Leong Chee Tong Executive Director and Chief Executive Officer

Amidst an environment that permit little margin of tolerance, we have identifed three priorities to move forward. Our top priority is to reinforce sustainability and not allow liquidity shock threaten our survival. Next, we have to continuously enhance our long term competitiveness and cost effectiveness. Finally, we need to ensure our core business is built on a solid foundation. Translating these priorities into operational strategies, we focus on the following areas:

• Improve Cash Flow, Accounts Receivable and Balance Sheet
  To enhance liquidity and to improve Accounts Receivable, we implemented a 2% prompt payment rebate. Additional resources were allocated to beef up collection efforts, alongside other incentive schemes. Though that accounted for some erosion on top and bottom lines, we improved our cash and cash equivalents from RM5.50 million to RM10.68 million over the financial year. Trade receivable ageing was reduced from 3.2 months to 2.6 months, while total bank borrowings were reduced from RM9.4 million to RM8.0 million. The result was a much healthier balance sheet.


• Improve operation efficiency and productivity
  Operation effciency and productivity are keys to cost structure, which in turn affect pricing policy and competitive position. We have established productivity standards and formulated operation guidelines to achieve the standards. We have also set up a review mechanism to drive continuous productivity improvement.


• Improve key service components
  We have reviewed three key service components, namely service reliability, service responsiveness and service hospitality and installed measures to improve them. Tools have been designed and put in place to measure and analyze each service component. Based on the findings, plans were developed to drive service improvement.

Our focus to strengthen liquidity and balance sheet did not deter us from developing our capabilities. To balance development need and liquidity, we need to be selective. The criteria we have adopted is to invest in areas of immediate improvement in service or productivity. Following are the areas of developments:

• Adoption of Secured Line-haul Movable Compartments and fxture of all line-haul trucks with tail-gates
  The adoption of this solution is the frst-ever within the industry. It improves turnaround time in the loading and unloading of shipments to and from the line-haul trucks. It also improves security and accountability in the handing over of shipments among transshipment hub, line-haul trucks and stations. The new mode of express hauling also helps prevent customers’ shipments from damage.


• Further development on GDEX Intranet and Extranet
  Our delivery service was further refned with more interactions taking place over the intranet platform; for example, the Online Service Area Reference and report of proof of delivery over the intranet. The adoption of extranet provides us additional channel of close co-ordination with our customers.


• Retail Lodge-in Agents
  To provide better convenience for customers in the city, we have introduced a scheme of Retail Lodge-in Agents. A total of 17 agents have been appointed.


• Expanded feet
  To support the increase in business volume, we continued expanding our feet size and feet capacity. A total of 31 trucks were added, bringing feet size to 280 units as at 31 June 2009 from 249 units previously. Accordingly, our carriage capacity was increased to 491 tons from 386 tons.


• Commenced Ground Line-haul operation in Sabah and Sarawak
  We have commenced operation of intra-state ground line-haul within Sabah and Sarawak. This strategic deployment enhances our reach within these 2 states and is expected to strengthen our competitive edge in the long run.

To ensure our services remain relevant, there is a need to understand the ever changing market needs. The key challenge is to satisfy customers’ needs while conforming to our core operation processes. That is where customised logistics solutions come in.

We have launched GDEX’s pre-paid Speed-Doc and Speed-Pac. These have added greater convenience for customers to lodge in.

To ensure company operations are productively run, our key resources namely human, financial and existing infrastructure need to be organised effciently. Human resources top the list.

Training for our front line staff was intensifed. A total of 23,896 man-hours of training were received by our staff compared to 22,895 man-hours before.

A revised salary structure was implemented to bring salary scales closer to market rates. While operating costs have increased as a result of this decision, this is vital to attract and retain talents in the organisation.

The Group adopted a cost rationalisation exercise to control and reduce cost on numerous fronts. Several scenarios of possible economic situations were prepared and their response plans were being tested. On financial management, the Group has beefed up its reserve in view of the continued uncertainties on the economic front.

We also reviewed the operation of our existing infrastructure and facilities to promote a more effective utilisation of resources.

On the corporate front, we have undertaken the following developments:

• New Vision and Quality Policy
  We have revised our Vision Statement and Quality Policy. Our new Corporate Vision is in line with our aspiration to provide the most admired delivery service by a team of dedicated and passionate people. Our new Quality Policy calls for every employee of GDEX to view criticisms constructively and positively, and to adopt an objective-oriented approach.


• Memorandum of Understanding (MOU) with Lao National Post
  As part of our efforts to explore opportunities in regional expansion, we have entered into discussions with Lao National Post. An MOU was signed to explore developing the express carrier business in Laos. So far, feasibility study has been completed.


• Roles of the Corporate Governance Unit
  We have specifed the roles of our Corporate Governance Unit. The roles include the responsibility to report improper conduct of all levels of staff to the Audit Committee of the board of directors.


• Corporate Social Responsibility
  We have carried out our fourth blood donation drive and collected over 200 pints for the Blood Bank. In addition, 5 industrial attachments programmes were conducted in collaboration with the various local universities. A total of 70 participating trainees have benefted from it.

We foresee the world economy will remain uncertain for the time being. A sustainable recovery may take longer to materialise. Business environment will continue to evolve. Changing market needs is bound to render some businesses irrelevant while opening up new avenues. We must constantly look out for threats and opportunities and be sensitive to changes in consumer needs.

The building block of a lasting organisation is a culture with clear vision, strong sense of mission and sound values. This is vital in attracting and retaining talents of good character to become our future leaders.

We need to remain focused in developing our strengths by further sharpening our core service competencies. We also need to identify new business opportunities by being close to the ground.

We are resolved to maintain fnancial security by having a strong balance sheet and being prudent in engaging any expansion activity.

We will continue to develop our human resources and groom future leaders in all levels of management. To achieve this, we will implement a sustainable development programme for our people.

We will continue to explore opportunities of growth in the region to propel our expansion.

I would like to thank the Board of Directors for their guidance and my fellow colleagues for their dedicated commitment and hard work. I also thank our customers, vendors and business service partners for their unreserved support during these tough times.

I look forward to further progress and sustainable development in GDEX to make us the leading express and customised carrier in Malaysia and in the region.