Century Logistics stays optimistic

CENTURY Logistics Holdings Bhd, a logistics and supply-chain services provider, expects to maintain last year’s performance in the current year ending Dec 31, provided the economy does not deteriorate further.

Certain business segments are still doing well amid the weak economic climate, according to deputy managing director Mohamed Amin Kassim.

“For example, our logistics services in containerised goods are not affected by the downturn due to a wide customer base from various sectors,” Mohamed Amin told StarBiz.

“Also, our supply-chain management is holding up quite well as our key customers are still enjoying optimal cost of their supply chain via our services,” he said.

Century Logistics provides supply-chain management solutions which involve the procurement and assembly of different kinds of products such as refrigerators, vacuum cleaners, plasma televisions, air-conditioners and washing machines.

“The demand for warehousing services is quite high now although movements may not be as active as before,” he said, adding that the company’s oil logistics business had returned to its peak level due to the weak oil price.

Century Logistics, which has a licence to provide oil logistics services on floating storage units, owns six very-large crude carriers that provide ship-to-ship oil transfer off Pasir Gudang and Port of Tanjung Pelepas.

In the middle of last year, according to Mohamed Amin, the oil logistics business was temporarily stunted due to record high oil prices.

“There were a lot of speculation about the future of oil prices then and that had halted buyers from trading,” he said.

Century Logistics’ operations in India, China and Thailand are also promising. “Our team has just came back from India and is quite sure the demand is still healthy there,” Mohamed Amin said.

And although its business in China started only last year, the company expected to record a modest profit this year, he added.

Century Logistics operates in China via Century-YES Logistics (Yichun) Co Ltd, managing the logistics system of an inland port.

The company also has high hopes for its operations in Bangkok where it is investing RM25mil to RM30mil in a distribution centre.

Mohamed Amin Kassim “The centre is expected to be operational by September and due to the interest and advice given by multinationals there, I believe business should begin fast.

“Some multinationals that are near to our facility there are closely monitoring our expansion and we have specifically built our facility according to their needs,” Mohamed Amin said.

Despite the positive outlook, he noted that it could be a challenging year as the company was unsure of the economic situation for the rest of this year.

Mohamed Amin said logistics providers would have a direct impact in line with the double-digit throughput drop in ports and air-freight industries year-to-date.

“Right now, our freight business is affected by lower shipping rates. We have to reduce our margin to continue serving our customers.

“Our transportation division (conventional trucks) also experienced a slide due to the downturn,” he said.

In its previous financial year, Century Logistics posted a net profit of RM15.9mil on the back of a RM156.9mil revenue, representing a drop of 23.9% and 3.7% respectively versus 2007.

“I think last year’s results were still quite okay, given the high oil price that had impacted our business,” Mohamed Amin said.

“But part of our lower net profit was due to the business venture in plastic-lining manufacturing that did not materialise due to the different goals (set) with our partner then.

“Thus, we had to write off about RM4mil due to the machinery that we had bought to support the business.”

Source: http://thestar.com.my/maritime/story.asp?file=/2009/3/30/maritime/3567090&sec=maritime ,30 March 2009