Leo Global Logistics (LEO) revealed its 2023 strategic plan under the concept of ‘365° Collaboration’, aiming to become a ‘Growth Stock’ company in the freight and logistics segment. The goal is to achieve a gross profit margin growth of 15-20%. Mr. Kettivit Sittisoontornwong, CEO of Leo Global Logistics (LEO), stated that LEO is ready to expand the business in all dimensions, both in the logistics industry and other industries. It will escalate the negotiations and close deals on joint ventures as well as mergers and acquisitions (M&A) in domestic and foreign businesses, including driving the growth of rail transportation service and procurement business for shipment to China, which is expected to become one of the primary sources of income for the company.
The group is also preparing to establish a sustainable transport and logistics company for added value and expand the value chain for LEO’s logistics services. The company aims to reach THB 500 – 600M of income for all new business groups within three years.
Mr. Sittisoontornwong revealed LEO’s 2023 goal to become a fully integrated logistics service provider with sustainable and exponential growth. It is focusing the investment in new non-freight businesses with a gross profit of more than 40-45%, such as self-storage, container depots, warehouses and logistics centers, and temperature-controlled logistics operations. It will also cooperate with business partners to develop new projects, such as opening a third Self Storage branch and developing warehouse and logistics center projects with SK Asset Management.
Furthermore, the company aims to develop a temperature-controlled logistics (cold chain) business in collaboration with Sahathai Terminal, including opening a fourth self-storage center and a second container depot. The combined income from the new companies and business expansion will make the revenue of non-freight businesses grow leaps and bounds over the next two to three years.
In addition, LEO is developing and marketing an integrated Thailand-China rail freight service in collaboration with Baothai Index Associates and Sri Trang Logistics under a new company name, ‘LaneXang Express’. It is also studying the possibility of setting up another joint venture to invest in a temperature-controlled transportation system to China by rail to support land transportation of fruit exports from Thailand to China. The current export volume is 420,000 tons per year, more than THB 3.3M in value. The new system will allow LEO to provide rail transportation services to China for the 2023 export season, with an edge in competitive prices compared to other operators.
In terms of business outside the logistics industry, LEO will soon expand the hemp and cannabis business with Sukkruthai Community Enterprise and Canbiz Co., Ltd. into a new business, including developing an agency business to buy products from Thailand and send them to the e-commerce platform of China Post and Tengjin under the name ‘Leo Sourcing and Supply Chain’. Currently, they receive many fruit product orders, especially Durian. LEO aims for the revenue from business sectors unrelated to transportation and businesses outside the logistics sector to supplement the freight income that began to decline following industry trends.
LEO continues negotiating business acquisitions with domestic and international partners, including companies in Cambodia, Canada, Belgium, Singapore, and the People’s Republic of China. The result is expected to be finalized by the third quarter of 2023. These M&A projects will also support the company’s growth.
“Creating business alliances with the concept of 365° Collaboration will help LEO become a growth stock company with exceptional progress by bringing the strengths of allies to develop businesses and synergize our capabilities together,” said Mr. Sittisoontornwong.
Finally, LEO, as an End-to-End Logistics Services Provider, has plans to develop a Green Logistics business together with partners. The new company will provide environmentally friendly transportation and distribution services, reduce the use of energy that pollutes or generates waste, focus on reducing air pollution from carbon dioxide, and plant trees to increase green areas to turn into Carbon Credits for customers, which will help expand trade opportunities for customers.
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