Kerry Express slashing operational costs to cope with economic challenges
Kerry Express (Thailand), an express delivery company, has launched an aggressive cost-cutting programme and is increasing investment in technology to improve operational efficiency.
Alex Ng, CEO of Kerry Express (Thailand), said at a press conference on Friday that its "Lean Programme” follows up on its aggressive pricing strategy in 2022, which put significant competitive pressure on its competitors.
However, as the global recession, high inflation, energy price volatility, and geopolitical tensions intensified, Kerry needed to improve operational efficiencies in many areas. Ng said it was required to create a better appetite for larger market share and scale when the economy shows signs of recovery.
"We decided to launch the Lean Programme in the first week of 2023 as a commitment to internal improvement and returning to be profitable," he said.
Ng added that Kerry, as a good and responsible market leader, should always look inward to improve its cost efficiency, employee productivity, and creativity.
He explained that the programme would use four main strategies to cut costs from within.
The first step is an aggressive cost-cutting and waste-reduction exercise. Then there's the management pay cut for top executives. Following that, all departments' head counts would be frozen until further notice. Finally, non-performing sites and locations would be closed.
Aside from cutting internal costs, Kerry is committed to increasing capital investments in machinery, equipment, and systems that help to automate work processes in a variety of areas.
Ng revealed that the first shipment of new equipment would arrive in Bangkok in the first quarter and become operational in the second.
He claimed that the company had gained a lot of technological and industrial know-how from its sister companies, such as SF Holding in China and Kerry Logistics Network in Hong Kong.
"Such investments will bring Kerry’s running costs down immediately and take our operations to another level. SF Express and KLN are giving us a lot of inspiration, especially in technologies and industrial know-how. We will also slowdown the development of non-core businesses so our people could focus on the above initiatives with sharper attention," Ng said.
The company is still finalising the details of its investment.
While acknowledging that the plans are challenging, he said Kerry believes they are the right steps to help the company achieve a breakthrough in profit recovery and propel Kerry to a new level of success in a short period of time.
