Who’s Who in Logistics Guide Provider Profile

Pos Logistics Berhad

Address: Lot 22202, Jalan Gambus 33/4 Phone Number: 603 5121 9988 Address: Off Jalan Bukit Kemuning, Batu 8.5 Fax Number: 603 5122 9898 City: Shah Alam Main Contact Email Address: [email protected] State/Province: Selangor Darul Ehsan Sales Email Address: Postal Code: 40350 Website: https://www.poslogistics.com.my/ Country: Malaysia

Overall Capability of Provider

Malaysian integrated logistics services provider.

Company Background Key Personnel

Services Provided: Abd Aziz Miskon CEO Norazmi Abdul Latif CFO Ground/Road Transportation Management Mohd Aznan Aziz Head of Commercial and Operations Warehousing/Contract Logistics

Market Area: Malaysia

Base of Operations: Malaysia

Year Started in Logistics: 1984

Asset Focus (Asset Based, Non-Asset Based, Both): Asset Based

Business Roots/Founding Business: Container Haulage

Financial Information (Latest Calendar Year)

Total Logistics Revenue ($US Millions): 73

Total Net Logistics Revenue ($US Millions): 21

Total Logistics Employees (Including Drivers): 1685

Total Long-Term Contracts Held (>1 year):

Average Contract Length (Years):

Stock Market Ticker Symbol: 1619

Exchange: Bursa Malaysia

Financial information may be actual company reported or A&A estimates. Average exchange rates for the respective year are used to convert revenues to $US. Net logistics revenue is net of pass-through revenues for purchased transportation. Parent Corporation (If Different Than Above): Pos Malaysia Group/DRB-HICOM

Subsidiaries or Related Companies: Pos Aviation Sdn. Bhd. Pos Asia Cargo Express Sdn. Bhd. DRB-HICOM Auto Solutions Sdn. Bhd. (DHAS)

Provider Assets

Dedicated Contract Carriage Power Units/Trucks: Dedicated Contract Carriage Trailers: Total Tractors: 0 Total Dry Van: 0 Total Trucks: 0 Total Reefers: 0 Total Other: 0 Total Flatbeds: 0 Total Tankers: 0 Total Other: 0

Total Transportation Assets (Trucking, Dedicated, and Other Modes): Total Tractors: 352 Total Aircraft: 0 Total Trucks: 0 Total Ocean: 0 Total Trailers: 2462 Total Other: 35

Total Warehouses/Distribution Centers: Total Number of Warehouses/DCs: 6 Total Number of Warehouses/DCs with Total Warehouse/DC Space (Millions of Sqft): 1.8 Rail Doors: 0 Average Dock Doors per Warehouse/DC:

Asset Ownership vs. Leased: Transportation Equipment: Owned Warehouses/DCs: Owned

Transportation Management Services

Transportation Services:

Air Freight Forwarding Freight Brokerage Ocean Freight Forwarding Less-than-Truckload ● International Container Consolidation/Deconsolidation ● Truckload (TL) Dedicated Contract Carriage ● Specialized TL Dedicated Carrier Capacity (Non Asset) Rail Home/Last Mile Delivery Intermodal Rail Small Package Rail TOFC/COFC

Transportation Planning: Carrier Management and Contracting ● Inbound Shipment Planning ● Outbound Shipment Planning End-to-End Load Matching Mode Conversion/Optimization

Transportation Execution: Carrier Contract File Maintenance Exception Handling Load Tendering Loss & Damage Claims Processing

Freight Bill Payment: Pre-Audit Post-Audit

Warehousing & Value-Added Services

Warehouse/Distribution Center:

● Facilities Management ● Temperature Controlled Frozen Rail Siding Refrigerated

Value-added Services:

Call Centers ● Pick/Pack ● Cross Docking Pool Distribution ● Customization Repair/Refurbish ● Inventory Control/Vendor Mgmt ● Returnable Container Mgmt KanBan Reverse Logistics ● Kitting Store Support/Direct Store Delivery ● Labeling Sequencing/Metering Lot Control Specialty Packaging Merge-in-Transit ● Sub Assembly Manufacturing Support

Other 3PL Services, Skills & Handling:

● Consulting/Process Reengineering Quality Control Factoring/Financial Services Union Services Installation/Removal ● Bulk Commodities ● Order Management ● Hazardous Materials ● Purchase Order Management Food Grade/Sterile ● Project Logistics ● ISO Certified

