Group Chief Executive Officer’s Statement
The events unfolding over the last two years were ‘once in a lifetime occurrences’. We were never prepared for a contagious disease of such magnitude. Nevertheless, the GDEX team was agile enough in managing the downsides arising from the COVID-19 pandemic.
As global logistics was among the handful of industries whose operations were deemed essential services, the domestic industry saw many entrants, given the attractive business propositions and low barriers to entry. This made the already-crowded market even more so, with intense price competition and at times to the detriment of quality service.
Courier companies, particularly domestic players, face an existential threat due to increased operating costs, such as higher expenditure for enhanced safety measures and additional compliance and regulation costs, on top of more stringent risk mitigation plans for business continuity.
Even as we operate in an extremely challenging landscape, I am pleased that we are mindful of our responsibility to our stakeholders: to add value to stakeholders’ holdings and expectations.
In this respect, we had already begun putting the building blocks for more excellent resiliency into our business model. The change of name to GDEX Berhad is a reflection of this effort.
We had introduced more digitalisation in our operations and processes, which was timely as it enabled closer interactions, deepened bonds, and encouraged repeat transactions with our clientele base during the pandemic.
We continue to reinforce our position as a trusted logistics provider to those seeking growth in a dynamic business environment at the regional level.
Going forward, we are embarking on opportunistic investments beyond logistics to harness next-generation technologies to enhance the company’s resiliency as we continue our journey to become a well-diversified and sustainable entity with multiple growth businesses.
Our journey into the future is reflected in our strategic GDEX 2.0 roadmap that incorporated a holistic approach to our business through the five pillars of our corporate qualities; people, process, platform, product, and speed.
Talent development is key to achieving our business goals, and we continuously strive to hire and nurture motivated individuals to join and grow with us in our journey. As our operations expanded and resources optimised, our workforce was reduced in FPE2021, with a total manpower count at 4,244 from 4,308 previously.
Additionally, we provide our workforce with substantial training opportunities to keep abreast of industry practices and support their long-term career growth. Our workforce underwent 41,867 manhours of training from 25,495 manhours in the previous year.
Going forward, we have set plans in place to attract more specialists from diverse domains, ranging from human resources to technology workersCEO Review 1 and corporate strategists, towards realising GDEX 2.0.
We will continue to identify and develop talents to lead internal projects and pursue innovations. We strive to foster an environment where our workforce is aligned to the company’s true north, with empowerment being the main theme in bringing value to our stakeholders. With a solid foundational belief, we can achieve new heights together.
GDEX aims to increase efficiency through process automation and embrace digitalisation across our operations.
The Group’s new sorting hub in Petaling Jaya, Selangor, is expected to be operational in December 2022. The new facility would double our current sorting capacity from 175,000 parcels/day to 350,000 parcels/day, significantly boosting operational productivity and enhancing workforce safety with increased automation.
We are also reviewing existing processes to embark on an organisation-wide digitalisation to drive efficiency and capabilities to enable GDEX to deliver an excellent customer experience. This ongoing initiative will involve implementing new systems and technology solutions to enable seamless integration with our customers, where appropriate.
Our in-house online shipping platform, myGDEX portal, has increased adoption among enterprise and e-commerce clients in financial period ended 2021 (“FPE2021”).
We intend to roll out myGDEX for the regional markets, starting from Singapore and eventually Indonesia and Vietnam, for customers to harness the benefits of seamless integration and higher efficiency.
In addition, the myGDEX Prime platform gained traction during the prolonged lockdowns, providing a seamless shipping experience to our corporate customers, which enhanced the efficiencies of their business operations. The myGDEX Prime platform represents our continued efforts to bring our customers a more comprehensive range of digital solutions.
myGDEX and myGDEX Prime showcases the beneficial use of technology for Business-to-Business and Business-to-Consumer segments, bringing us close- to-customers through deeper integration with their businesses or daily activities. It has also contributed to increased transparency in internal and external processes with our customers, making mutual collaboration possible.
Furthermore, we introduced Beeline in March 2021, a social commerce platform with an automated order management system for selling through social media platforms, websites, and other channels. Through Beeline, Small and Medium Enterprises (SMEs) can immediately catapult their businesses to obtain omnichannel presence and enjoy the convenience of automated order collection and payments, customer support, and seamless integration with our delivery solutions.
In 2022, we aim to introduce more new solutions that enable our customers to achieve greater predictability and reliability in last-mile capabilities and innovative products such as insurance and products that address wider pain points. This will also help us grow our reach among SMEs.
We strive to continuously enhance the comprehensiveness of our domestic and international express carrier solutions and logistics and warehousing solutions to enable our customers’ leverage on our wider, faster and better reach. These expansions would be sourced through in-house innovations, collaborations, and strategic interests.
