SCG, partner team up for new venture

SCG, partner team up for new venture

SET-listed Siam Cement Group (SCG) has formed a joint venture with Yamato Asia Ltd to invest in a logistics business focusing on small parcel delivery to capitalise on the growing trends of e-commerce and m-commerce.

The deal was done via SGC's subsidiary SCG Cement-Building Materials, which holds a 65% stake in the 633-million baht joint venture, SCG said in a statement.

The new company, SCG Yamato Express, will provide full logistics services nationwide, specialising in the business-to-consumer (B2C) and consumer-to-consumer (C2C) segments and small parcel delivery.

The move is part of plans to capitalise on B2C and C2C logistics, which have shown strong growth in line with e-commerce and m-commerce.

SCG expects this logistics segment to grow more than 10% over the next five years. For its part, SCG Cement-Building Materials enjoyed logistics-related sales of 14.5 billion baht in 2015.

Its partner, Yamato Asia, is a subsidiary of Yamato Holdings Co Ltd, a conglomerate company that provides Japan's top-ranked express home delivery service. Its delivery service is internationally known as TA-Q-BIN or Black Cat.

The company has also moved into non-delivery segments such as e-business, financial and autoworks businesses and has a presence in 23 countries.

The move was in line with global trends, which have seen people increasingly making purchases though digital-based e-commerce.

The growth of both e-commerce and m-commerce are expected to increase demand for logistics substantially over the next few years.

An analyst at the Kasikorn Research Centre has forecast that land logistics will grow by 5.5% this year with a total value of 137 billion baht due to the rise of digital-based shopping.

An analyst at the centre said digital purchases are expected to grow substantially as the government continues to promote the digital economy as well as "Thailand 4.0", which entails shifting all economic activities online.

"The only thing that cannot be done online is the delivery and that provides huge room for logistics, especially small parcel delivery, to grow," said the analyst.

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