ISO Certified Locations: Malaysia Formalized Lean Management/Continuous Improvement Program

International Services

● LCL Consolidation NVOCC ● Customs Brokerage AES/AMS Duty Drawback C-TPAT Certified Export Crating Port-to-Port Transportation Management ● Port Services Door-to-Door Transportation Management ● Foreign Trade Zone

International Freight Forwarding Volumes & Customs Brokers: Total Annual Ocean TEUs: Export Ocean TEUs: Import Ocean TEUs: Total Annual Air Metric Tons: Export Air Metric Tons: Import Air Metric Tons: Total Annual Less Than Container Load (LCL) (Cubic Meters): Export Ocean CBMs: Import Ocean CBMs: Total Licensed Customs Brokers:

Information Technology

Information Systems: Overall Information Systems Rating: Adequate Supply Chain System Type: System Vendor/Brand: Transportation Management System (TMS): ● Warehouse Management System (WMS): Proprietary Yard Management System (YMS): Supply Chain Network Modeling/Site Location: Freight Bill Audit/Payment Software: ● ERP/Order Management System: Proprietary Transportation Planning and Optimization: Optimization Routines: End-to-End Matching/Continuous Moves Mode Conversion/Optimization Many-to-Many Supply Network Optimization

Other Technology Capabilities:

● Bar Coding ● Internet Customer Access Customer ERP System Interfaces Internet Order Fulfillment Demand & Supply Forecasting Radio Frequency Devices EDI Handling ● Real-time Track & Trace Integrated TMS & WMS XML Data Handling

Countries/Areas

Asia-Pacific/Oceania/Antarctic Malaysia

Customers and Industries Served

Relationship Customer Industry Location TM WM VA DCC Inte IM Intl SCM Lead Other in Years Aerospace Aerospace & Defense Malaysia ● ● Technology Systems Bombardier Aerospace & Defense Malaysia ● ● (Malaysia) Sdn Bhd British American Tobacco Malaysia ● ● ● Tobacco Malaysia Central Sugars Food Production Malaysia ● ● ● Refinery Sdn Bhd DRB-HICOM Defence Aerospace & Defense Malaysia ● ● Technologies Sdn Bhd Gula Padang Terap Food Production Malaysia ● ● ● Sdn Bhd Hicom Diecasting Motor Vehicles & Parts Malaysia ● ● Sdn Bhd Hicom Teck See Manufacturing (M) Motor Vehicles & Parts Malaysia ● ● Sdn Bhd Jasmine Food Food Consumer Malaysia ● ● ● Corporation Sdn Bhd Products Malaysia Navy Military, Government Malaysia ● ● Nestle (Malaysia) Food Consumer Malaysia ● ● ● Bhd Products Perusahaan Otomobil Kedua Sdn Motor Vehicles & Parts Malaysia ● ● Bhd Relationship Customer Industry Location TM WM VA DCC Inte IM Intl SCM Lead Other in Years Petronas Carigali Petroleum Refining Malaysia ● ● Sdn Bhd Philip Morris Tobacco Malaysia ● ● ● International Prasarana Malaysia Transportation & Malaysia ● ● Berhad Logistics Proton Motor Vehicles & Parts Malaysia ● ● Syarikat Motosikal Transportation dan Enjin Nasional Malaysia ● ● Equipment Sdn Bhd Tenaga Nasional Utilities Malaysia ● ● Berhad

TM => Transportation Management WM => Warehouse Management VA => Value-Added Transportation or Warehousing DCC => Dedicated Contract Carriage Inte => Integrated TM & WM IM => Intermodal TM Intl => International TM SCM => Supply Chain Network Management Lead => Lead Logistics Provider Other => Other

Editor's Comments

Editor's Comments

Pos Logistics Berhad (formerly KLB/Konsortium Logistik Berhad) is a major container haulage and automotive logistics provider in Malaysia. Container haulage is its largest business segment at 39% of the business followed by automotive logistics at 36%. Additional services include project logistics, energy and infrastructure logistics, port logistics services, and warehousing and distribution. In 2013, it was acquired by KL Airport Services Sdn. Bhd. or KLAS Group (now Pos Aviation Group) via the DRB-HICOM Group, one of Malaysia's leading conglomerates, involved primarily in the automotive industry. In September 2016, the KLAS Group was acquired by Pos Malaysia Berhad and KLB was rebranded as Pos Logistics Berhad. Pos Logistics Berhad has 26 branch offices and 12 agents throughout Malaysia and 1,685 employees.

