Logistic giants enjoying high growth<\/p>\n
Rendi A. Witular, The Jakarta Post, Jakarta<\/p>\n
Foreign giant distribution companies are enjoying high revenue
\ngrowth here as more companies have started to outsource their
\nwarehousing and distribution affairs to these firms.<\/p>\n
Industry experts said that the outsourcing trend started in
\nthe late 1990s as many companies wanted to concentrate more on
\ntheir core activities.<\/p>\n
"Since the Asian crisis in 1997 there has been an increase in
\nthe number of companies looking to outsource their distribution
\nand supply management for efficiency," said Colin Moran, country
\ngeneral manager of PT TNT Logistik Indonesia, which, last year,
\nenjoyed a 90 percent growth in revenue.<\/p>\n
He expected TNT to enjoy a further hefty growth of around 50
\npercent this year.<\/p>\n
TNT Logistik Indonesia, which is the local subsidiary of
\nHolland-based TNT Group Post N.V., currently provides
\ndistribution services such as import clearance, inventory and
\nwarehouse management, export dispatch, provision and management
\nof materials and transport system design.<\/p>\n
The company started its distribution business in 1995.<\/p>\n
Currently, the company has over 4,000 active customers in the
\ncountry and 11 major distribution contracts. Several of its major
\ncustomers are PT Tigaraksa, P&G, BASF, Shell, Nestle and PENI.<\/p>\n
Another giant distribution company enjoying a boom in business
\nhere is DHL, with its local partner PT Birotika Semesta.<\/p>\n
Company senior technical advisor Alan Cassels said, during a
\nrecent media conference, that revenue growth this year was
\nprojected to grow at 70 percent to 80 percent.<\/p>\n
DHL entered the country in 1976. One of its major customers is
\nCISCO.<\/p>\n
Industry players said Indonesian manufacturing companies still
\nlagged behind their regional peers in outsourcing their
\nwarehousing and distribution management to distribution
\nspecialists.<\/p>\n
But they acknowledged that the growth potential in the
\ndistribution business here was huge.<\/p>\n
According to Moran, only 1 percent to 2 percent of
\nmanufacturing firms here already use distribution companies to
\nhandle their warehousing and distribution affairs.<\/p>\n
"Many companies here are too scared to let go of the
\ndistribution side of their business as they don't think anyone
\nelse could manage it better than they do. But in the majority of
\ncases they are mistaken, as we have proved to many customers,"
\nsaid Moran.<\/p>\n
Despite the huge market opportunity, distribution companies
\nsaid that competition was already getting stiff, as four
\ninternational giants had already entered the country.<\/p>\n
The other two are U.S.-based United Parcel Service (UPS), and
\nFederal Express (FedEx).<\/p>\n
UPS entered the country in 1988, with its local partner PT
\nCardig Air, and Fedex in 1985, with its local partner PT Repex
\nPerdana International.<\/p>\n
Cassels said that the tough competition had prompted DHL to
\nfocus on a specific market segment.<\/p>\n
"We are concentrating on value-added distribution, usually
\nvital spare parts with a high impact on business, typically for
\nhi-tech clients. Other players mostly focus on delivering
\nconsumer goods," said Cassels.<\/p>\n
TNT is also targeting a specific market segment, focusing more
\non fast-moving consumer goods, petrochemicals, automotive items,
\nplus electronic and pharmaceutical goods.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/logistic-giants-enjoying-high-growth-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}