’s existing shareholders will hold shares in JWD in the proportion of not more than 43.7 percent of all JWD’s voting shares after the transaction.

In this regard, JWD will convene the Extraordinary General Meeting of Shareholders No. 1/2022 on December 8, 2022 at 1:30 p.m. at Banthat Thong Meeting Room, 6th Floor, JWD Store it!, after setting the record date to finalize the list of bona fide shareholders on November 10, 2022, to consider and approve the merger plan and the capital reduction and the increase of the Company’s registered capital to 905,510,153.00 baht from the original 509,999,971.50 baht through the issuance of new ordinary shares as previously stated. The merger transaction of SCGL and JWD is expected to be completed within Q1/2023.

Upon completion of the merger transaction, JWD will change its name to SCG JWD Logistics PCL with the SET-registered abbreviation of SJWD for share trading in the Stock Exchange of Thailand, The new Company will be managed jointly by Co-Chief Executive Officers (Co-CEOs) – Mr. Bunn Kasemsup, representing SCGL, and Mr. Charvanin Bunditkitsada, representing JWD. SCGJWD will proceed with the internal restructuring after the merger, when SCGJWD will accept the entire business transfers (EBT) of SCGL. This process is expected to be completed by the fourth quarter of 2023.

This merger combines the individual strengths of the two companies perfectly. These include JWD’s expertise in specialized products such as temperature-controlled goods, hazardous goods and automotive, etc., while SCG is the expert in industrial products such as steel & construction materials, paper & packaging, and consumer products, etc. This synergy will help to increase the capability to provide logistics services from upstream to downstream along with a large variety of service models covering warehousing, supply chain and multimodal logistics, as well as the opportunity to create more synergy in the future. Moreover, the customer bases of both parties do not overlap significantly, thus growth from expanded customer base of both parties and the acquisition of a large customer base from within the SCG group will help to maintain growth and effectively reduce business volatility.

In terms of cost and management, the merger will immediately make SCGJWD the largest integrated logistics and supply chain service provider in ASEAN. This will result in the expansion of the businesses, the integration of key support departments, as well as the promotion of the application of shared resources for maximum benefit.

The business opportunities that the two parties have planned together can be summed up in three parts: (1) Increased revenue from cross-sale and up-sale from the existing customer bases of SCGL and JWD along with more cost savings; (2) The creation of added value to the existing services that both parties are experts in, such as cold storage, automotive warehousing, hazardous goods storage and multimodal transport, etc.; (3) Seamless connection of all service bases in the ASEAN region through the application of successful business models in Thailand to foster growth abroad; (4) Provide D2C (Direct to Consumer) services to meet the changing customer needs through private storage for rent, logistics for eCommerce businesses, and express logistics; and, (5) Continuously improve the scope of services in new businesses such as industrial real estate and software development services for logistics management.

“This merger deal is a large and important undertaking that we have carefully considered to be in the best interest of shareholders. This move will enable us to grow robustly and sustainably in the challenging and volatile market conditions. Both JWD and SCGL are two perfectly fitted jigsaw puzzle pieces, with each having a different customer base that can strengthen the other. With the strong potential of SCGJWD, we will be able to create boundless and sustainable growth, and will be able to deliver the solutions that are truly a One Stop Service.”

Mr. Bunn Kasemsup, Managing Director of SCG Logistics Management Co., Ltd., said the merger with JWD is considered to be the combination of expertise of the two leading companies in logistics businesses to further increase the service capability and ramp up the growth of the businesses. SCGL has the expertise in providing logistics and supply chain services for the industrial groups and various consumer goods that have been garnered by providing logistics services for companies in the SCG Group and general customers, as well as the continuous investment in the development of innovation and technology. These include the control tower logistics and supply chain management control, telematics system to track the data on the delivery routes and to forward warnings to drivers, the automated storage and retrieval system (ASRS), and others. At the same time, SCGL also runs Taksapipat School that is tasked with safe driving training for truck drivers and forklift operators.

Moreover, SCGL has businesses in many countries as a result of the business expansion to support the business development of the SCG Group, namely in Vietnam, Indonesia, Cambodia, Lao PDR and the Philippines. The company is capable of providing cross-border logistics services from Thailand through Lao PDR and Vietnam to China, and barge transport to neighboring countries such as Cambodia and Myanmar. Also in the portfolio is the international sea-borne shipping service that can merge with that of JWD’s to expand the scope of services to other countries in the ASEAN region.

