SCG JWD Logistics Public Company Limited (SJWD) announces its expansion plan for logistics and supply chain businesses in the ASEAN region following the merger, with 5-component roadmap to push this year’s revenue to 30 billion baht through the 3.5-to-5-billion-baht investment budget. The set revenue goal for the next three years (2024-2026) is for an average annual growth of 12 percent with the pilot collaboration project to reduce costs by merging orders for goods and services, focusing on expanding existing businesses and venturing into new services. At the same time, preparations are underway to wrap up a major deal in acquiring 100-percent stake in SCG Inter Vietnam Co., Ltd. to provide services to SCG Group businesses and general customers in Vietnam. Another component of the plan is to proactively provide cross-border cargo services between Cambodia and Thailand in the form of a “hybrid model” – via rail and road, while also planning to apply the “cold storage” and “automotive logistics” success models in Thailand, along with similar forays into Vietnam, Indonesia and the Philippines.

Mr. Bunn Kasemsup, Co-Chief Executive Officer of SCGJWD Logistics Public Company Limited (SJWD), ASEAN’s biggest logistics and supply chain service provider, revealed that, following the merger between SCG Logistics Management Company Limited and JWD InfoLogistics Public Company Limited to become SCGJWD Logistics Public Company Limited (SJWD) as from February of this year, the merged Company has moved ahead with the set roadmap consisting of five components, namely, (1) To save cost and increase revenue from cross-sale and up-sale from existing customer bases; (2) To create added value to existing services in which both parties possess distinctive expertise; (3) To seamlessly connect services in the ASEAN region by applying in the ASEAN region the business models that are already successful in Thailand; (4) To provide D2C (Direct to Consumer) services to meet changing customer needs; and (5) To continually expand the scope of services to new businesses. The Company has set a revenue target of 30 billion baht for 2023, of which 90 percent is expected to be generated from Thailand and 10 percent from abroad. Also, the investment budget has been set at approximately 3.5 to 5 billion baht and more M&A deals are expected to be finalized in 2023. As for the long-term goal up to 2026, or for the next 3 years, average sales growth are expected to be 12 percent per year, with the proportion of revenue from abroad projected to increase to more than 30 percent.

Since the completion of the merger, some cost-reduction cooperations have already been implemented, such as combining orders for goods and services including the international freight services, and insurance purchases, etc., the merger of transport fleets and improving management efficiency, adjustment of the Company’s credit rating by respected credit rating agencies which would result in the reduction of financial costs for the Company. In addition, the Company also utilized the advantage of its customer bases of both parties through the implementation of cross-sale and up-sale to increase revenue well into the future. As for adding value to existing services that will be implemented under a strategic plan to expand businesses in Thailand and the ASEAN region, these include the service connections in the ASEAN region by extending the successful business models in Thailand, the D2C services, and the expansion of the scope of services to new businesses.

Where the strategic plan to expand businesses in Thailand and ASEAN is concerned, the Company is preparing to acquire 100 percent shares of SCG Inter Vietnam Co., Ltd. from SCG International Co., Ltd. Currently, SCG Inter Vietnam is a logistics and supply chain service provider in Vietnam. Its main customers are businesses in the SCG Vietnam group as well as general customers. Most recently, SCG Inter Vietnam is set to provide logistics and supply chain services for chemical products in the Long Son Petrochemicals (LSP) project, which is Vietnam’s first large-scale petrochemical complex in Vietnam, invested in by the SCG Group. The acquisition of the shares is expected to be completed on June 1, 2024. The Company expects that in the beginning, revenue realized from SCG Inter Vietnam will be approximately 800-1,000 million baht per year. Another development is the cooperation with Transimex Corporation, which is a leading logistics service provider and a local business partner in Vietnam to jointly expand the businesses in that country.

As for expanding the scope of services to new businesses, the Company has combined the expertise in cross-border transportation services of both parties with Cambodia Railway, a partner in Cambodia, to provide cross-border cargo services from Cambodia to Thailand in the form of a “hybrid model” covering rail and road transport. This will increase service capability and help reduce costs for customers. The Company is considered the first operator in Thailand that can provide hybrid cross-border transportation services between Cambodia and Thailand as well as “door-to-door service" (from sender to receiver), with the emphasis on being the “First Mover” in offering logistics and supply chain services. Also, the Company plans to upgrade its driving school business to be a “driving institute” to expand training services to personnel within the SCG Group and to external customers.

Mr. Charvanin Bunditkitsada, Co-Chief Executive Officer of SJWD, said that the Company plans to expand its existing businesses and proactively provide new services through joint ventures and M&As, by preparing to apply the business models that have been successful in Thailand to the expansion of investment in the ASEAN region to connect the network of logistics and supply chain services in the region and be able to better meet the needs of the customers.

Recently, the Company has expanded its automotive parts transportation service business to support the fast-growing electric vehicle (EV) industry in Thailand, more specifically with a plan to establish a joint venture in the country to provide integral transportation services for EV spare parts from China to the manufacturing plants as well as deliveries to car dealers across the country. The Company expects to start recognizing partial revenue next year and realizing full-year revenue from 2025 onwards.

At the same time, the Company is planning to apply the “cold storage” and “automotive logistics” business models to expand investment in Vietnam, Indonesia and the Philippines which are the top three most populous countries in ASEAN. The investments will be either in the form of shareholding, or co-investment with partners in each of the countries. The Company considers all three countries to have high potential due to good economic growth rate that will lead to increased demand for food consumption, while they are also recognized as production bases for the region’s automotive industry.

In addition, the Company plans to expand its temperature-controlled transportation services to other product groups such as medicines and medical supplies, health products, etc., which is built on the expertise in cold storage warehouse services and temperature-controlled transport for vaccines. The investment budget (only for the temperature-controlled cargo business) according to the 5-year plan, is approximately 450 million baht.

“After the merger to become SCGJWD Logistics, the Company has grown in strength and potential by combining the expertise to expand businesses in the ASEAN region more quickly and becoming ready to deal with the competition in the industry and the challenges from various factors,” Mr. Charvanin concluded.