05 November 2009
The Dubai operations of logistics firm Agility have seen 15 per cent increase in net profit this year so far compared to last year despite the tough economic situation. The overall Global Integrated Logistics (GIL) unit, however, has recorded 15.8 per cent drop in revenue in the first half of this year due to reduced trade volumes.
Greg Olsen, Agility CEO for the Dubai GIL unit, said the drop in freight forwarding and contact logistics was largely offset by the growth in other products such as the project logistics, exhibitions and transportation business.
Olsen, who heads a team of more than 1,000 employees, said the growth was also driven by the launch of its new products and services.
In spite of the increased business verticals, the company is not looking at hiring aggressively as "we are looking at how to optimise our people, improve productivity, quality and technology," he said.
Agility's GIL division accounted for 59 per cent of the company's revenue in 2008. How big is Dubai operation?
We have more than 1,000 people in Dubai. We have five facilities in Dubai - in Jebel Ali, Dubai Investment Park, Al Quoz and Dubai Cargo Village.
Trade has plummeted significantly in the first half of this year. How was the effect of the slowdown on your company?
We are fortunate that we have a wide range of products. Under the GIL brand, we look after project logistics, events and exhibitions, contract logistics land transportation and freight forwarding. We have diversity and therefore it allows us to head towards sustainability. If one product is down because of recession another product may pick up. Even though there are some cautions on projects, there are still some projects going on. Project logistics, for example, is still a positive product for us.
Which sectors bore the brunt of recession?
We've seen an impact in freight forwarding and contact logistics because of the volume drop but we've seen growth in our overall business. Because of the diversity we were able to see a stable platform. We've seen from year-to-date positive growth in gross revenue and net revenue.
How much growth have you seen in your revenue and profit?
It is 20 per cent in gross revenue this time versus last year and 15 per cent on net revenue.
How does that compare to last year?
The previous growth from past year compared to the growth for this year has been pretty static.
Can you elaborate on that?
We are finding opportunity in the recessionary time because of the infrastructure that we are putting in place. We have a lot of infrastructure, which can support the full supply chain solution. We have our own trucks and own customer brokerage teams. So we can do business with our own assets.
What are the internal and external factors that pushed up your financials?
It's also the introduction of new products. We've got new facilities that give us new capacity and opportunity. We've also commenced focusing on certain verticals within contract logistics particularly from the pharmaceutical sector. We introduced container freight station in the middle of this year in freight forwarding.
Did your cost drop considering shipping and airline rates have fallen?
It's all relative. You cannot keep your rates high because the market drives what the competitive price will be.
Logistics involves a huge workforce. Did you cut some of your workforce?
Not as yet. We are looking at cost optimisation. With the growth that we have got, what we are doing is better management of the cost without adding people. Previously, if you got new business you could just add more people but now we look at how to optimise our people, improve productivity, quality and technology.
Does that mean you won't be hiring to match the growth trend?
We will be hiring but not as aggressive as it was in the past years.
With companies still facing some cashflow problem, has collection become a pressing issue for you?
You can argue it's always an issue. Customers are looking for extending credit limits and we need to manage that depending on the clients credit requirements. Our policy is 30 days.
Are you still sticking to that policy? In the main yes, but because of the times you tend to manage that to ensure that the partnership continues. If the customer comes to us we want to work with that company so we won't just say 'no', nor say 'by all means'. We don't have a standard 30 to 60 days agreement. You have to manage that with discipline and protocols
Do you see an increase in defaults?
You always have customers who default. It is not something that is for us is a major issue.
Profile: Greg Olsen CEO, Agility Dubai, Global Integrated Logistics
Prior to joining Agility, Olsen worked with DHL Danzas in Dubai for six-and-a-half years. He also worked and contributed to the success of two New Zealand companies - Banner International and Team Logistics for nine years.
Olsen holds a N2 Certificate of Commerce and is pursuing a degree in Business Studies from Massey University, New Zealand.