SCGL has a plan to broaden the rail and air logistics services. Thus, upon the merger with JWD, we will be able to expand the network of multimodal transport services that will become much more comprehensive, to help optimize cost management and create added value for the business. This is important because the transportation of goods by ships and rail carries a lower cost than by road. The larger customer base will increase the opportunity in the hauling of both inbound and outbound cargo. In addition, more importance will be placed on sustainability, such as being “Green Logistics”, with the focus being on better care for the environment and society through the reduction of energy consumption including the use of electric transport vehicles (EV) and utilizing energy from solar roofs atop the warehouses, etc.

On the cooperation in the expansion of businesses abroad, we consider Vietnam, Indonesia and the Philippines as countries with high potential due to their above-average economic growth over and above the regional median. Therefore, there exists a need for warehouses and logistics service providers to support the expansion of the industries, while increasing the investment on the construction of more warehouses in these countries to foster regional growth.

“Upon this merger, we will become the leader in logistics and supply chain services, with the strength in providing the most comprehensive Integrated Logistics and Supply Chain Solutions in the ASEAN region, along with innovations and modern technology to carry out business operations. Also important is that we possess a strong brand recognition in both SCGL for its professionalism, and JWD for its experience in specialized logistics services. All these factors will enable us to become the business leader in the region,” Mr. Bunn concluded.

Released for JWD InfoLogistics PLC by MT Multimedia Co Ltd
Yuttachai Praikanahok (Tle), T: +66 (0)91 736 2866 or +66 (0)2 612 2081 ext. 125, E: Yuttachai.p@mtmultimedia.com

The Executive Talk: JWD InfoLogistics PCL (SET: JWD)

JWD InfoLogistics PCL (SET: JWD) Chief Executive Officer, Mr. Charvanin Bunditkitsada discusses the company’s strategy and outlook in The Executive Talk by ShareInvestor.com.

1. What have you learned, and what opportunities have you found from the Covid-19 crisis?

Since the Covid-19 first appeared last February (2020), everyone has been in a panic. The logistics industry in Thailand and globally was almost frozen, especially in Q2. To cope with it, JWD, for the very first time, launched the Business Continuity Plan (BCP) to keep our operation going on track. We could not stop, because it would affect our customers. Since then, we have been executing BCP 4 times already. The most important lesson we have learned is that a business must adjust itself in order to survive. For example, we set up online meetings and interviews. But yes, there are always opportunities within every crisis. And chance belonged to those who adjusted themselves quickly. Covid-19 has uncovered rapid growth in B2C, Last-mile delivery, Online, and E-commerce business. They emerged even before Covid-19 hit the world. But because of the pandemic, the potential of this sector has never been better. Online trading has shown its high potential, just like traditional channels. JWD could see this trend clearly and started adjusting business even before the pandemic. For example, we signed a JV partner with our potential partners from many companies. We faced difficulties from travel restrictions within the region. However, JWD and our partners could find the solutions to get through them.

2. How do you adjust your business in response to the increasing oil price?

Years ago, when we were facing the swinging oil price, we kept the customers informed about this factor and the necessity that we might need to increase our service fee regarding the oil price. For the recent crisis, we admit that it significantly impacts our income and revenue. However, we have EV technology that JWD has already signed a contract with our Japanese supply partner. Thus, this February, we will launch the first trial of EV lorry in our freight. Moreover, we have cooperated with the Chinese partner to bring more EV trucks. Therefore, to achieve our ‘Green logistics’ mission and maintain the ESG policy, we must implement more EV transports.

3. Confronting the container imbalance.

This issue directly impacted our customers. I received an email from customers in Los Angeles explaining their difficulties in acquiring the containers from Thai suppliers, which led to their lack of confidence in trading with Thai companies. I clarified the situation and pointed out the problem’s actual cause, which was the consequence of imbalanced freight between large nations. Therefore, when it lacked supply, the freight price increased. But I don’t believe that the sea freight companies would take advantage of raising the freight price. So, it’s about balancing the freight account. Although these issues didn’t impact us directly, we took the opportunity to support our customers by providing temporary storage while the cargo was on the waiting list.

4. Business adjustment in the era of digital disruption.

Talking about digital means the backend or freight management system and the robotic technology that replaces human labor. JWD was the first logistics company to implement such technology and has been operating under an IT solution initiative for over ten years. Besides, we have also applied Business Intelligence (BI), such as providing a dashboard for the management team to oversee the operation in each unit. I also have my dashboard to receive daily income and revenue reports.

