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Monday, July 13, 2020

RM1.5 Billion e-commerce Logistics Business Confirmed by Sanichi Boss





Fantastic! We have been saying that Sanichi Technology Bhd and PDZ Holdings Bhd are jointly planning to develop an e-commerce logistics hub in Johor and this has turned out to be true.

 

The New Straits Times (NST) reported today that PDZ and Sanichi are in a partnership to develop a regional e-commerce logistics hub in Johor, that may cost over RM1.5 billion.

 

It said the logistics hub is designated to handle activities related to transportation, separation, coordination and distribution of goods for local and international transit, and will target supply-chain players and will be similar to the one developed by China e-commerce logistics giant Alibaba Group Holding Ltd in China.

 

The NST has seen a document stating that the hub is expected to be developed over 234 acres in Desaru, Kota Tinggi. It said both PDZ and Sanichi will jointly apply for approval from the relevant government agencies in Johor to develop the hub.

 

The NST quoted Sanichi group managing director Datuk Sri Dr. Pang Chow Huat who confirmed that the company is planning to develop the e-commerce logistics hub with PDZ.

 

Pang said the logistics hub is a mixed-development, comprising an e-commerce center, a distribution center, warehouses and a transit center and that "it will run into several billion ringgit."

 

He said both PDZ and Sanichi plan to develop the logistics hub to ride on the exponential growth in the e-commerce business across Asia.

 

We have said that PDZ has won a RM600 million contract from a big e-commerce platform operator in China. The Chinese operator could be Alibaba Group or Tencent Holdings Ltd who currently dominate the China e-commerce market with platforms such as Taobao and JD.com Inc.

 

Could it be that PDZ is developing the hub to also support its RM600 million contract, which we think is for 2 years? Or is PDZ expecting to secure another contract soon from neighbouring Singapore? Well we can speculate a lot of things but there may be some truth in it.

 

The e-commerce business is very lucrative right now because of Covid-19 and everybody wants a hand in it.

 

In fact, we have also mentioned that Tan Sri Syed Mokhtar Albukhary could be eyeing a controlling stake in PDZ to expand his empire. Syed Mokhtar has a few companies doing logistics and they are making a lot of money.

 

Let's hope this tie-up between PDZ and Sanichi becomes a successful venture as there are a lot of opportunities out there to build the logistics business.

 

PDZ is involved in the container liner business. According to its website, it operates six vessels that cover domestic and regional trade between Malaysia, Brunei, Singapore and Myanmar.

 

The stock has risen by over 200 per cent from nine sen on July 7 to its closing price of 24 sen today, boosting its market capitalisation from RM79.79 million to RM208.35 million.

 

The stock rose 3 sen or 14.63 per cent higher today, and a total of 581 million shares were traded today.


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