JWD moves a step closer to take up to 20% effective shares in ESCO over 2 stages In partnership with PSA, world’s largest terminal operator by weighted equity throughput To become major international terminal operator at Laem Chabang
Bolstering capability in multimodal transportation services
JWD InfoLogistics Public Company Limited (JWD) splurged on a major investment this year by buying up to 20-percent effective shares in ESCO over 2 stages. ESCO is a container terminal and supply chain operator in Thailand, of which one of the shareholders is PSA, the world’s largest terminal operator by weighted equity throughput. This has allowed JWD to become a major international container terminal operator at the Laem Chabang Deep-Sea Port and an inland container depot (ICD) service provider at Ladkrabang, to increase the capability for multimodal transportation services, by land, sea and rail.
Mr. Charvanin Bunditkitsada, Chairman of the Executive Committee and CEO of JWD InfoLogistics Public Company Limited (JWD), ASEAN’s recognized expert in logistics and supply chain, said the Company has set the policy to continuously invest in accordance with the 5-year strategic plan to increase the capability for multimodal transportation services. On July 23, 2021, the Company’s Board of Directors gave the approval for JWD Transport (Thailand) Company Limited, a subsidiary of JWD, to buy up to 20 percent effective shares in Eastern Sea Laem Chabang Terminal (ESCO), a major international container terminal operator at Laem Chabang Deep-sea Port in Chonburi Province and an inland container depot (ICD) service provider at Ladkrabang. JWD’s share acquisition will result in JWD becoming a business partner of PSA, who manages and operates Singapore’s world-class transshipment hub, as PSA is also a shareholder in ESCO.
“This significant investment is considered to be a major undertaking this year funded by the recent issuance of debenture as well as from operating cash flow. Initially, JWD Transport will take 15-percent effective share in ESCO and possibly increasing to 20 percent within the next 6-12 months,” Mr. Charvanin said.
Currently, ESCO is the operator of international container terminals at three locations within Laem Chabang Deep-Sea Port, namely, (1) ESCO (B3) where ESCO directly develops and manages through a concession from the Port Authority of Thailand (PAT), (2) LCB1 (B1) terminal, and (3) LCMT (A0) terminal where ESCO partakes as a shareholder in the company that has been awarded the concession to operate both terminals. In 2020, all three international cargo ports handled around 2 million TEUs of containers, amounting to about 20 percent of the total containers that were processed through Laem Chabang Deep-Sea Port in the past year. The demand for services at the international container terminals are expected to grow constantly as a result of the recovery of the world economy following the improvement in the COVID-19 pandemic situation in the USA and Europe.
At the same time, ESCO is also one of 6 inland container depot (ICD) service providers at Ladkrabang to handle containers for various shipping lines that are not located close to Laem Chabang Port, to help reduce lead time and transportation cost. The revenue is derived from the operation of the container yard, import and export warehouses along with Customs clearance services, as well as the furbishment and transportation of containers through land and rail. This business will help to increase JWD’s cargo transportation business through the recommendation to the customers who use the ICD services at Ladkrabang.
JWD Chairman of the Executive Committee and CEO further commented that the Company is expected to start realizing profit consolidation from the investment in ESCO in October 2021 at the latest.
The investment in ESCO is the expansion of JWD’s business towards fully becoming a major international container terminal operator at the Laem Chabang Deep-Sea Port, as currently the Company has the right to operate Coastal Port A within Laem Chabang awarded by the PAT and is the operator of the MIPEC container port in Hai Phong, Vietnam through the shareholding in Transimex, which is a major logistics service provider in Vietnam. This foray into the international container terminal services will help to increase the capability of JWD to more effectively provide multimodal transportation logistics that will have connectivity with various modes of transportation such as road, rail and sea. At the same time, this move will help to expand the customer base from the international container terminal and the ICD at Ladkrabang for the use of the Company’s integrated logistics services.
“Presently, JWD is already providing multimodal transportation services, such as the transportation and transfer of general cargo, vehicles, hazardous cargo and chemicals, the transportation of cargo from Bangkok to international container terminal at Laem Chabang, the lifting and transport of containers by rail from the Northeast, as well as from the industries in the Eastern Economic Community (EEC), Rayong Province, to Laem Chabang Port. Therefore, this investment will help to expand the customer base as well as the transportation services, both the Bangkok-to-Laem Chabang, and ICD Ladkrabang-to-Laem Chabang services. Also significant is the provision for using cargo traffic data at Laem Chabang international ports to conduct analysis in order to further develop our logistics capabilities,” Mr. Charvanin concluded.