5. Generation gap management

JWD will soon turn 43 years old. We have a wide gap between the old generation who are almost retired and young new-graduated employees. With more than 2,000 employees, we brainstorm experience and know-how from the seniors with the enthusiastic, progressive juniors. I admit we have a strong HR department. Plus, we are the rising sun industry. While everyone has struggled with the pandemic, we still have acquired positive effects. Thousands of employees from other sectors were assigned to work from home, leave without pay, and even dismissed. We did none of these. Therefore, I believe our staff knows how lucky they are with the company’s position these days.

6. Investment in Cambodia and ASEAN

JWD has been expanding business to Cambodia for over five years. We operate three significant parts – first, food cold chain and supply chain management. We cooperate with the Cambodian partner who holds the Pizza Company and Swensens franchise. Second, we invest in the Phnom Penh special economic zone with an estimated 14.6 percent share. Lastly, the inland container port, located in Phnom Penh Special Economic Zone. They have grown quite well and just picked up from the Covid-19 impact. Especially these days, customers prefer inland transportation to the sea-freight due to the cost.

7. Logistics business is the backbone of the economy.

Yes, this is very important. As I said, no matter what crisis, all businesses seek survival. Logistics plays a significant role in supporting their backend, transportation management, storage management, air-freight, sea-freight, etc. Logistics cannot stop working. But of course, in a bull economy, we have a lot to do. The higher volume brings about a higher supply. Therefore, the increased competition is the customers’ stage of judging and bargaining the price and service. Logistics is an exciting business. Most of the time, we must decrease our costs because we profit from the customer cost.

8. Art Storage business.

Forty-three years ago, JWD started our first business in moving and relocation services such as home and office move, including exhibitions related to Art. A couple of years before the Covid-19 pandemic, we started the JWD Art Space, aiming to provide Fine Art logistics solutions, and cooperated with the Ministry of Culture. We see the pain point within relocation, import, and export of Fine Art. Some artworks have a high value. The collectors usually obtain numbers of artwork. Commonly, they hang them on the wall. However, when the amount of work has risen. Keeping these sensitive paintings in a common storage room will damage them long-term. I am personally a collector. So, I have found our potential in Fine Art management. We have an art specialist team who experienced more than 20-30 years in this industry. Customers relied on us. Besides, we also set up art exhibitions at JWD Art Space. One of our events received over 30,000 visitors, which means at least 1,000 per day. We have been delighted with the project. We aim to improve the art industry and introduce more Thai artists to collectors. We want to build a connection between them. Consequently, we never charged any entrance fees. Many students came here, and we see this as an opportunity to bring Thai artists and artworks to the global market.

9. What is your most potential challenge these days?

After Covid-19, I admit that JWD has performed exceptionally well. We have grown three quarters in a row. Therefore, my most potential challenge is how to develop further. How can we maintain our performance until the end of this Q4? While the Omicron seems threatening the economy and brings us an unclear scenario, how can we reach our next year’s target, especially the top and bottom lines? Can we grow as expected? These are our challenges.

10. We must not be proud of our past achievements.

I believe that as a listed company when we achieve something, others keep an eye on us. Because we are in the market and must work transparently, other competitors can always follow or imitate us – for example, cold chain management. Nowadays, everyone jumps into this service which I am very appreciative of. Thus, we aim to create new products regarding new trends, long-term potential, and sustainability. After that, the commercial team and I must pursue new products and services that could solve the problems for our customers, either B2B or C2C. We must admit that when there are many players in the market, profit margin and everything we did in the past will naturally decrease. Most commonly, they usually compete with price war campaigns. But, as a result, we must not stop and constantly search for new business opportunities.

11. What’s your inspiration for work?

My inspiration. I was only 29 years old when I first took the responsibility in this position due to my father passing away. However, my father’s goal to register the company in the capital market had inspired me. And I made it. Indeed, there are many things he wanted to do, and I have achieved most of them so far – just a few things to go.

12. What’s your goal?

My next goal is to grow JWD following our 5-year strategy as we announced to the investors and shareholders that we will reach 10,000 million THB by 2025. We are becoming a powerful regional logistics supply chain company, especially in Vietnam, where we hold shares in Transimex Corporation PCL. Moreover, we have received a 5-star CG score for two years in a row. We are one of the listed companies qualified in the THSI (Thailand Sustainability Investment) list. We were awarded the ‘Rising Star’ and ‘Best IR Awards’ from SET. We have been trying to transfer a family business into a logistics leader that everyone follows.

