"In Malaysia, 2023 will be about consolidating the new warehouse facility, which has been a major milestone and a big step forward."

Lothar Lauszat

MANAGING DIRECTOR, LESCHACO MALAYSIA

April 14, 2023

Could you introduce Leschaco Malaysia?

With over 3,000 employees worldwide, Leschaco can be defined as a medium-sized multinational corporation. Malaysia is a significant node in this global network. We began operations here in 2000, but for the first 10 years the business was managed from Singapore. Starting from 2010 onwards, Leschaco Malaysia embarked on an ambitious development plan, growing together with the chemical and oil & gas industries in the country. One of our key advantages in the market is that we operate as a network of 100% owned companies sharing the same operating systems and platforms, which makes us very efficient, especially when it comes to the visibility of our shipments. Everybody talks about track and trace, but Leschaco can monitor and document the entire transportation chain, from door to door.

What are the main services Leschaco offers in Malaysia?

Leschaco Malaysia offers a full range of logistics services, including sea freight container shipping (FCL), as well as LCL. Additionally, we also provide airfreight services, and we are an IATA-registered cargo agent. Also, we are among the few logistics companies operating an ISO tank container fleet, currently of around 6,000 tanks. And very crucial to the chemicals industry is our brand-new warehouse for chemicals and dangerous goods (DGs), through which we offer contract logistics services including warehousing and distribution. For warehousing, we handle mostly imported finished products, which are then distributed to end customers. Finally, our customers also value our services in customs clearance and inbound-outbound handling. Leschaco can provide direct customs clearance because we are a registered customs broker in Malaysia.

What has motivated Leschaco’s investments in warehousing expansions over the years in Malaysia?

We noticed a high demand for chemical storage that meets the highest EHS standards for various types of hazardous materials including flammable, toxic and corrosive products. In the following years, we started looking at other capacity additions and, in 2019, we started the construction of the facility we sit in today. Inaugurated in 2021, the 128,000 square ft warehouse has three times the capacity of what we managed before, so we moved our existing warehouse businesses to this new location. This warehouse was specifically designed for chemicals including DGs, with everything from the makeup of the walls which need to withstand certain heat intensities to the containment installations inside the warehouse to prevent outside spillage.

What have been the most recent trends in terms of shipping volumes in and out of Malaysia?

2022 was a solid year with limited fluctuations in terms of volumes, but the biggest challenge came from volatility in freight prices. For example, in the transpacific trade, freight rates from Southeast Asia to the US went up to 15-20,000 US$. By Q3 of 2022, prices dropped to pre-covid levels. Generally speaking, sea freight rates on some trade lanes are now similar to pre-Covid levels, after considering other factors like cost impacts through the IMO 2020 regulations and fuel price developments. At Leschaco, we say we live in a “VUCA” world – an acronym that stands for volatile, uncertain, chaotic, ambiguous. Our view is that shipping volumes may drop in 2023 given the various global uncertainties related for example to the conflict in Ukraine, inflation, lower private consumption, public spending, and other macro trends, but Leschaco is well positioned to continue to grow even in this environment.

What are Leschaco’s main investment priorities for 2023 and beyond?

In Malaysia, 2023 will be about consolidating the new warehouse facility, which has been a major milestone and a big step forward. Moving forward, we already have plans to increase capacity for 2024 and beyond. Also, Leschaco Malaysia is focused on increasing our footprint in Johor, where we currently have a sales office. HR development is another big priority, as we want to provide our existing employees with the best career opportunities as well as successfully onboard new recruits. At the end of last year, Leschaco launched a new ERP operation system that will be rolled out across our business units over the next two years. The software change will also come with big organizational and cultural changes that we must all adjust to, and it is part of a broader reorganization, including the implementation of further regional and product management structures.

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