LISTED specialised logistics provider OneLogix has expanded its vehicle transport operations in Africa by establishing businesses in Tanzania and Kenya, primarily for the transport of used vehicle imports from Japan and Korea.
It is also considering expanding its vehicle transportation business into Angola.
Ian Lourens, the chief executive of OneLogix, said last week that it had started a vehicle transport business in Tanzania and was also entering the Kenyan market. He said motorists in Japan and Korea were heavily disincentivised from keeping their cars beyond three years and the company used to move a lot of used vehicles through Durban into Africa.
But Lourens said this market had declined as the vehicles were finding their way to places like Dar es Salaam in Tanzania because the market was quite price sensitive.
He said about 90 percent of the market in Tanzania comprised used vehicles, but about 40 percent of these used cars were delivered to countries outside Tanzania.
Lourens said OneLogix already had one vehicle carrier truck operating in Tanzania and expected to eventually increase this to six trucks. He said the group was only aiming to get about 5 percent of the Tanzanian market.
He said the Kenyan market was much bigger than Tanzania’s and had a lot more new vehicles, but also a lot of used vehicles. “Nairobi is a nice robust market and consumes a lot of motor vehicles. We’re looking to take vehicles from there into… countries like Rwanda, Uganda, South Sudan and Ethiopia.”
Lourens said the group’s business in Kenya had not yet started operating and Angola was also on its radar screen.
He said original equipment manufacturers in South Africa used to load vehicles on ships in Port Elizabeth and Durban and ship them to Luanda. But it took between 30 to 50 days to get the vehicles back on land and OneLogix could deliver them in seven days.
“So Angola could open up to us, but we’ve got a bit of work to do still,” he said.
Geoff Glass, the financial director at OneLogix, said cross-border operations accounted for about 20 percent of group revenue, but had achieved better margins.
This would increase to 30 percent in the next six months with the opening of the businesses in Tanzania and Kenya, he said.
The establishment of these businesses and the group’s development of a R130 million vehicle storage facility between Durban and Pietermaritzburg would increase, in the short term, the percentage of the group’s revenue from vehicle transportation.
About eight years ago, vehicle transport accounted for about 82 percent of revenue, which was too high, and OneLogix’s strategy was to invest in areas outside of vehicle transportation as it grew. As such, it had reduced this percentage to about 40 percent.
last week reported 14 percent growth in headline earnings a share for the six months to November, to 20c from 17.6c.
Shares on Friday lost 6.47 percent to close at R5.20.