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CWT: Staying Rooted To Core Strengths And Challenging

New Frontiers (Part 1)


Corporate Digest | 02 May 2014


Sitting along the stretch of Tanjong Penjuru Road are several large industrial properties of
CWT along with its head office tucked at the end of the street. These properties are just but a
fraction of the portfolio of this leading solutions provider of integrated logistics and supply
chain management.
The man behind the success story, Loi Pok Yen, CWTs chief executive officer, sits across
his desk in his sea-view office as he shares CWTs developments and aspirations for the
coming years in an exclusive interview with Shares I nvestment.
Named EY Entrepreneur of the Year Logistics Winner, Loi has much to be proud of after
taking over the helm of CWT in 2005. Today, CWT has a global presence in around 50
countries and network connectivity to around 200 direct ports and 1,500 inland destinations.
The group also manages over 12 million square feet of global warehouse space.
Setting Apart From Others
Underpinned by its logistics business, its diversified and related business activities, which
include commodity marketing, engineering services and financial services, together forms
CWTs integrated business.
We believe in delivering a holistic approach in terms of servicing our clients, where we
extend beyond just supply chain management, and provide services in information
technology, engineering and financial support for our clients, Loi commented.
Given the wide range of its capabilities, they are able to provide a range of services to suit the
needs of their clients. These efforts help to add value for its customers as it effectively
manage costs and reduce price risks.
Significantly, Loi pointed out that CWTs core strength is in bulk freighting between
countries, which is a unique space in the industry as other common freight services are
usually for smaller packages or parcels.
Silver Lining In Warehousing
A naturally defensive business in nature, Loi highlighted that CWT has been performing well
for its overall logistics business and achieving a healthy growth despite coming off from a
high base from previous years. Particularly, forming one of the companys main competitive
strengths in this area is its abundance in logistics infrastructure, especially on the warehouse
front.
Noting the rising supply of warehouses in Singapore with the expected delivery of a number
of warehouses over the next few years, Loi remains positive on the warehousing market. He
shared that, Even with the supply peaking, rates for warehouses are likely to be flattish as
the long-term nature of contracts in this segment meant that we will not be significantly
impacted by any price changes with contract renewals making up only 15 percent to 20
percent of total contracts per year.
CWTs optimism can be observed as it maintained its focus on expanding warehouse
capacity in Singapore, through the addition of three new assets into its portfolio this year.

Strategically located in Jurong Pier, the 725,000 square-foot Singapore Wine Vault, houses
an arsenal of cold ambient storage equipment, granting it with capabilities in providing cold
chain logistics and distribution services to its customers.
With CWT Jurong East Logistics Centre achieving temporary occupation permit on 3 January
2014, the other two assets also to be completed this year, are the Singapore Wine Vault and
CWT Pandan Logistics Centre.
The Singapore Wine Vault is strategically located in close proximity to Jurong Pier along
Fishery Port Road. The 725,000 square-foot facility houses an arsenal of cold ambient
storage equipment, granting it with capabilities in providing cold chain logistics and
distribution services to its customers. Furthermore, CWTs cold chain logistics processes are
certified with ISO28000 and HACCP, which are certifications for supply chain management
and food standard respectively, ensuring that this facility is able to meet the most stringent
requirements.
The development of CWT Pandan Logistics Centre, with completion date expected to be
around end-2014, is a multi-storey ramp-up logistics facility, which will add 640,000 square-
foot of leasable warehouse space to the companys portfolio.
We believe the new assets would be catalytic to our earnings going forward and expect
CWT Jurong East Logistics Centre to begin contributing to our top and bottom lines this
year, Loi noted. The upcoming two assets have also achieved approximately 75 percent in
pre-committed leases so far, further enhancing our earnings visibility.
Find out more about CWTs commodities trading portfolio and business outlook here.
This is a co-written article of Shares Investment, which lays out the analytical ideas and thoughts of the authors,
who are well versed in investments and market concepts.

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