Sankyu to build logistics center in Malaysian free zone to serve Asia

05, Aug. 2020

Photo by chuttersnap on Unsplash
Photo by chuttersnap on Unsplash

KUALA LUMPUR, NNA - Japan’s Sankyu Inc. will set up a big logistics center in a free trade zone (FTZ) in Malaysia's Port Klang next year.

Scheduled to be operational on March 1, 2021, the 20,000-square-meter Asia Hub Center is designed to provide Japanese businesses quicker access to the surrounding region or anywhere in Asia.

The move comes at a time when many Japanese companies are moving production to Southeast Asia to strengthen supply chains to avoid over-reliance on China following disruptions caused by lockdowns to curb the outbreak of the novel coronavirus.

Sankyu, which already has an established presence in Malaysia, aims to rake in 2.5 billion yen ($24 million) in sales from the distribution center in the first three years. It seeks to obtain contracts with about 10 Japanese companies, a Sankyu spokesman told NNA.

Sankyu and client companies could take advantage of the free zone’s tax and custom duty exemptions to cut costs. Also, its prime location on the west coast facing the Malacca Straits will shorten forwarding time significantly.

Non-residential companies could also store goods at the site before exporting them to neighboring countries, said Sankyu in its press statement.

In June, Sankyu set up a transshipment staged post (TSP) in Port Klang to allow client companies to store containers without having to unload their cargo. The Sankyu center will allow flexible shipment options. Companies could decide on their final destination after storing them there.

Sankyu, which has recognized the huge growth potential around Southeast Asia for decades, operates about 40 distribution centers in Thailand, Vietnam, Singapore, Indonesia, Malaysia and also India

In the first half of 2020, Sankyu group’s sales dropped 2.5 percent to 137.5 billion yen while net profit fell 25.1 percent to 4.8 billion yen year-on-year. While the COVID-19 pandemic had impacted on its performance, Sankyu also noted a surge in the transportation of emergency goods in Southeast Asia.

Meanwhile, the Malaysian government has decided to expand the infrastructure capacity at Port Klang to boost productivity and trade.