During a media roundtable held on December 6th, Egyptian Transport and Commercial Services Company (Egytrans), the leading integrated transport and logistics company introduced the next level of its strategy in the Egyptian market.
The strategy aims to achieve accelerated and sustainable growth of value chains delivered to its customer base, by focusing on a number of development areas, including but not limited to achieving sustainable growth, increasing profitability, delivering optimum efficiency, and performing operations according to the highest level of quality and speed. For that end, the company will concentrate on delivering new value-added solutions and services to the integrated transport sector in Egypt. Currently, the company drives growth by focusing its operations toward specialized activities that serve growing and promising markets. This will go hand in hand with continuous enhancements of competitiveness, and mitigation of any risks through diversifying the company’s business portfolio. The strategy has proven successful in delivering revenue growth, cost efficiency and margin improvements during this year.
“We have found that top performing companies set themselves apart in two ways” said Abir Leheta, Chairman of Egytrans, explaining the reasoning behind this strategic direction. “First, they understand the success factors and related best practices that are critical to maximizing their profits in today’s market. Secondly, they maintain their competitive edge and proactively position themselves to seize opportunities arising from the major trends reshaping the national and global economies.”
With this in mind, the Board of Directors of Egytrans charged the executive management with performing a comprehensive review of the available strategic and structural alternatives for the Egytrans Group at the beginning of 2016, with an objective to generate growth, speed performance gains, increase synergies between member companies of the group and maximize shareholder value over the long-term. “The growth of Egytrans will focus primarily on delivering best-in-class transport and logistics services as one of the leading Integrated Transport & Logistics companies in the local market. Egytrans’ strategic direction will leverage the Group’s unique position within the transport industry by introducing innovative services and individualized customer solutions” added Khaled Hussein, General Manager of Egytrans.
Egytrans’ strategy rests on three key pillars to deliver long term profit growth:
- Achieving operational excellence by introducing high quality services and improved customer experience through delivering new solutions in the transport and logistics industry designed to meet the specific needs of each customer. Egytrans will continue to grow its market share with a view to vertical expansion to deliver innovative customer solutions.
- Ensuring efficiency in utilization of working capital and the best value delivered to shareholders and other stakeholders. The company is therefore considering various investments in new areas in the transport and logistics sector to support this strategy while focusing on cost effectiveness and best practices to enhance returns. Developing new services for existing and new customers is a key deliverable at the core of the strategy.
- Continuously improving Egytrans’ capabilities and internal systems, while investing in human capital, the company’s most valuable asset and one of the most important factors in achieving our success and leading position.
In line with the implementation of this strategy, a number of actions have been taken during 2016, starting with the restructuring of Egytrans’ business portfolio; as such a decision was taken to liquidate Egytrans Barge Link and Egytrans River Ports, due to the difficulty in obtaining operation permits at the current time. Egytrans’ current portfolio comprises Egytrans Depot Solutions (EDS), Egyptian Transportation & Logistics S.A.E. (ETAL), Wilhelmsen Ships Service Egypt (Barwil Egytrans) and Scan Arabia. “Our business model is based on the group’s companies complementing and completing each other. Our mission is to make integrated transport easy, safe and cost-effective, a process that supports and facilitates our customers’ supply chains, and enables them to trade globally and locally” says Abir Leheta. “Egytrans continues to focus on building a transparent and well-governed organization in which each unit operates according to clear and specific principles, vision and strategies. Managing and operating Transport & Logistics business activities in a more integrated and comprehensive manner will enable profitable growth through stronger collaboration and effective capital allocation.”
Investment in providing new services and solutions is another integral part of Egytrans’ strategy, as demonstrated by the launch of Egytrans Depot Solution (EDS). EDS specializes in storage, cleaning and repair of liquid bulk containers, especially ISO Tank Containers and tank vehicles. Today it is the only facility in Egypt providing ISO Tank cleaning and repair in accordance with European standards, with state-of-the-art equipment and experienced staff trained in all aspects of ISO Tank processes.
Continuing to strengthen its financial structure and working towards defined financial targets are integral aspects in the success of Egytrans’ strategic vision. A number of enhancements have been made in how the company monitors its financial results in addition to changes in its operational targets over the short term. Most recently the company improved its financing structure through the successful negotiation of new credit facilities that will help increase the cash available for use in potential investments. Hussein adds to this that a clear organization structure and the application of strong corporate governance, in addition to advanced IT capabilities, operational excellence, and a balanced business portfolio are some of the factors that have been reviewed within the framework of this strategy.
“We are confident that we are well-positioned to benefit from the available opportunities to combine strong growth with high returns” Leheta comments on the strategic implementation, adding that “our new structure will allow us to recognize how new trends are reconfiguring our industry and hence we will be ready to respond quickly and decisively to market needs.“ She adds that, “Historically speaking, Egytrans’ strategy and structure have undergone frequent modifications, in order to stay agile and the company will continue to implement the developments needed to preserve its market leadership and enhance its growth. While we have an impressive track record in the transport industry, we should never be static in a dynamic world. Therefore, we have ambitious plans in light of potential developments and opportunities in transport and logistics in the near future.”