Bangkok--6 Nov--KASIKORNBANK
With support from K-Value Chain Solutions, SCG Logistics Management Co., Ltd. is expanding its network, lowering transport costs domestically and internationally in multiple modes making it a future AEC logistics center. KBank is helping SCG Logistics to achieve its goal of realizing revenues of 20 billion Baht within three years.
According to President of SCG Distribution Mr. Kajohndet Sangsuban , logistics have always been a major component of the cost of products, and competitiveness can be significantly improved through more efficient logistics management, especially given ever-rising fuel costs. SCG sees logistics as a high growth potential business, and has set a target of 20 billion Baht in revenues by 2015. Smaller logistics companies in Thailand are more and more integrating their services, cooperating for development, and exchanging information in order to achieve business objectives.
According to Managing Director of SCG Logistics Management Co., Ltd, SCG Distribution Mr. Nithi Pattarchok , logistic costs in Thailand remain high relatively to more developed countries and seeking greater efficiency will cut costs for Thai businesses, increasing competitiveness internationally. SCG Logistics is thus working with KBank’s K-Value Chain Solutions in seeking to enhance logistics services overall, both domestically and internationally, for the national network of logistic businesses. With the arrival of AEC in 2015, Thailand will become a geographic center for logistics among ASEAN, China and India.
In preparation for opportunities and challenges, the following strategies and objectives have been set to ensure service expansion and growth of the business.
Transport vehicles sufficient for customer needs will be available through KBank’s leasing service, increasing the fleet by 1,000 vehicles. A procurement center for purchase of transport and logistics equipment will be set up, and multi-purpose transport vehicles developed for receiving goods from other countries.
Personnel development for staff, logistics administrators and drivers, with training in logistics for the AEC. Financial knowledge will also be offered supporting sustainable growth.
Technology will be implemented, including ordering systems, transport management systems, inventory management systems, and GPS integrated with the network for tracing throughout the system.
With these initiatives, SCG Logistics Management has established a goal under this cooperation of doubling revenues from the current 10 billion Baht a year to 20 billion by 2015.
According to KASIKORNBANK Senior Executive Vice President Mr. Krisada Lamsam, KBank and SCG Logistics Management created K-Value Chain Solutions to serve customers and their networks with total solutions throughout the value chain, including financial products, services and knowledge, satisfying the needs of customers and their trading partners. The following solutions are included.
Financial Solutions, with revolving credit for business liquidity, will cut funding costs by as much as 26 percent; vehicle leasing for transportation contractors in the SCG value chain will boost the number of vehicles to meet demand. A vehicle leasing target is set at 4.6 billion Baht for 2,000 vehicles.
Payment Solutions, with online payment services for SCG representatives via the eSCF system, enhancing operating efficiency with reports and verification of all procedures and reducing work time by at least one hour per day. Transportation costs may also be paid via P-Card for cashless convenience and safety.
Risk Management Solutions, with a number of insurance products facilitating trade credit insurance targeting coverage of 12 billion Baht in sales within three years. Currently, KBank is providing insurance for SCG and its representatives covering more than nine billion Baht in sales. KBank is the primary provider of this service.
Non-Financial Solutions include seminars conveying financial management knowledge for transportation contractors, staff members and SCG representatives for efficient business development and cost reduction.
According to Mr. Krisada, KBank is the first bank in Thailand to offer a service like K-Value Chain Solutions aiming to fully satisfy the needs of large corporations with long and complicated value chains. Such corporations represent combined business value of more than 13 trillion Baht and participate in seven industries: petroleum and petrochemical, retail-wholesale, construction materials, transportation, food and beverage, automotive, and hospitals and medical equipment. KBank is a major provider throughout the value chain and is targeting an increased market share of 30%, up from the current 20%, by 2016.