Q: When did you join YCH?
A: As you probably know, YCH is a family- owned company, started by my father in 1955 as a passenger transport business. I joined in 1977, rather reluctantly I would admit, when my father asked me to help out when he lost his one and only customer, the Public Utilities Board (PUB).
It was then that we switched to moving cargo instead of people, and we won the contract from PSA (known at the time as the Port of Singapore Authority) to transport cargo between its various ports around the island. Singapore was booming at that time and business was very good.
After that, I guess I got stuck. My father retired and I formally took over in 1981. I inherited 100 lorries and 100 workers. Now, we have migrated from a Singapore transportation company into a regional total logistics provider, with 3,600 people in 13 countries across Asia Pacific.
Q: Does YCH focus on any particular industry sectors?
A: Yes, we provide logistics services to companies in three industries: Electronics, Chemicals/Healthcare, and Consumer Goods.
First and foremost is Electronics, which requires very sophisticated supply chain solutions for the likes of Dell, Motorola, and Canon. It’s our highest margin, highest revenue business but also the most demanding.
In Chemicals/Healthcare, we focus on specialty and fine chemicals, which involve a lot of safety demands, since we are often in charge of storing and moving very hazardous materials.
Consumer is an interesting and growing sector, especially when you consider the increasing affluence across Asia boostingconsumption levels for all kinds of goods, and it is characterized by high volumes.Our clients here include companies likeMoet Hennessey and Danone.
Q: Which do you see as the ‘bright spots’ across Asia?
A: India is looking good; it’s much moreof a domestic-driven growth story there asopposed to China’s export model. We’veramped up very quickly in India, buildingour network across the country in justtwo years, leveraging on the 37 partnerswe have there.
Our own Indian facility will be ready this year – occupying half a million squarefeet of space in Chennai. And we are lookingto build 13 similar ones in the next fewyears. I see the current lack of good, safewarehouse infrastructure in the country asbeing a good opportunity for YCH to comein with modern, professional facilities.
We have been in China for much longer, since the early ‘90s, and have a presence inall the first tier cities. We are now embarkinginto second tier cities, like Chengduand Dalian, which have huge populationbases and which the government is targetingfor more investments. Vietnam isalso up and coming, as companies targeta ‘China plus one’ strategy.
Q: There seems to be a strong focus on technology at YCH. How did this come about?
A: We decided from the very beginning to build our own software solutions. It was a harder journey, but what it gives us now is a very high level of flexibility. Our solutions include Intribution – a web-enabled manufacturing logistics solution, and Retrogistics – for after-sales service and return logistics. We spun off our IT arm as a subsidiary – Y3 Technologies, which now has 180 staff – because we wanted it to compete in the market as a separate company.
If customers’ supply chain processes change or scale, we can make appropriate software modifications very quickly. Dell, for one, is very pleased that we have this capability. In comparison, our competitors are much more reliant on software vendors, and it’s also much more expensive for them to deal with process changes.
Q: Any concerns regarding the rather bleak economic outlook? A: It’s not such an issue from an operational perspective – our business volumes remain intact – but more from a capital financing point of view, because our expansion needs to funded and if the banks are hesitant to lend then we won’t be able to grow so quickly.
On the positive side, the inflationary trends and rising fuel costs of the last couple of years have been a headache for us. And so the lower-cost environment is also an opportunity, from an entrepreneurial standpoint.
Q: What is your long term ambition for YCH?
A: Our journey to being the leader in the region is intact; we’re growing very quickly and I think we will be there very shortly. The most important requirement from customers is the ability to distribute products throughout Asia, and this is something that we can provide – at a competitive cost – through the solid network that we have built up over recent years.
Over time, we want to show that Singapore can produce another globally known icon, like Singapore Airlines, and our senior management is driven by such a vision. So after 2010, we intend to go global.