The Dubai operations of logistics firm Agility have seen 15 per cent increase in net profit this year so far compared to last year despite the tough economic situation. The overall Global Integrated Logistics (GIL) unit, however, has recorded 15.8 per cent drop in revenue in the first half of this year due to reduced trade volumes.
Greg Olsen, Agility CEO for the Dubai GIL unit, said the drop in freight forwarding and contact logistics was largely offset by the growth in other products such as the project logistics, exhibitions and transportation business.
Olsen, who heads a team of more than 1,000 employees, said the growth was also driven by the launch of its new products and services.
In spite of the increased business verticals, the company is not looking at hiring aggressively as "we are looking at how to optimise our people, improve productivity, quality and technology," he said.
Agility's GIL division accounted for 59 per cent of the company's revenue in 2008. How big is Dubai operation?
We have more than 1,000 people in Dubai. We have five facilities in Dubai - in Jebel Ali, Dubai Investment Park, Al Quoz and Dubai Cargo Village.
Trade has plummeted significantly in the first half of this year. How was the effect of the slowdown on your company?
We are fortunate that we have a wide range of products. Under the GIL brand, we look after project logistics, events and exhibitions, contract logistics land transportation and freight forwarding. We have diversity and therefore it allows us to head towards sustainability. If one product is down because of recession another product may pick up. Even though there are some cautions on projects, there are still some projects going on. Project logistics, for example, is still a positive product for us.
Which sectors bore the brunt of recession?
We've seen an impact in freight forwarding and contact logistics because of the volume drop but we've seen growth in our overall business. Because of the diversity we were able to see a stable platform. We've seen from year-to-date positive growth in gross revenue and net revenue.
How much growth have you seen in your revenue and profit?
It is 20 per cent in gross revenue this time versus last year and 15 per cent on net revenue.
How does that compare to last year?
The previous growth from past year compared to the growth for this year has been pretty static.
Can you elaborate on that?
We are finding opportunity in the recessionary time because of the infrastructure that we are putting in place. We have a lot of infrastructure, which can support the full supply chain solution. We have our own trucks and own customer brokerage teams. So we can do business with our own assets.
What are the internal and external factors that pushed up your financials?
It's also the introduction of new products. We've got new facilities that give us new capacity and opportunity. We've also commenced focusing on certain verticals within contract logistics particularly from the pharmaceutical sector. We introduced container freight station in the middle of this year in freight forwarding.
Did your cost drop considering shipping and airline rates have fallen?
It's all relative. You cannot keep your rates high because the market drives what the competitive price will be.
Logistics involves a huge workforce. Did you cut some of your workforce?
Not as yet. We are looking at cost optimisation. With the growth that we have got, what we are doing is better management of the cost without adding people. Previously, if you got new business you could just add more people but now we look at how to optimise our people, improve productivity, quality and technology.
Does that mean you won't be hiring to match the growth trend?
We will be hiring but not as aggressive as it was in the past years.
With companies still facing some cashflow problem, has collection become a pressing issue for you?
You can argue it's always an issue. Customers are looking for extending credit limits and we need to manage that depending on the clients credit requirements. Our policy is 30 days.
Are you still sticking to that policy? In the main yes, but because of the times you tend to manage that to ensure that the partnership continues. If the customer comes to us we want to work with that company so we won't just say 'no', nor say 'by all means'. We don't have a standard 30 to 60 days agreement. You have to manage that with discipline and protocols
Do you see an increase in defaults?
You always have customers who default. It is not something that is for us is a major issue.
Profile: Greg Olsen CEO, Agility Dubai, Global Integrated Logistics
Prior to joining Agility, Olsen worked with DHL Danzas in Dubai for six-and-a-half years. He also worked and contributed to the success of two New Zealand companies - Banner International and Team Logistics for nine years.
Olsen holds a N2 Certificate of Commerce and is pursuing a degree in Business Studies from Massey University, New Zealand.
By Karen Remo-Listana
© Emirates Business 24/7 2009
