Boon Rawd Brewery Co, the maker of Singha beer, has formed a joint venture with Australia-based Linfox to set up a new logistics firm to tap into the segment's growth, both in Thailand and regionally.
With registered capital of 250 million baht, divided equally between Boon Rawd's supply chain arm Boon Rawd Supply Chain Co and Linfox Holdings 2018 Thailand, the local operator of Linfox, BRF Logistics aims to dominate distribution and logistics networks in Thailand and across the region over the next three years.
The joint venture has a vision to build a strong and complete logistics network to support expansion in the regional economy by combining the expertise of the two companies, said Piti Bhirombhakdi, chief executive of BRF Logistics.
Boon Rawd plans to use its strengths from 85 years in the business, particularly its distribution network and representatives, Mr Piti said. The result is that every consumer will benefit from the company's ability to deliver products and services to every retail channel in Thailand and increase commercial potential through the specific targeting of the last mile in the consumer journey.
"Within these three years, BRF Logistics under the BevChain Logistics brand will carry out a regional penetration strategy to support the market expansion, especially in CLMV countries [Cambodia, Laos, Myanmar, Vietnam]," Mr Piti said. "These countries have significant economic growth and are key markets for Thai products and services. Brands will need logistics services when they want to market in these countries, and our company will be there to support every business size for collective growth."
The strengths of Linfox are its in-depth knowledge and expertise in warehouse management and logistics, honed by their position as the biggest private logistics company in Asia-Pacific.
Linfox operates in over 12 countries with 24,000 employees and 200 warehouses delivering consumer goods to the whole world and working in retail, mining and petrochemical businesses valued at more than US$60 billion (1.97 trillion baht).
Linfox has been operating in Thailand for over 25 years and highlights its understanding of the Thai market.
Boon Rawd's strengths include comprehensive product distribution and services for over 85 years, covering traditional trade, modern trade, supermarkets and convenience stores through more than 200 distribution agents in every province, down to the district level at every store in the country.
The company believes that, when combined with the logistical knowledge of BevChain Logistics, it can provide solutions customised to clients' needs at a much lower cost with better efficiency, and at the same time become more competitive and expand new businesses with clients.
The BevChain Logistics business model in Thailand will focus on delivering the same service standards as in Australia through managing product storage and distribution services.
The difference will be that in Thailand customer penetration will focus on the fast-moving consumer goods segment and drinks companies that are looking to secure the last mile for delivery to consumers.
Boon Rawd said the overall logistics business in Thailand in 2018 is valued at 215 billion baht, segmenting inland logistics at 145-147 billion and the storage business at 75-76 billion baht.
The land logistics business has grown 5.3-7% since last year (worth 137 billion baht) and storage business is up 5.3-7% (71 billion baht) due to economic growth and investments from government and the private sector.
The rise of e-commerce and the offline-to-online platform model have also increased the need for more premium product storage solutions.