KWL to develop facility to tap nearshoring opportunities
Company to make capital investments of US$55 million over next five yearsWednesday, August 04, 2021
BY KELLARAY MILES
As a result of the prevailing novel coronavirus pandemic environment, multipurpose terminal and logistics company Kingston Wharves Limited (KWL) said it is getting infrastructure ready to expand into nearshoring opportunities at the full reopening of the global economy.
Through the outsourcing of business processes, nearshoring offers companies the opportunity to transfer its business to nearby countries over those at a distant, a venture which KWL is intent on capitalising due to its geographic positioning.
The company, which has already spent US$35 million to develop infrastructure over the last five years, is further seeking to spend an additional US$55 million between 2021 and 2025. Among the investments to be made is the development of a 12-acre property that will help the company to tap into its nearshoring objective on which it will spend US$20 million to offer logistics service to global players.
“What we plan to do on the 12-acre property is to construct over 3,000 square feet of warehouse and cold storage space. We've done all the plans and have been having conversations with big players and expect to break ground this year,” said chief executive officer of KWL Mark Williams at last week's Mayberry Investors Forum.
The balance of the capital infrastructural development projects, the company said, will be used to reconstruct a berthing facility (Berth 7) estimated at a cost of US$39 million while the remaining US$5.2 million will be expended to acquire a super Panamax crane. This new equipment will not only help the company to service larger vessels but to also better compete with other well-equipped global ports.
“We've already made a deposit and we expect delivery in the fourth quarter (Q4),” the CEO stated.
Following its achievement of special economic zone (SEZ) status since June last year, Williams said the designation has helped to further place KWL at the forefront of global logistics. He said that the slew of infrastructural developments being undertaken was also to ensure that its facilities meet global standards coupled with quality service delivery.
He further said that with technology being used as a critical component in driving logistics and cutting operational cost, the launch of the company's click and collect platform has been excellent in delivering efficient and contactless service for customers while clearing their personal effects.
Williams, in addressing questions about the dominance of e-commerce, said that the emergence of these platforms will complement rather than hurt its business model since the sea remains the largest avenue for cargo movement — accounting for about 80 per cent of all movement.
The multipurpose terminal operating from a strong balance sheet said that the intention was to further grow profits whilst also being on the lookout for acquisition opportunities in the local and regional markets. The company is also seeking to diversify cargoes, which Williams hinted could include ones in energy.
Comprising some nine deep-water berths, KWL, through its terminals, serves over 1,000 vessels annually, moving bulk and containerised cargoes to over 30 destinations in the region and further afield.
For the three-month period ended in March and despite a marginal drop in revenues, the company earned $1.8 billion accompanied by net profits of $560.2 million and total assets of $39 billion, a performance which the CEO labelled as being consistent despite the pandemic.
Now you can read the Jamaica Observer ePaper anytime, anywhere. The Jamaica Observer ePaper is available to you at home or at work, and is the same edition as the printed copy available at https://bit.ly/epaper-login