This article first appeared in The Edge Financial Daily on September 14, 2018

KUALA LUMPUR: Tasco Bhd is expected to continue its strong growth momentum for the financial year ending March 31, 2019 (FY19), in which the logistic group targets to achieve at least 10% revenue growth.

“I think we should be able to achieve at least 10% growth,” Lee Check Poh, Tasco executive chairman told The Edge Financial Daily after the group’s annual general meeting (AGM) yesterday.

Tasco has seen a strong growth in the top line following the acquisition of its cold chain business in FY18. Its revenue expanded 21.5% to RM710.2 million during the year from RM584.4 million in FY17.

For the first quarter of its financial year ended June 30, 2018 (1QFY19), Tasco recorded 15.7% year-on-year (y-o-y) growth in its revenue to RM181.6 million from RM157.0 million in the corresponding quarter a year ago.

Nonetheless, despite the strong revenue seen, it has not translated into a gain in its bottom line.

On this, Lee explained that some of the new clients acquired by Tasco had led to an increase in the operating costs as the group needed time to learn and train its staff.

He added that these investments would help Tasco to capture this market and to benefit from it in the longer term with expansion of its clients and businesses.

Freddie Lim, the group’s managing director, also shared that the acquisition of the cold chain business segment has also helped to acquire new clients for the group’s dry chain business.

“We have new customers in the dry cargo from our cold chain clients. We have just been invited into a tender to look into some of the dry cargo for our cold chain clients,” Lim added, pointing out that the strength in both areas has led to new businesses for the group.

On the regional front, Tasco is also keen to leverage on its existing solutions in the air freight forwarding division as well as ocean freight forwarding division as it grows its cold chain business.

“Most of the major players in the cold chain space arrange everything by themselves. That means they appoint their own shipping line when they export to the region. It’s because the existing cold chain logistic players do not have that. With Tasco coming in, we actually could arrange all of that for them,” Lim said.

It is worth noting that the air freight forwarding division has seen a slight gain in revenue and profit during 1QFY19.

On the challenges ahead, Lim believes that it would be the learning curve that the group needs to embark on as it takes on new clients with different requests.

The group is not too concerned over the impact from the impending trade war between the US and China as Lim believes that Malaysia can be one of the countries that benefit from the prolonged trade friction between the two largest economies in the world.