Strengths

Automotive LLP capability; Southeast Asian transshipment.

Weaknesses

Cases & News

POS LOGISTICS’ DIGITAL TRANSFORMATION: YOU WILL NOT BELIEVE SOME OF ITS ISSUES 7/13/2016 By Masyitha Baziad, Digital News Asia

Transformation to be completed by 2019, in time for 2020 IPO First milestone was getting staffers to properly use … email!

IT is unusual to walk into a state­owned enterprise (SOE) – the equivalent of a government­linked company or GLC in countries like Malaysia – and see the person in charge decked out in jeans and sneakers.

“No need to worry – I have my orange uniform, and formal batik shirts and slacks inside the tiny cupboard behind you, in case I have to attend a meeting with government officials,” Yan Hendry Jauwena assures Digital News Asia (DNA) at his office in Jakarta.

Yan is chief executive officer of PT Pos Logistics Indonesia, the logistics arm of Indonesia’s PT Pos Indonesia, the SOE that handles postal services in the country.

As one of the oldest firms in the country – with its roots stretching back to the Dutch colonial era – Pos Indonesia has been struggling to keep up with the Internet era, in which few people send ‘snailmail’ letters.

But it is now is ready to transform itself into a technology-based logistics solutions provider through Pos Logistics, aiming to support the country’s e­commerce boom.

Yan, with 15 years of logistics experience including with Germany’s Deutsche Post DHL and the United Kingdom’s Ceva Logistics, has been tasked – and entrusted – with leading Pos Logistics’ digital transformation.

That transformation is also key to boosting Pos Logistics’ profile for an initial public offering (IPO) scheduled for 2020.

Yan is targeting for Pos Logistics’ digital transformation to be completed before it begins its IPO tour and roadshows in 2019.

The Pos Indonesia edge

In November 2015, Indonesia’s Minister of State­Owned Enterprises Rini Soemarno made a surprising move by appointing Gilarsi Wahyu Setijono – a non­government executive with a background in the fashion, investment, and electronics industries – to lead Pos Indonesia.

For Yan, the appointment is an important one for Pos Indonesia’s relevance and future, as it gives the archaic SOE a much­ needed private-sector touch.

As its subsidiary, Pos Logistics now has the flexibility of a private sector company, but with support from SOEs.

More importantly, Gilarsi has made it clear that the logistics arm will lead the digital transformation of Pos Indonesia, according to Yan.

“Pos Logistics needs to be at the forefront of our parent company’s business, and leverage on the e­commerce boom in the country,” he says.

This is helped by the fact that Pos Indonesia has 4,500 post offices, with 35,000 agents, spread across the archipelago.

“Pos Indonesia has networks even in the most remote areas of Indonesia. That is a huge advantage; there is no logistics company with that many networks,” says Yan.

“Our networks can really support the e­commerce industry both in terms of logistics and as payment points – however, we are focusing on the logistics side first,” he adds.

According to a study by the Indonesian Logistics Association (ALI) and research firm Frost & Sullivan, Indonesia’s domestic logistics industry had a market size of Rp2.15 quadrillion (US$163.4 billion) last year, and is expected to grow by 10-12% this year.

“As a subsidiary of an SOE, Pos Logistics has access to about 119 SOEs – of which 60% are in production sectors where distribution is a key part of their operations,” says Yan.

These SOEs spend up to Rp240 trillion (US$18.3 billion) in logistics every year, or about 11.2% of the whole logistics potential in the country as forecast by Frost & Sullivan, he notes.

“If we can even take just 10% of the amount spent by these SOEs – or about Rp24 trillion (US$1.8 billion) – we will definitely become the largest logistics company in Indonesia.

“No other logistics company, even the multinationals, has a market that big,” he declares.

First transformation: Simple email

But all these plans would have come to naught if Yan could not get Pos Logistics’ employees on board the digital journey.

The 35-year-old started with Pos Logistics a little more than a year ago, first as business and solutions director before being promoted to the CEO role in February.

“At the time I joined, nobody used the company’s email – people were still communicating through letters that you would only read three days after they were written,” he says.

