Leong Chee Tong Executive Director and Chief Executive Officer

In the year under review, the management has identified the areas on which to focus its attention in line with its long term strategy.

First is the nurturing of a talent pool. The consistent expansion of the Group has created many job openings in supervisory, executive and managerial positions, thus the need to constantly seek, train and groom employees with the right aptitude to fill these positions. The Group has implemented various programmes and re-organised its effort to achieve this objective.

Another is infrastructure development. We have upgraded all regional offices to improve their handling capabilities. We have also finalized plans to upgrade and expand the parcel sort conveyor system.

In anticipation of growing demand for integrated logistics service, the Group has decided to boost its warehousing facilities and develop its freight handling resources to complement its express delivery service.

One more area of focus is the collaboration with regional players in express deliveries into Malaysia and Singapore. While there is keener competition, there is also room for co-operation.

During the year, the Courier Division has set up an Operation Command Centre to command and control courier activities. It has also established a Shipment Monitoring Centre, Planning and Coordinating Centre and Operation Support Centre. These new setups served to improve our service quality.

In the effective functioning of our courier network, our Agents play an important role in providing good service coverage in remote destinations. To ensure conformity of operating procedures and service standards, we have embarked on Agents training and reinforced the Agents Standard Operating Guidelines.

The year also marked our foray into warehousing and freight forwarding. The strategic move would no doubt affect the Group's bottom line in its early stage but is essential to propel the Group to become a total logistics solution provider in the long run. During the year, the Group has leased a 59,886 square feet warehouse and started developing its freight clearance capabilities.

The recent entry of various regional giants into Malaysia and Singapore would inevitably intensify competition in the express carrier industry. But it has also provided opportunities for collaboration with these new foreign players in handling their "last-mile" deliveries in their so called "outskirt delivery areas". In this aspect, the Group has finalised arrangements with several of the foreign players to handle pickup and deliveries in areas they do not operate.

As part of the Group's efforts to build and expand its operational capabilities, we have completed the upgrade of most of our regional offices via bigger operation space, more trucks, upgraded equipment and more people. The upgrade has improved operation capacities of all our key branches.

At headquarters, we have also completed design and implementation plan of an expanded hub with a merger of premises and an upgraded parcel sort conveyor system. When completed, it would more than double our sorting capacity, thereby providing room for growth in our parcel delivery business. This new line has been fully operational in the first quarter of the current financial year.

During the year, we enhanced our express delivery facilities by expanding our vehicle fleet, from 296 to 331 trucks, while the combined carrying tonnage rose from 525 to 621 tons. All our 3 tonners and above have been fitted with tailgates to enable loading and unloading of large cargo and our Secured Line-haul Movable Compartments. We have also upgraded the GPS systems installed in all our long distance line-haul vehicles.

On operating system, we have completed the upgrade of our Proof of Delivery (POD) system to enable POD update online. Hence, customers will have faster access in tracing their consignments.

During the year, the Group announced and completed its one-for-five share warrant issue exercise which resulted in the creation of 51,437,207 warrants, which if fully exercised by the end of the five-year period, will result in the creation of an additional 51,437,207 new shares.

It has also obtained approval from the authorities for a special bumiputra issue to allocate 10% of GDEX shares to selected bumiputra institutions and individuals at a price to be determined later.

The year reviewed also saw the entry of Singapore Post (SingPost) as a substantial shareholder when it acquired 27.08% of GDEX shares. This effectively made GDEX an associate of SingPost.

The Group also set up a new subsidiary GDEX Regional Alliance Pte Ltd in Singapore for regional expansion.

We have completed the restructuring of salary packages for our employees, taking into consideration the steep increase in the cost of living. At the same time, we have revamped our Performance Appraisal System which enables us to evaluate employees' performance based on achievement of specific KPIs.

To attract and retain talent, the Group has implemented various programmes for human resource development such as Leadership Development Programme to commission and mentor branch and functional heads, Executive Trainee Scheme to prepare one for executive positions, GDEX Scholarship to seek and groom potential future leaders, and Industrial Attachment Programme to enlist good fresh graduates.

The Group also launched its Executive Higher Education Sponsorship Programme for its executives, which provides higher education and better career advancement for them.

During the year, we completed 18,720 man-hours of training for our employees compared to 17,336 man-hours in the previous year.

The Group has started a community support programme for indigenous people. Under this outreach programme, we provide schooling necessities to Orang Asli children in Cameron Highlands in support of their continuous education.

GDEX Blood Donation Drive, now in its fifth year running, continued to draw support from GDEX staff, our neigbours and our customers. The blood donation drive netted a total of 227 pints of blood for the Blood Bank.

The global economic outlook is not encouraging. Economic prospects of the developed world remain bleak with high unemployment, unsustainable debts and a distraught world financial order. Meanwhile, rising prices contribute to higher salary expectation and rising cost of doing business. New entrants to the industry at the same time, intensify competition. These are the challenges that we need to overcome to stay ahead.

On the bright side, rapid proliferation of the internet creates plentiful opportunities in B2B, B2C and P2P e-commerce which in turn presents room for growth for logistics service providers like us. We just have to be prepared for this new trend.

Our key objective is to improve service quality and gain greater trust from customers. To achieve this, we need good and talented people, better processes and bigger capacity to keep up with the demand. Developing the talent pool will remain as one of our key strategies. We will also exploit new technologies and scrutinise our operation processes. Building bigger capacity require us to commit more resources to meet customers' needs. We need to be bold and yet prudent in managing our resources.

One key strategic focus is improved productivity. This is our key driver to stay ahead.

Moving forward, we need to become a total logistics solution provider, as customers expect one-stop solution for all their logistics needs. Hence, we shall develop our second engine of growth, in warehousing and freight management.

Lastly, we will continue to explore opportunities in the region.

I would like to thank the Board of Directors for their guidance, in particular Mr Lau Wing Tat and Mr Kong Hwai Ming who have resigned from the Board in this financial year for their contributions to the Group.

Many thanks also to my fellow colleagues for their hard work and commitment. I also thank our customers, vendors, business service partners and government agencies for their support to help us grow.

I look forward to further progress and sustainable development in GDEX. I am confident that we are on the right path towards becoming the leading express carrier and a competent total logistics solution provider in Malaysia and in the region.