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CWT: Staying Rooted To Core Strengths And Challenging New Frontiers (Part 1)
Corporate Digest | 02 May 2014
By: Ong Qiuying
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By: Peter Ng
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Sitting along the stretch of Tanjong Penjuru Road are several large industrial properties of CWT along with its head office tucked at the end of the street. These properties are just but a fraction of the portfolio of this leading solutions provider of integrated logistics and supply chain management.

The man behind the success story, Loi Pok Yen, CWT’s chief executive officer, sits across his desk in his sea-view office as he shares CWT’s developments and aspirations for the coming years in an exclusive interview with Shares Investment.

Named EY Entrepreneur of the Year – Logistics Winner, Loi has much to be proud of after taking over the helm of CWT in 2005. Today, CWT has a global presence in around 50 countries and network connectivity to around 200 direct ports and 1,500 inland destinations. The group also manages over 12 million square feet of global warehouse space.

Setting Apart From Others
Underpinned by its logistics business, its diversified and related business activities, which include commodity marketing, engineering services and financial services, together forms CWT’s integrated business.

“We believe in delivering a holistic approach in terms of servicing our clients, where we extend beyond just supply chain management, and provide services in information technology, engineering and financial support for our clients,” Loi commented.

Given the wide range of its capabilities, they are able to provide a range of services to suit the needs of their clients. These efforts help to add value for its customers as it effectively manage costs and reduce price risks.

Significantly, Loi pointed out that CWT’s core strength is in bulk freighting between countries, which is a unique space in the industry as other common freight services are usually for smaller packages or parcels.

Silver Lining In Warehousing
A naturally defensive business in nature, Loi highlighted that CWT has been performing well for its overall logistics business and achieving a healthy growth despite coming off from a high base from previous years. Particularly, forming one of the company’s main competitive strengths in this area is its abundance in logistics infrastructure, especially on the warehouse front.

Noting the rising supply of warehouses in Singapore with the expected delivery of a number of warehouses over the next few years, Loi remains positive on the warehousing market. He shared that, “Even with the supply peaking, rates for warehouses are likely to be flattish as the long-term nature of contracts in this segment meant that we will not be significantly impacted by any price changes with contract renewals making up only 15 percent to 20 percent of total contracts per year”.

CWT’s optimism can be observed as it maintained its focus on expanding warehouse capacity in Singapore, through the addition of three new assets into its portfolio this year.

Strategically located in Jurong Pier, the 725,000 square-foot Singapore Wine Vault, houses an arsenal of cold ambient storage equipment, granting it with capabilities in providing cold chain logistics and distribution services to its customers.

With CWT Jurong East Logistics Centre achieving temporary occupation permit on 3 January 2014, the other two assets also to be completed this year, are the Singapore Wine Vault and CWT Pandan Logistics Centre.

The Singapore Wine Vault is strategically located in close proximity to Jurong Pier along Fishery Port Road. The 725,000 square-foot facility houses an arsenal of cold ambient storage equipment, granting it with capabilities in providing cold chain logistics and distribution services to its customers. Furthermore, CWT’s cold chain logistics processes are certified with ISO28000 and HACCP, which are certifications for supply chain management and food standard respectively, ensuring that this facility is able to meet the most stringent requirements.

The development of CWT Pandan Logistics Centre, with completion date expected to be around end-2014, is a multi-storey ramp-up logistics facility, which will add 640,000 square-foot of leasable warehouse space to the company’s portfolio.

“We believe the new assets would be catalytic to our earnings going forward and expect CWT Jurong East Logistics Centre to begin contributing to our top and bottom lines this year,” Loi noted. “The upcoming two assets have also achieved approximately 75 percent in pre-committed leases so far, further enhancing our earnings visibility.”

Find out more about CWT’s commodities trading portfolio and business outlook here.

This is a co-written article of Shares Investment, which lays out the analytical ideas and thoughts of the authors, who are well versed in investments and market concepts.

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