“Coming from the private sector, I was used to reading emails first thing in the morning right up till before I go to bed. My first three months here, I barely had 10 emails in my mailbox each day,” he recalls.

With the authority bestowed upon him by the parent company, Yan issued a new set of rules for Pos Logistics, which included using the corporate email service for official communications.

“You know what happened then? People would scan their letters and send them as email attachments!

“Given the small bandwidth allocated to email, it was a disaster,” he says, adding that the company has since increased the mailbox allocation, and the corporate email service has been working out well.

For Yan, changing the basic behaviour of the organisation’s people via their email use was an important milestone in its digital transformation. Indeed, Pos Logistics employees have now ‘levelled up’ and use file­hosting service Dropbox on a daily basis, and communicate with cloud-based team collaboration software Slack.

Next: Departmental technology

To be able to serve e-commerce and large fast-moving consumer goods (FMCG) clients, Pos Logistics needed to have its own technology solutions and more comprehensive data that could help in developing faster and more accurate services.

This is why earlier this year it inked a deal with Singapore’s Anchanto for its warehousing and inventory technology.

Now Pos Logistics is aiming to deploy specialised technology at every department, and then integrate all these departments with cloud-based software that can deliver real-time analytics and reports to the directors.

Yan divides Pos Logistics’ business departments into four: Sales and marketing; operations; finance; and human resources.

Currently, the sales and marketing department is served by US-based enterprise cloud platform Salesforce.com; while the operations part is supported by a local software company called G5.

The finance department has yet to decide on its own technology, while the human resources department is now in a tender process to look for a technology solutions provider.

“Yes, each department is still operating in a silo – they are not integrated yet, but this will soon change and we are working to integrate our whole system,” says Yan.

“The goal is to have good internal systems with compatible infrastructure and hardware, and which can communicate seamlessly with many other systems,” he adds.

To achieve this, Pos Logistics has hired a team of expatriates to accelerate the company’s digital transformation – these experts are handling the ICT infrastructure, network, and systems integration.

Acquiring tech startups

Pos Logistics’ digital transformation: You will not believe some of its issuesPos Logistics’ digital transformation and ambition to lead the logistics sector in Indonesia ­­ and ultimately the region – go beyond the internal deployment of technology.

To shore up its digital capabilities, the company is planning to acquire three startups this year, one each in the mobile app, big data analytics, and enterprise solutions space.

“Currently we are in the due diligent phase, including determining the startups’ value, but announcements should be out by the end of the third quarter of this year,” says Yan (pic).

“We do not invest in fresh­from­the­oven startups – these three tech startups have been in the market for several years; they have good track records but need to scale and grow their business,” he adds.

Pos Indonesia will have a 90% of stake in each of these three startups, while the founders would hold on to the remaining 10%.

The initial reason for acquiring these startups was to ensure Pos Logistics would have all the technology it needed to accelerate its business and better serve the e-commerce sector, but it is now looking make these three startups subsidiaries that can also provide solutions to other companies, including Pos Logistics’ own clients.

All of these efforts are a fundamental part of the IPO pipeline, he says.

“When the technology deployment is completed in 2017, we can start to create more added value in 2018 and 2019, and by the year of the IPO, we would have all we need to make a more attractive offer to investors,” he adds.

KONSORTIUM LOGISTIK BERHAD (KLB) AWARDED 2016 FROST & SULLIVAN PROJECT LOGISTICS SERVICE PROVIDER OF THE YEAR 4/14/2016 KLB

On 14 April 2016, KLB has been awarded the 2016 Frost Sullivan Project Logistics Service Provider of the Year for its excellence in project logistics services. This is the first time KLB awarded these prestigious recognition at 12th Annual Frost & Sullivan Malaysia Excellence Awards held at the Grand Hyatt Kuala Lumpur.

KLB’s Project Logistics has been trusted by valued customer for excellent cargo handling with more than 20 years of experience. It has a specialization in handling high value and diverse range of complex project with end-to-end logistics programs that combine ocean transportation, customs brokerage, air freight, heavy-lift, special project management and inventory management.

Chief Executive Officer of KLB said that, "We are honoured by the confidence Frost and Sullivan Malaysia has shown in awarding KLB this prestigious recognition. Project logistics is not only about price competitiveness. It is about perfection in timing, engineering requirements, choice of tools, equipment and vehicles, also the right selection of vessels, safety compliance to the policies and regulations”.

