Tiong Nam eyeing Vietnam, Myanmar

SHAH ALAM: Tiong Nam Logistics Holdings Bhd sees Vietnam and Myanmar as its new overseas venture to further grow its business.
"We're still trying to find reliable partners there, this is one of the aims we hope to achieve to be an Asean player, rather than just a Malaysian player," its executive director Victor Ong (pix) told SunBiz in a rare interview with the media.
Currently Tiong Nam has business operations in Singapore and Thailand.
Founded in 1975, Tiong Nam began as a small scale cargo business handling consolidated cargo and micro distribution within Penisular Malaysia.
Ong said the group is optimistic of maintaining the growth it demonstrated in the last financial year. Its FY13 net profit surged 330.71% to RM74.71 million from RM17.35 million in FY12.
Tiong Nam reported a net profit of RM14.80 million for the second quarter ended September 30, an increase of 25.99% compared with RM11.75 million in the previous corresponding period, supported by new total logistics customers as well as the increase in transportation charged rate and rental rate of warehouses.
This brought its nine-month net profit to RM28.0 million from RM27.10 million.
The group is involved in warehousing, customs forwarding, cold room facilities, express delivery and even crane and forklift rental services.
Ong stressed that logistics will still be its core business, even though the property segment, which focuses on industrial properties, contributed one third to the group's revenue for the last financial year.
"Property is our side income, we're not changing our core business, logistics is still our main business… The reason we go into the property is because of our logistics network," he said.
Ong opined that the property market has reached near saturation and the group, which has 116 acres of land bank, has a cautious view on the property segment, and that the business depends on going in at the right time.
"We do have on-going projects, but as the market is at the high side now, (we are evaluating the situation), but if there are opportunities, we definitely will have new projects coming up," he said, adding that these projects will be located in Shah Alam and Johor Baru.
Besides selling its industrial properties, Tiong Nam also leases the buildings out to secure recurring income for the group.
For its logistics segment, Tiong Nam is looking to build a cold chain hub in Shah Alam, as part of its focus on the cold chain business.
"The outlay for cold chain business is higher than the normal business, so it brings value to our shareholders. Besides cold chain, we also want to automate some of our warehouses to save space," Ong said.
He said the group has a diversified customer base covering different sectors, with oil and gas, fast-moving consumer goods and electronics as the main industries, contributing about 50% to group revenue.
"We started off as a door-to-door service provider, no matter how big or how small the good is, we fulfill it and deliver for them," Ong said.
According to a survey by Frost & Sullivan, the Malaysian logistics industry is projected to expand at a double digit compound annual growth rate (CAGR) of 10.2% to reach RM207.4 billion in 2017.
Ong said Tiong Nam has always been looking at merger and acquisition opportunities to grow its business, but nothing has been concluded as yet.
"People have given us a lot of proposals, we'll pick one that will bring benefit to our shareholders," he said.
The group has 50 warehouses nationwide and is looking to build or acquire more warehouses.