Thailand Post pursues foreign logistics work

Thailand Post pursues foreign logistics work

Goal is to have major Indochinese presence

Thailand Post Distribution, the logistics arm of Thailand Post, is seeking a private partnership in a bid to expand its business to the international market.

"We are looking at a prospective local distribution company to help us expand abroad over the next few years," said Warakan Srinualnad, the unit's chief executive since March.

"We plan to start with the establishment of our first international operation in Indochina."

The state postal enterprise aims to become a major logistics company in Indochina by 2019.

Thailand Post Distribution is on the verge of signing deals with several state agencies to provide logistics services.

It is also in talks with and other e-commerce operators to cash in on the strong increase in the sector.

It also plans to increase distribution and warehousing facilities along borders near the planned special economic zones to serve opportunities stemming from new investment and cross-border trade.

"As a state postal enterprise, we're not allowed to compete directly with private companies due to legal restrictions, so we need to have a private partner to help us expand abroad," Mr Warakan said.

Launched in January 2014 with registered capital of 350 million baht, Thailand Post Distribution expects 400 million baht in revenue from logistics services this year, up 10% from 2014.

But the state enterprise expects to report a loss of 10 million baht in its second year of operations.

Up to 90% of logistics revenue stems from medical and pharmaceutical companies and the rest from e-commerce.

Mr Warakan said revenue was projected to grow by 10-15% in 2016 after breaking even during that year.

Thailand Post Distribution has strong advantages from its postal network.

"Given our strength of 5,000 post offices nationwide coinciding with 16 major distribution centres in provinces and vast synergies to complement transport and logistics structures, our logistics business looks promising," Mr Warakan said.

Thailand's logistics industry has high potential to grow given that logistics costs now account for 15-17% of GDP.

Mr Warakan said the stellar performance of Thailand Post was due mainly to solid management and organisational structure, clear comprehensive policies and the strong spirit of employees.

Thailand Post is in the process of selecting a new president to succeed outgoing Anusara Chittmittrapap.

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