MSA WAS AWARDED CONTRACT OF PETRONAS RAPID PROJECT 2/10/2016 KLB

On 10 February 2016, Malaysian Shipping Agencies Sdn Bhd (MSA), subsidiary of Konsortium Logistik Berhad (KLB) has been officially awarded an engineering, procurement, construction and management contract by PRPC Facilities and Utilities Sdn. Bhd. for the PETRONAS Refinery and Petrochemical Integrated Development (RAPID) project located in Pengerang, Johor, Malaysia.

PRPC awarded a contract worth USD 52 million for the provision of freight forwarding and combination of services located in Pengerang, Johor for a period of 3 years. MSA will be responsible for the utilities, interconnecting and offsite scope of work. Under the contract, MSA will provide an integrated package that will cover the whole scope of transport and logistics including for packing, marking and shipping as well as the customs clearance works.

Chief Executive Officer of KLB, Mohd Rani Hisham Samsudin said that MSA is committed to provide customers with high quality services and strong business strategy and will add value to customers’ business across the shipping, forwarding, transportation, warehousing, packaging, etc. He believe that MSA will be seen as the preferred company to handle freight forwarding package in this RAPID project.

The signing of the contract is another milestone for MSA and further cements commitment for the successful development of RAPID project.

DRB-Hicom to buy the rest of KLB stake 12/10/2013 KLB

Kuala Lumpur: DRB-Hicom Bhd has made a mandatory takeover offer for the remaining Konsortium Logistik Bhd (KLB) shares not already held by its unit, KL Airport Services Sdn Bhd (KLAS), and persons acting in concert at RM1.55 per share. KLB yesterday said this is a follow-through from DRB-Hicom signing a conditional share sale and purchase agreement with Ekuinas' unit, Bendahara 1 Sdn Bhd, to buy a 61.61 percent stake in KLB.

DRB­Hicom buys 62°/o in KLB 10/26/2013 The Star

It will launch MGO for remaining stake in the company at RM1.55 per share

PETALING JAYA: DRB-Hicom Bhd, via unit KL Airport Services Sdn Bhd (KLAS), will acquire a 61.61% equity interest in Konsortium Logistik Bhd (KLB) for RM240.97mil cash or RM1.55 per share. The purchase will be made from Ekuiti Nasional Bhd via its special-purpose vehicle Bendahara 1 Sdn Bhd.

Following this, DRB-Hicom would launch a mandatory general offer (MGO) for the remaining 38.39% in KLB at an offer price of RM1.55 per share, the company said in an announcement to Bursa Malaysia yesterday.

The purchase consideration represents a premium of about 3.33%, 4.73% and 9.93% to the five-day, one-month and three-month volume weighted average market prices, respectively, of KLB shares up to and including Oct. 24, 2013.

It also represented a price-to-book ratio of approximately two times based on the audited consolidated net assets of KLB as of Dec 31, 2012 of RM195.61mil and 1.95 times as of June 30, 2013 on approximately RM200.83mil.

The acquisition price is also reflective of a price-to-earnings ratio of about 23.60 times based on KLB's audited consolidated net profit after minority interest for the financial year ended Dec 31, 2012 of approximately RM16.57mil.

The company said the acquisition and the MGO would be financed by internally generated funds and borrowings, of which the proportion had not yet been determined.

"'The proposed acquisition is in line with DRB-Hicom's plan to develop KLAS into a leading centralised integrated logistics services provider in Malaysia by providing one-stop solution."

"It would allow it to provide a complete air-sea-land transportation solution that includes linking up warehousing, distribution and supply chain management," it said.

The proposed acquisition is conditional upon several conditions, including obtaining the consent of financiers.

In a separate statement. Ekuinas said this was its first major exit from a portfolio company after having been invested in KLB since October 2010. "The divestment of KLB is in line with Ekuinas' mandate as a private equity firm, to exit from its investment after creating value. We are pleased to now hand over KLB to the DRB group, which not only has the necessary platform, resources and entrepreneurial capabilities to take KLB to the next level, but also provides continuity in terms of bumiputra ownership," Ekuinas chief executive officer Datuk Abdul Rahman Ahmad said.

Printed On 10/5/2020 Copyright ©2020 Armstrong & Associates, Inc.