This article first appeared in The Edge Financial Daily on August 23, 2019

SHAH ALAM: Logistics and warehousing company Tasco Bhd is well prepared for the impending effects, both negatively or positively, of the ongoing US-China trade war, says its group managing director Freddie Lim Jew Kiat.

“We are prepared if the volume suddenly comes in. In the event there is a surge, we are prepared to cater [to] the surge. But if there is a drop, we are also able to cushion the loss because we do not run all our businesses by ourselves...we have partners who we can cut off to reduce our loss,” he told The Edge Financial Daily after the group’s annual general meeting yesterday.

“We should be able to react, not very quickly but at least we can react in a way that we can cushion off all these things (negative impacts),” Lim added.

However, Lim pointed out that Tasco has yet to feel the disruption to its business caused by the protracted trade war.

“Looking into our performance, for the revenue side, we are not much affected. So whether it is up or down, it looks like we are not affected. A lot of people are saying that this trade war has given more opportunity for us, but as for now we don’t really feel it yet,” he said.

“We are lucky because we have a combination of both domestic and international business segments. So, all our pillars are supporting each other,” Lim explained, maintaining that the company remains cautious with regards to the trade war.

Moving forward, Lim said that Tasco is working on a solution to merge its international and domestic business segments, to offer a holistic service to its clients.

“The opportunity now is more for regional and global [markets], no longer just strictly for [the] Malaysian market, or just [a] segmental market.

“We can actually offer a very good platform for any customer who wants to export or even to import. We are trying to create a solution for both international and domestic customers,” he added, without revealing details of the proposed platform.

He said the new platform is expected to be launched by mid-2020.

Yesterday, Tasco announced its net profit plunged 74.7% to RM1.28 million for the first financial quarter ended June 30, 2019 (1QFY20) from RM5.07 million a year ago, attributed to lower gross margins due to a more competitive environment, especially in the trucking and air freight forwarding segment.

Revenue, however, was relatively flat at RM180.40 million, compared to RM181.64 million for 1QFY19.

According to its filing with Bursa Malaysia yesterday, Tasco pointed out that its bottom line still continued to be impacted negatively due to the more competitive market environment resulting in reducing margins, and the continued, albeit reducing, loss in its convenience retail sector.