Tiki to split into courier and logistics subsidiaries

Indonesia’s courier service and logistics company PT Tiki Jalur Nugraha Ekakurir (JNE) plans to transform itself into a holding company and establish two subsidiaries that will focus on separate market sectors.

JNE managing director Johari Zein said the holding company would first establish a logistics company called JNE Logistics in the fourth quarter of 2012 and would later establish JNE Express, which would focus on the courier service business.

Johari said the logistics sector currently contributed nearly 20 percent to JNE’s total revenue every year, while its courier services contributed most of the remaining 80 percent.

“In the near future, the logistics sector will contribute a lot more to our total revenue,” he said while adding that the courier services would continue to grow as more people purchased a wider variety of products through online services.

He declined to be specific about the company’s revenue or net profit figures, but he did predict that their revenue would reach Rp 1 trillion (US$109 million) this year.

Moreover, Johari said that JNE was going to expand their business by having their own shipping lines and ports in the future.

“We see a lot of opportunities in shipping lines and ports, and that is our grand design for the future,” he said.

Currently, they were still conducting feasibility studies to reach that goal and JNE would need to work with other companies to make it happen, he said.

Data from research and consulting firm Frost & Sullivan shows that Indonesia’s total sea cargo volume will increase 5.8 percent this year to 943.1 million tons from 891.5 million tons in 2011, while in 2010 it was 845.3 million tons.

According to Frost & Sullivan, the logistics industry is expected to grow by 14.2 percent to Rp 1.4 trillion this year from Rp 1.2 trillion in 2011, due to the country’s strong economic growth.

At present, JNE has more than 50 branch offices throughout Indonesia with 160 agents in Jakarta and 400 agents outside Jakarta.

Source : The Jakarta Post