DRB-Hicom grows logistic chain

ONE logistics group that is certainly worth mentioning is the diversified DRB-Hicom Bhd.

Over the past few years, the group has been on an acquisition spree that has seen it buy into significant parts of the logistics chain. DRB-Hicom is the major shareholder of Pos Malaysia Bhd, which is seen as the most extensive last mile operator in the country. DRB is growing its logistics business through its subsidiary KL Airport Services Sdn Bhd (KLAS), which is an independent ground handler that provides a comprehensive range of services to various commercial airlines operating through Malaysian airports.

KLAS has acquired Konsotium Logistik Bhd and more recently bought Gading Sari, air freight operator.

Says KLAS group CEO Datuk Shukrie Salleh, “The group’s vision, through acquisitions, is to be the leading integrated logistics solution provider. Through these acquisitions we are now able to offer land, sea and air logistics services, aimed at providing a one-stop solution to customers.”

He adds: “KLAS handles and receives cargo that can be extended through Konsortium Logistik for both land and sea as well as through Pos Malaysia which provides the last mile service to the public with its 700 touch points throughout the country. The latest addition of Asia Cargo Express (formerly known as Gading Sari) is another milestone in our logistics business and puts us in a position to offer a new distribution channel to Sabah and Sarawak.”

But with so many assets acquired, the question does arise if the group is able to make all the different parts work together. On this, Shukrie says that the group has in the past been able to transform and unlock values in companies that the group acquired. “We have also groomed a pool of talent that are proficient in business strategies, management and operations at all levels through cross functional on the job training and deployment”.

In the case of Pos Malaysia, while it has a wide reach, it is said to hold more potential and the question arises as to whether the DRB group will be able to tap that. For example, if its express courier service Pos Laju were to be spun off and run more professionally, it too could achieve the kind of valuation that GD Express Bhd enjoys.

Pos Malaysia covering group CEO Azlan Shahrim says Pos Malaysia has executed plans to enhance existing operations that includes investments into its IT infrastructure to take advantage of opportunities arising from the rise of e-commence.

One example is the recent roll-out of Pos Malaysia’s Post Retail System (PRS), an integrated front-end platform catering to Pos Malaysia’s over 200 types of counter services. Pos Malaysia’s integrated parcel centre is another project nearing roll-out that caters to the expected rise in parcels and small packets as a result of the rise in e-commerce.

Meanwhile, on the question of whether the DRB-Hicom group is still on the lookout for more bolt on acquisitions for its logistics services, Shukrie says this option is always open if the need and opportunity arises.