Oil trading and bunkering operator, Straits Inter Logistics Bhd is proposing to diversify into land transportation and logistics to meet the rising demand from its existing customers for such services.
In a bourse filing today, the group said the Board foresees that the net profit attributable to the inland transportation business segment could contribute more than a fourth of total net profit in future fiscal years.
On Aug 30, it incorporated a new subsidiary, Straits Alliance Transport Sdn Bhd, to carry out inland transportation and logistics, mainly using trucks and lorries.
Even though oil trading and oil bunkering services have driven revenue and profit for the past two years, Straits Inter Logistics is of the view that offering additional transportation services to its existing oil bunkering customers could increase its competitiveness as it would be able to provide both onshore and offshore logistics services.
It is seeking shareholder approval for the proposed diversification at an extraordinary general meeting to be convened.
Barring any unforeseen circumstances and subject to all required approvals being obtained, the proposed diversification is expected to be completed by the first quarter of 2019.
Straits Inter Logistics closed unchanged at 23.5 sen, for a market value of RM131.19 million.