Global Distribution Centre from Expo
View(s):Expolanka PLC (Expo) is in the process of establishing ‘Expo Global Distribution Centre’, a value added bonded warehousing facility under the free-port regulations at the Katunayake Export Processing Zone, officials said.
“The centre is designed to provide value added services to international apparel retailers operating in Sri Lanka and the region,” Hanif Yusoof Group CEO Expolanka Holdings PLC told the Business Times. He added that the main objective of the venture is to lock in the freight customer base by providing more value added logistics services at point of origin – enabling them to save costs and manage the supply chain effectively. “This will also enable Sri Lanka to better compete with countries such as Dubai and Singapore which already has such commercial hub facilities,” Mr. Yusoof said.
He said the group’s main focus this year will be on positioning Expolanka’s freight operations as the largest freight and logistics provider within the sub continent. “We want to increase the group Return on Equity (ROE) from the current levels by restructuring or divesting low ROE generating businesses within the group”, he said. As a part of the process, several business segments were realigned last financial year with the aim of achieving a 25 per cent ROE in the future.
As per Expo’s financials, only the freight and travel sector has been successful in achieving this target. Mr. Yusoof added that the company within this calendar year would be looking at divesting non core businesses which could drag down overall performance. “With our portfolio restructure, all our passive investments will be divested. By the second quarter, the balance portfolio restructuring will be done,” he said, noting that Expo is becoming leaner.
Freight and Logistics lead the contribution at 90 per cent in the company which currently operates in 17 countries across Asia, Africa, USA and the Middle East. Mr. Yusoof added that they hope to bring in approximately Rs. 1 billion as proceeds from the restructure within the next 12 months.
Keeping in line with the company’s global outreach, the freight arm was recently rebranded as Expolanka Freight Ltd (EFL). EFL is known for its premier and tailor made services in the fashion industry, Mr. Yusoof said, adding this sector comprises of air and sea freight, logistics and warehousing.
A bulk of freight revenue consists of apparel exports. During FY 2013, the company entered several key markets in USA, Hong Kong and China, by setting up freight stations. These are expected to breakeven in 2013-14, he said, adding that Bangladesh is witnessing significant volume growth.
He added that the company’s new office openings in Africa and Myanmar which is due this year will increase their reach. The company has added 100,000 sqft to its new warehousing facility in Orugodawatte, which is to be operational in the second quarter of 2013/14.
Expo is the only listed entity in Sri Lanka that has a considerable sub continent footprint, Mr. Yusoof said, adding that now 60 per cent of net profits are generated from the Indian subcontinent and future investments are focused within the region.