Thailand Post plans to spend 10 billion baht on establishing two fully automated sorting centres to capitalise on the growing logistics business, in line with burgeoning e-commerce activities.

The move also serves the government's policy to drive Thailand's position as a logistics hub in Asean.

According to Thailand Post president Smorn Terdthampiboon, the company needs to boost efficiency of the mail and parcel sorting systems through automation and innovation to deal with abundant mail and parcel deliveries.

The fully automated sorting system will help reduce damage and errors in sorting operations, she said.

One automated parcel sorting centre will be located in Chon Buri province and the other in Wang Noi district, Ayutthaya province. Each centre needs about 100 rai of space. Thailand Post is in negotiations with landowners.

"The project was set as a five-year investment plan to install fully automated systems," Mrs Smorn said.

Thailand Post has 19 logistics centres, 1,300 post offices and 3,300 post office licensees nationwide.

The company has budgeted 4.4 billion baht to install mixed-mail and parcel sorting systems at the 19 logistics centres by 2022.

The mixed-mail sorter can classify mail and parcels at a speed of 8,000 units per hour, while the cross-belt sorter is capable of sorting 9,000 big parcels and boxes per hour.

Thailand Post has installed the mixed mail sorter at its Sri Racha and Nakhon Ratchasima logistics centres, while the cross-belt sorter is installed only at the Sri Racha centre.

The sorter consists of a chain of independent short conveyor belts mounted transversely along the main track. It is used to sort parcels, apparel and small items that are difficult to sort, such as fragile or high-friction items.

"The ongoing 4.4-billion-baht mixed-mail and parcel sorting system installation is a semi-automated system that improves capacity," Mrs Smorn said, adding that this will start a new chapter for Thailand Post's logistics business.

Rapidly changing consumer behaviours in product purchases, as well as the arrival of giant e-commerce platforms through local partnerships, have been intensifying competition in logistics services and creating challenges for Thailand Post.

The company has been modernising its postal and delivery operations and back-office management to be fully automated by 2021.

Last year, Thailand Post booked 27.8 billion in total revenue, up 8% from 2016, and a net profit of 4.2 billion baht, up 18% from 2016.

The company forecasts 2018 revenue of more than 30.8 billion baht and double-digit growth in net profit.