ATS inks deal with Karry Logistics

CEBU, Philippines - Aboitiz Transport System (ATS), through its subsidiary Aboitiz One, has inked a joint venture deal with an international logistic firm Karry Logistics to expand its logistics services globally.

Karry Logistics strong operational network in Asia will enable ATS, the transport and logistics arm of the Cebu-based conglomerate Aboitiz Equity Ventures (AEV), to take advantage of the promising logistics business in the world.

 AEV chief finance officer (CFO) Steve G. Paradies said that both companies are still finalizing their joint venture agreement, and may change the corporate name of Aboitiz’s logistics arm with the finality of the contract.

“We felt that it is important to have a strong international logistics network. Karry Logistics is strong in Asia, and China markets, as well as the rest of the world,” Paradies said.

The new company will be handling exports and import cargoes to anywhere in the world in both sea-freight and air-freight, Paradies said.

 Paradies said the logistics business in the Philippines, as well as in the world, is significantly growing, and the company is going to grab this opportunity, through linking with strategic partners, such as Karry Logistics.

The company recently bought out Scan Asia, which handles cold chain services, and domestic logistic services for big multinational companies, like Mead Johnson, Kraft, among others.

After the failed buy-out of ATS to shipping firm KGLI-NM Holdings, Inc., ATS vowed to strengthen its transport and logistic business that will remain one of the core businesses of the Aboitiz Group.

In fact, he said the company is considering bringing in some new vessels in the next few months. To date, the company maintains 11 vessels that serves both passage and freight services.

In its passenger operation, Paradies said ATS will be acquiring two medium-size ferries that will serve Cebu to Northern Mindanao route.

However, the company also plans to dispose some of its old vessels, saying “as the tonnage gets older, we will put them in the market.”

For its fast craft business, Paradies said ATS will be selling two of its SuperCat vessels to be replaced by newer ones.

In 2007, ATS freight revenues reached P7.0 billion, a six percent higher compared to 2006. In the same year, its forwarding service brand 2GO was able to grow its RoRo business by over 60 percent in both revenue and volume compared to its 2006 performance.

This growth was attributed to customers’ realization of the brand’s efficiency of shorter lead times brought about by the farm-to-market strategy of RoRo.

Overall, ATS ended the year 2007 with P318 million contributions to the AEV, a 124 percent increase over its 2006 contribution.