“ITL has established for 20 years through this period we have built a strong foundation and achieved the leading position in the local Logistics industry, this gives us the capacity to face the market impacts, barriers and changes in a more positive way and in fact, we have always turned them into motivational forces to improve ourselves and grow ITL much stronger.”
1.What is the investment strategy of ITL Corporation in the current period?
ITL Corporation has started the M&A investment strategy since 2015 and achieved certain successes. We created a very clear transformation from an asset-light and service company to become a company with strong platform of tangible assets such as sea port, river port, inland container depot (ICD), real estate… and network of subsidiary companies with strong brand and long-term establishment. Currently, ITL is considered by peers, to be in the group of top Vietnam Logistics companies thanks to our size, asset network and operation platform.
The M&A investment strategy of ITL in the next phase of our development is still focusing on Logistics companies having strong asset base, such as ports, warehouses, ICD or operation capacity suitable to ITL’s development goal. To be clear, ITL will not make financial investments or engage in short term investments, and ITL will not invest in the companies without strong tangible assets or operation such as start-ups.
In the near future ITL will focus more on restructuring all the investments made the last few years. We will speed up the restructure of the underperforming or weak business units and divest or wind up loss business units or subsidiaries that are not suitable to ITL’s development direction.
2. It is said that ITL will have an investment of 70 million USD by 2020, what will ITL be interested in this investment plan?
Just recently ITL has been successful to raise an instrument of USD70 million from a syndicate of some large international financial institutions. It is a very good news that I am honored to share.
This is also a clear fact that we should all be very proud of, that even though the market is undergoing historical changes and Covid-19 pandemic, ITL has been able to raise such a large amount of money; we have built a solid platform to launch strong growth prospect that difficult international financial institutions want to support us and to be part of our success. Most of this money will be used to complete a major deal that ITL Corporation has been diligently pursuing in the last 5 years. We have gone very far in the process and hopefully we will finish it well in the next few months.
This investment will improve significantly ITL’s tangible Logistics asset platform, allowing us to own an extensive network of ports, ICD, warehouses, barges…, and this also allows ITL to launch our dual-brand strategy much faster as we now own strong established brands with ongoing profitable operation.
This investment will be an important platform for ITL National Champion goal that each of us have committed to and worked hard every day for.
3. In its investment strategy, how does ITL Corporation deal with the market barriers and changes? Does the impact of COVID-19 pandemic on the Logistics markets affect ITL’s investment policy?
Logistics is a very critical industry for the development of any country, there are lots of room for development. In many other industries we may witness even more barriers and changes while those industries do not have much room for growth or experience a saturating life cycle. ITL has established for 20 years through this period we have built a strong foundation and achieved the leading position in the local Logistics industry, this gives us the capacity to face the market impacts, barriers and changes in a more positive way and in fact, we have always turned them into motivational forces to improve ourselves and grow ITL much stronger.
Currently, there are about 3,000 – 5,000 small and very small Logistics local enterprises in Vietnam, the consolidation of companies will soon take place very strongly. Therefore, ITL needs to focus disciplinarily on its investment strategy; we do not invest outside its expertise, but at the same time we continue to invest in the growth of our Logistics tangible asset platform as well as service portfolio through more M&A activities so that we can maintain our stable and leading position in the Logistics chain working with big Logistics international companies in the world.
The Covid-19 pandemic certainly will affect ITL’s investment in the way that we will focus more on improving the capacity efficiency of the companies that ITL has invested in, more on managing costs and taking more stringent measure to reduce debt and preserve the cash. These should be carried out in a more focused and decisive manner.