APL Logistics to set up Sri Lanka hub

APL Logistics to set up Sri Lanka hub

HONG KONG — APL Logistics will establish a regional consolidation hub for South Asia in Sri Lanka by the second half of 2015, the Singapore-based forwarder has announced.

In its first major announcement since being acquired by Kintetsu World World Express (KWE) for a premium $1.2 million, APL Logistics said it has signed an agreement with the Board of Investment of Sri Lanka (BOI) that will allow its subsidiary in the island nation to set up a hub in the Katunayake Export Processing Zone.

APL Logistics Lanka (Private) Ltd., has been granted a lease on the land and premises located in the zone where it will operate container freight stations, warehouses and other logistics-related businesses, the forwarder said in a statement.

Neptune Orient Lines last month sold APL Logistics to Kintetsu World Express in a stunning deal that gave the Singapore-listed group a net gain of more than $900 million. The sale will be completed by June and is subject to shareholder approval.

“Sri Lanka has been rapidly growing in importance as a regional sourcing base for global retail customers,” said Beat Simon, APL Logistics president said in a statement. APL Logistics has an extensive distribution and transportation network in the country.

“The country’s infrastructure development to improve the capacity and efficiency of its existing ports has been progressing at a tremendous pace. With the set-up of APL Logistics’ regional consolidation hub here, we are well-positioned to scale up our operations and meet growing customer demand for reliable regional supply chain solutions in South Asia.”

The next immediate phase of the plan will be focused on the reconstruction of the existing facility on the site into a new facility. It will offer 100,000 square feet of bonded warehousing space, compliant with international standards for security and safety and with built-in environmentally-friendly features.

This latest facility in Colombo will complement APL Logistics’ existing cargo hubs in North and Southeast Asia, the logistics company said. It will connect with as many as 18 container freight stations located within APL Logistics’ South Asia network, providing services like multi-country consolidation and other value-added and pre-retail services tailored to the needs of APL Logistics’ global and regional customer base.  

Japanese forwarder KWE has signalled its intention to expand APL Logistics’ network. “Since 2013, we have laid out a strategy to strengthen our international presence especially in the U.S. and Asia. This transaction fits right into our strategy,” said Satoshi Ishizaki, group president and CEO of Kintetsu.

The headquarters of APL Logistics will remain in Singapore and the company will be run as a separate unit.

APL Logistics has grown nearly five times since being incorporated in 2000 and made $1.7 billion in revenue in 2014. Its primary focus is on automotive, consumer, retail and industrial verticals.

Contact Greg Knowler at gknowler@joc.com and follow him on Twitter: @greg_knowler.