New warehouse to drive KGW Group’s expansion

KUALA LUMPUR: Logistics service provider KGW Group Bhd’s relocation to its new warehouse in Glenmarie, Shah Alam, will enable the group to focus on its business expansion strategies.

Managing director Datuk Roger Wong said relocating to the two-storey warehouse will enable the group to centralise its core business while expanding the headcount, in particular for the sales and marketing team.

“This additional space is capable of growing our operations and team to support the expanding business.

“We will also look into the area of international business development,” he said at a virtual press conference after the group’s listing on the ACE Market of Bursa Malaysia yesterday.

The group, which offers ocean freight, air freight and freight forwarding services, opened at 23 sen a share, a premium of 9.5% over the initial public offering (IPO) price of 21 sen a share.

At 5pm yesterday, the stock closed up two sen to 23 sen. It was the second most actively traded stock with 181 million shares changing hands.

The group raised a total of RM16.73mil from the IPO, of which RM10mil will be used to repay bank borrowings for the purchase of the warehouse.

On expansion plans, Wong said the group will continue to focus on the warehousing and distribution of healthcare products, including medical devices.

“The office previously could not cater for this, so with the new warehouse, we will look to expand this segment as well.

“The aim here is to target local businesses to help streamline their operations and reduce their costs by eliminating the need for their own warehouse,” he said.

Wong said another strategy that the group has is to develop its eCommerce solution so that it can assist Malaysian businesses in expanding globally.

“We are looking to provide a solution for businesses to sell to the consumers directly. We will initially focus on the US market through platforms like eBay and Amazon. The United States is our main market at the moment,” Wong explained.

Despite some uncertainty in the United States and Europe, Wong is confident about venturing into these markets.

He said the solution will include the setting up of business consultancy on management issues as well as logistics.

“Moving forward, we will look into other opportunities and markets as we continue to grow,” he said.

Wong said the group will remain asset-light as its bigger focus will be more towards people-centric.

“Our goal is to seek out the needs of our customers and solve them. We remain committed to the needs of our clients,” he said.

Meanwhile, Wong said the logistics industry in Malaysia is huge and has plenty of potential and opportunities.

He said that in 2022, the logistics industry accounted for 3.5% of the country’s gross domestic product that was valued at RM62.2bil.

“In 2023, the industry is expected to reach RM66.25bil. It is a big number but we see plenty of room to grow as a company and as a country in this sector.

“Our business strategies and plans are geared towards enhancing this growth,” he added.