About The Executive Q&A Series

The Executive Q&A Series is presented by ShareInvestor, Asia’s leading financial internet media and technology company and the largest investor relations network in the region. For more information, email admin.th@shareinvestor.com. Website: www.ShareInvestorThailand.com

JWD to acquire 20% stake in ESCO, sealing partnership with PSA

  • Becoming a major international shipping port operator, extending Multimodal Transportation
  • Partnering with fellow ESCO shareholder PSA Singapore, world’s largest terminal operator

JWD InfoLogistics PLC (JWD), specialized in ASEAN logistics and supply chain solutions, announces a major investment, when on July 23 it agreed to acquire a 20% stake in ESCO, a Thai shipping container port operator and supply chain operator, with PSA Singapore, the world’s largest port operator by equity-weighted throughput, as ESCO shareholder.

With the acquisition, JWD will become a major international container terminal operator at Laem Chabang Deep-Sea Port and inland container depot (ICD) service provider at Ladkrabang, increasing its capability for multimodal transportation services, by land, sea and rail.

JWD InfoLogistics (SET: JWD), ASEAN top specialist in supply chain solutions, will acquire up to 20% of ESCO, the operator of international container terminals at 3 locations within Thailand’s Laem Chabang deep-sea port.

Mr Charvanin Bunditkitsada, Executive Committee Chairman and CEO of JWD, said “This investment is in line with our 5-year strategic plan to increase capability for multimodal transportation services. On July 23, our Board of Directors authorized JWD Transport (Thailand) Company Limited, a subsidiary of JWD, to acquire 20% of the shares in Eastern Sea Laem Chabang Terminal (ESCO), a major international container terminal operator at Laem Chabang Deep-sea Port in Chonburi Province and an inland container depot (ICD) service provider at Ladkrabang. With the share acquisition, JWD also becomes a business partner of PSA, manager and operator of Singapore’s world-class transshipment hub, as PSA is also a shareholder in ESCO.

“We consider this significant investment a major undertaking this year, to be funded by the recent issuance of debentures as well as from operating cash flow. Initially, JWD Transport will take a 15% effective share in ESCO, with an option to increase to 20% within the next 6-12 months,” Mr Charvanin said.

ESCO currently operates international container terminals at 3 locations within the Laem Chabang Deep-Sea Port; i) ESCO (B3), where ESCO directly develops and manages a concession from the Port Authority of Thailand (PAT); ii) LCB1 (B1) terminal and iii) LCMT (A0) terminal, with ESCO a shareholder of the company that holds the concession to operate both terminals. In 2020, the three cargo terminals handled about 2 million twenty foot-equivalent units (TEUs), or 20% of the total throughput processed at the Laem Chabang Deep-Sea Port. The demand for services at the international container terminals is expected to grow continuously with the recovery of the world economy following improvements in the pandemic situation in the USA and Europe.

ESCO is also one of 6 inland container depot (ICD) service providers at Ladkrabang handling container traffic for various shipping lines not located within Laem Chabang Port, helping reduce lead time and transportation cost. Revenue is derived from the operation of the container yard and import and export warehouses, along with Customs clearance services, and furbishing and transporting containers by land and rail – which will increase opportunity for JWD’s freight business and offering additional services to users of Ladkrabang ICD Station.

“JWD expects to realize its share of capital gains from ESCO no later than October,” Mr Charvanin added. “The investment in ESCO will serve as an extension of our international freight port operations in Laem Chabang. With our stake in Transimex, a major logistics provider from Vietnam, incoming international shipping port service business will empower us to provide multimodal transportation services, connect a wide range of freight services including by car, rail, water, and increase the opportunity to expand our customer base from container port service and ICD Ladkrabang station service to provide a full range of logistics services.

“JWD is already providing multimodal transportation services, such as transportation and transfer of general cargo, vehicles, hazardous cargo and chemicals, the transportation of cargo from Bangkok to the international container terminal at Laem Chabang, the lifting and transport of containers by rail from the Northeast, from the Eastern Economic Community (EEC), as well as the industries from Rayong Province to Laem Chabang Port. Therefore, this investment will help to expand our customer base as well as both our Bangkok-to-Laem Chabang and ICD Ladkrabang-to-Laem Chabang transportation services. Also significant is the provision for using the cargo traffic data from Laem Chabang international port to further develop our logistics capabilities,” Mr. Charvanin concluded.

Visit: JWD InfoLogistics PLC (SET: JWD); Bloomberg: JWD.TB, Reuters: JWD.BK; https://jwd-group.com/en/.
Media: Yuttachai Praikanahok, MT Multimedia for JWD, T: +66 9 1736 2866, E: yuttachai.p@mtmultimedia.com