We are gradually entering into a post-COVID-19 pandemic that will be new normal to our operating environment, behavioural changes at both the households and businesses levels and supply chain disruptions that will lead to new ways of getting resources, the onslaught of new entrants with huge capital and resources, the unfettered competition of foreign-owned entities in the domestic markets that skewed the level playing field, new rules and regulations that might require rethinking, and in many instances the way we work will forever change. All these forces of change will force us to relook anew at the way we do business.
At the macro level, the Malaysian economy is expected to improve, given the overall growth of the global economy. While we had seen GDP contracted by 5.6% in 2020, the GDP growth of 3.1% in 2021 showed signs of economic recovery. The GDP projection of 5.75% growth for 2022 bodes well for the industry.
Like any other industry, the courier and logistics sector was also impacted by the pandemic. Continued disruption in global supply chains resulted in escalating freight costs and delays in the movement and goods across all industries. But the prolonged lockdowns had also accelerated the trends already in place. For example, the latent demand for e-commerce from households and businesses plans to adopt online platforms to cater to new consumers’ needs, had coincided during the lockdown.
An extensive study jointly conducted by Bain & Company and Facebook reported that South East Asia’s migration from offline to online economy in 2020 had accelerated beyond initial projections. Consumers in the emerging region were more open to a broader range of products that could be purchased online. Even with the resumption of the in-person shopping experience, the study found that 75% of time spent on online shopping is expected to remain. Most consumers planned to increase or maintain online spending on groceries, self-care, and goods in other categories.
Faster delivery was cited as one of the three main reasons for consumers’ decision making, after product quality and better pricing. These findings strengthen the argument that the courier and logistics industry will thrive provided that the industry can provide cost-effective, efficient and reliable services, a clarion call for top-notch logistics and logistics services.
Taking recognizance of the external environment besieging us, we have embarked on a journey to reinvent ourselves with GDEX 2.0, a strategy to become an agile, forward-thinking and consumer-centric organisation. This transformation will entail continuously improving our consumer experiences, relooking at human resource capital and development, enhancing automation, and making strategic investments that will enhance synergistic benefits and expanding the company’s sources of income and promoting collaboration with business partners. We will continue to harness the immense potential of technology, by utilising advanced digital and platform initiatives as part of our ongoing rejuvenation process.
The Group’s name change from GD Express Carrier Berhad to GDEX Berhad (“GDEX”) initiated in October 2020 reflected this new journey to become a technology-driven company. Barring any unforeseen circumstances, GDEX will strengthen and grow on the back of our position as a strong courier and logistics company in South East Asia. However, the success of this transformation will depend on our ability to enhance the capability and capacity of our people, processes, and agility.
Alongside our ongoing transformation process, GDEX will incorporate practices and implement ESG principles as our core values. It is our contribution as a responsible corporate citizen. Our efforts and emphasis on these areas were recognised as the company has been included as a member of the FTSE4Good Bursa Malaysia Index since 2016. This inclusion among the top 200 Malaysian stocks in the FTSE Bursa Malaysia EMAS Index recognises that our corporate responsibility practices are consistent with FTSE’s global ESG model.
In August 2021, GDEX successfully implemented the ISO 37001:2016 Anti-Bribery Management System, which is designed to prevent, detect, and respond to bribery incidences. It is a system that guides establishing, implementing, maintaining and improving anti-bribery policies and practices. With its implementation, it is envisioned that this certification would enhance stakeholders’ confidence when conducting business transactions with GDEX.
GDEX will continue to embrace diversity, and with the appointment of Puan Nuraini Binti Ismail as Independent Non-Executive Director on 1 January 2022, the recommended practice of Bursa Malaysia-listed entities to have at least 30% representation of women on the Board of Directors is now a reality.
GDEX has also embarked on numerous initiatives relating to carbon neutrality by adopting renewable energy across the Group. These include enforcing mandatory clean fuel usage for vehicles in our logistics fleet, introducing all-electric scooters for sustainable last-mile deliveries under our ‘Go Green’ initiatives since November 2021, and implementing solar as a source of
energy. We are determined to implement initiatives that enhance sustainability and will embark on developing a framework and monitoring system to identify, implement and generate key performance indicators that track meaningful progress on this front.
Malaysia’s logistics and logistics services sector landscape is expected to be characterised by fierce competition that might further fragment an already fragmented industry. If not well regulated and supervised, a crowded market of more than 100 licensees will lead to an uneven playing field, value-destroying price undercutting practices and poor service quality to consumers. Failure to address these issues will cause domestic-based companies to face existential threats as new foreign-based companies that are well capitalised, seek to claim their share of the burgeoning domestic e-commerce market by whatever means.
Therefore, to survive and thrive under this complex and unfettered competition, the company’s management and the Board will continually formulate new strategies to ensure growth, competitiveness and survival.
On behalf of the Board, I would like to express my gratitude to the management and all employees for their efforts and perseverance in these difficult times amidst the challenges posed by the COVID-19 pandemic and the ever-changing industry landscape.
I like to convey our appreciation and thanks to our customers, shareholders, business associates, and regulatory bodies for their continued support. We look forward to delivering sustainable value for all our stakeholders as we enter the post-COVID-19 era.
I would like to thank Mr. Shuji Yamauchi for his contributions throughout the duration of his tenure on the Board. Mr. Shuji resigned from his position as Non-Independent Non-Executive Director on 1 April 2021 following the reorganisation of the Yamato Group. At the same time, I have the pleasure of welcoming Mr. Hiroshi Etani, who was appointed as a Non-Independent Non-Executive Director.
Our appreciation goes to Mr. Richard Lai for his contributions to the company and we welcome his successor, Mr. Vincent Yik, to the Board. I would also like to place on record our appreciation to Encik Adi Arman Bin Abu Osman, who has resigned from the Board, for his many contributions in the past.
I would like to welcome Dato’ Azman Bin Mahmud, who has past experience in industrial development and private investment facilitation, appointed as Independent Non-Executive Director on 1 June 2021. I would also like to welcome Puan Nuraini Binti Ismail, who has extensive experience in finance, treasury, and accounting, to the Board on 1 January 2022.
As we move forward, I am confident that GDEX will become a stronger company that will fulfill the aspirations of our stakeholders.
Tan Sri Muhammad bin Ibrahim
Annual Report 2022