Wice Logistics Plc (WICE) has been listed on the Stock Exchange of Thailand since July 2015. Managing Director Chudet Kongsoonthorn discusses the company's strategy and outlook
Please explain the history of WICE
We started in 1993 as a part of WICE Group which had firms throughout Hong Kong, Singapore and Thailand as a freight service company. Since then we have continually our expanded our services from purely sea freight to including air freight, custom broker, transportation and so forth, this expansion coincided with WICE becoming fully independent, expanding our customer base, and subsequently listing on the Stock Exchange of Thailand in July 2015.
What is WICE's business model?
We are a one stop logistic service provider for our customers by providing door-to-door services. This involves multiple processes starting from documentation, transportation, warehousing, air freight or sea freight, and custom broker. We have offices in three locations, Bangkok, Suvarnabhumi Airport and Laemchabang. Today half of our revenues are from sea freight with 20% from air freight the remaining from warehousing and transportation. In the past decade we have increased our value added services so that any questions that posed by customers in terms of documentation for the import and export of products, physical transportation of goods domestically and internationally, warehousing and so forth can be serviced by us and then we become an integral part of their business. An example is we have an international customer that has multiple suppliers within Thailand, in the past they had to co-ordinate with each supplier, thereby increasing their logistics costs and time, today we manage their logistics and ensure that the delivery of goods is streamlined, aggregated and by doing this we have minimised their internal work, their costs and improved their logistics, this is just one of the services that we consider value-added for our customers.
Who are WICE’s target customers?
The majority of our customers are within the industrial estates in Ayudhya, Chonburi, Rayong and other parts of Thailand. These are the large manufacturers that are in the electronics and automobile industries as these two sectors represent the largest exporters from Thailand and have a lot of volume whether it be via sea or air freight.
What impact does the Thai economy and the global economy have upon your business and industry?
We are naturally impacted by positive or negative changes in both Thailand and globally because the majority of our customers are export based and we have seen some impact from the recent slowdown in the global economy. But because we ensure that we have well diversified customer base that exports to the US, China and ASEAN this helps to mitigate the broad slowdown, also because we provide services for domestic logistics via our transportation and warehousing solutions we are able to maintain our existing business and continuing expanding.
What differentiates WICE from its competitors?
Service and trust are the two factors are what our customers value the most. From our side we are providing a service that we are able to control end to end and allows us to give a commitment to our customers to meet their schedules. Because they are part of a global supply chain where there are large volumes, multiple moving parts, if their products are not delivered on time it will have a massive impact on the rest of the chain and thus our commitment to service is what has differentiated us from others in the market.
Why did WICE decide to IPO?
We required more capital for expansion to achieve our long term goals. Within the first twelve months of becoming a publicly listed company in 2015, we have already invested in expanding our trucking and trailer capacity, implemented a new information system to further streamline operations, begun construction on a new warehouse to expand capacity and acquired Sun Express Logistics (SEL) in Singapore to expand our capabilities in international logistics.
Why did WICE acquire SEL?
We acquired 70% of SEL because they provide integrated inbound and outbound freight transportation services by air and sea freight similar to us. But whereas our core capability originated from Sea freight their core capability is from Air Freight, this along with their location within the Free Zone in Changi Airport in Singapore, their strong customer list of Multinational Corporations and their expertise in international logistics will allow us to expand our own capabilities, service offerings to our clients, and give WICE a global footprint. Financially, the share acquisition is divided into two phases, 50 percent is paid in cash THB 291 million in cash and the remaining 50 percent is via a share swap where we have already issued 51.90 million new shares at THB 2.80 per share. In the second phase we have the right to buy the remaining 30% of SEL in 2020.
What are the biggest risks facing your business?
There are multiple factors that can disrupt our business whether it be internal or external. Internal factors we are able to control and ensure that our operations are smooth, however external factors such as the airport shutdown and the floods in Thailand were impediments to us and our clients that we could not control. However, during those periods we had to help our clients with these issues and troubleshoot solutions whether it be preparing re-routing, re-directing products to U-Tapao or Chiang Mai, or organising boats to reach their factories to help them transport their finished goods or inventory to safer locations. The clients from those difficult periods are still with us today because of our commitment, ability to problem-solve and continue our service despite external challenges.
Where do you see WICE in five years from now?
We aim to grow both in Thailand and internationally. When WICE decided to become a publicly listed company we presented to our shareholders that WICE would aim to grow 20% per annum to 2018 and because we have invested substantially within the country by expanding our facilities, locations, capabilities and staff, and internationally with the acquisition of SEL we believe that we are on track. Our long term vision is to provide a total logistics service for our clients not just in Thailand but internationally as well and to be able to control the end to end logistics service to ensure our commitment and service for our customers.