These efforts allow us to strengthen our value proposition in being a more holistic, one-stop solutions provider backed by reliable and extensive infrastructure that fulfils demand seven days a week.
In the fast-evolving landscape of converging businesses, we aim to be agile to adapt and execute our business strategies at speed, which will be the defining factor towards successful transformation. Speed is embedded across our entire operations, such as work processes, development of new products and platforms, and customer service, supported by the extensive use of technology and automation.
Furthermore, speed and reliability of delivery are the priority demands of businesses and consumers alike and are the hallmarks of a successful logistics and courier services provider. This necessitates continuous expansion in our presence and infrastructure upgrades. In FPE2021, our customer access points, comprising branches, agents, and Point of Presence grew threefold from 450 outlets in FY2020.
We also expanded our logistics fleet and have 1,414 vehicles in service in FPE2021 from 1,277 vehicles in the previous year. The additional vehicles have increased our carrying capacity to 4,442 tonnes per year from 3,905 tonnes previously.
GDEX has set sights on being a regional logistics provider through our expanding presence across Malaysia, Singapore, Indonesia, and Vietnam.
In FPE2021, Noi Bai Express and Trading Joint Stock Company (“NETCO”), our 50%-owned subsidiary in Vietnam, registered lower revenue and business activities resulting from full lockdowns in several regions due to the COVID-19 pandemic.
Nevertheless, we look forward to better performance as the overall environment improves, alongside continued new customer acquisition and implementation of strategic operational enhancements.
Meanwhile, PT Satria Antaran Prima Tbk (SAPX), our investment in Indonesia in which we hold a 44.5% associate stake, maintained largely resilient in FPE2021, benefiting from new customer acquisitions and stricter cost controls to maintain prudent amidst the pandemic.
Going forward, we will leverage our specialist teams internally to drive collaboration across our regional platform. This will involve creating new logistics routes and securing clientele for importation services, complementing the existing export-oriented services offered by our regional business units, towards generating a more holistic and regionally integrated platform.
Growth in the Digital Era
GDEX’s growth focus is on enhancing our digital and technological competencies, which will form the core of our new products and business segments.
The COVID-19 pandemic has brought greater focus on the importance of business resiliency and the need to think out of the box to develop innovative solutions. In this regard, the partnership between public and private sectors has become imperative, and GDEX will step up collaboration and partnership efforts in our drive towards bringing better solutions to the marketplace. This understanding of the dynamics will shape our pursuits as we move forward.
We will continue to develop new products aimed at providing comprehensive digital solutions for customers and excellence in service quality in delivering our logistics services. Our expertise and close contact with customers, and our penchant for adopting next-generation technologies provide a good base for our new products to be customer-centric and enjoy market acceptance.
Additionally, we aim to build new business segments that will generate additional revenue streams and profit centres by leveraging our supply chain competencies and extensive infrastructure to create a more resilient platform that will drive sustainable growth.
These growth initiatives will also be complemented by strategic investments into strengthening our core business and expansion of our business and investments portfolio.
Certification & Tech Incentive
As part of our continued implementation of and commitment to corporate governance best practices across our organisation, GDEX obtained the ISO 37001:2016 Anti-Bribery Management Systems (ABMS) certification from SIRIM QAS International Sdn Bhd in FPE2021. We are also working towards being certified to ISO 27001 standard for Information Security Management Systems (ISMS).
In addition, the Group’s wholly-owned subsidiary GD Express Sdn Bhd, had on 10 November 2020 received approval from the Malaysian Investment Development Authority (MIDA) for a second round of integrated logistics services (ILS) tax incentive. GDSB was granted pioneer status and will be eligible for tax exemption of up to 70% on its statutory income for a period of five years.
In our pursuits to reinforce our leading provider of logistics and courier services in the region, we recognise the importance of our role in being dedicated to developing resilient communities and safeguarding the health of the environment.
As we grow, we will continue to identify ways to reduce our environmental footprint, set benchmarks in governance standards, and create value for our stakeholders sustainably.
More details on our efforts in creating a sustainable business and a greener world are outlined in our Corporate Sustainability Report on page 36.
The metanarrative of our renewal is captured through our vision of transformation into GDEX 2.0, as we become a technology-driven company with a comprehensive regional logistics ecosystem. We are confident that the future holds promising growth opportunities for our Group as we bring innovations through collaborative efforts with stakeholders, collaborating in shaping the company’s future.
We are grateful for all the contributions to GDEX’s successes to date by all parties involved, and all efforts, no matter how small, are deeply valued. Our appreciation goes first and foremost to our employees for their relentless efforts and the Board and management of GDEX, our business partners, and various government bodies and organisations.
I look forward to a new chapter of growth for GDEX as we commence the GDEX 2.0 journey and look to scale to greater heights in the region together with our stakeholders and business partners.
Teong Teck Lean
Managing Director and Group Chief Executive Officer
Annual Report 2022