SingPost rules out Pos stake.
New Straits TimesThursday, 17th March 2011
( Zaidi Isham Ismail )

SingPost rules out Pos stake.

Singapore Post Ltd (SingPost) is not bidding for Khazanah Nasional Bhd's 32.2 per cent stake in Pos Malaysia Bhd and will also not buy any more shares in courier company GD Express Carrier Bhd (GDEX).

The postal company, valued at S$2.2 billion (RM5.36 billion), on March 15 boosted its stake in GDEX to 27 per cent from 5 per cent as it seeks to expand in the region.

"It enables us to enhance our network and provides us with a platform to tap the growing logistics market in the region. SingPost also has no plans to acquire more GDEX shares at the moment," it said in an e-mail response to a Business Times enquiry.

The deal raised eyebrows as it was done a day before Khazanah's tender deadline for Pos Malaysia.

SingPost, which bought the extra GDEX shares for RM45.5 million, said it is also not eyeing other carrier players in Malaysia for now. GDEX executive director and chief executive officer Leong Chee Tong said with the purchase, both companies can now pool resources to tap the region's mail and bulk logistics industry.

He added that SingPost and GDEX are "cross bordering" currently in the logistics sides, of which SingPost is already using GDEX in making deliveries in different parts of Malaysia and vice-versa.

In a separate statement, SingPost said GDEX will continue to operate independently and there are no immediate plans to change any of the current working arrangements.

SingPost will continue to channel volume through a partner that provides good services at competitive rates.

Leong said although the industry is intensely competitive with some 100 local players, the firm is optimistic of a healthy growth in the future as it registered robust growth in the last six months.

"But, we are cautious with the latest developments in Japan. However, we expect the RM2 billion a year industry to sustain its momentum," said Leong.

The country's top courier companies are foreign owned with DHL, FedEx, UPS and TNT commanding a 60 per cent market share. Some 95 per cent of their business is in the delivery of mail and packages abroad.

GDEX has a market share of 4.5 per cent of Malaysia's carrier service which includes players like Nationwide Express, SkyNet, ABX, Citylink RCS and others.

However, compared to the foreign firms, 95 per cent of the local carriers' business are in Malaysia.

SingPost is 26.01 per cent owned by Singapore's state-owned investment arm, Temasek Holdings Pte Ltd. SingPost operates in Australia, Hong Kong, India, Japan, Malaysia, New Zealand, the Philippines, Singapore, Taiwan and Thailand.

Meanwhile, GDEX shares closed at 81 sen yesterday after hitting an intra-day of 93 sen a share, their highest in 52 weeks. SingPost closed unchanged at S$1.1 (RM2.63) a share.