Rooftop depot helps Cogent to pack in more

Chief executive Benson Tan said Cogent grew annual net profits in its core business areas because it targets customers who require more specialised services.
Chief executive Benson Tan said Cogent grew annual net profits in its core business areas because it targets customers who require more specialised services.ST PHOTO: LAU FOOK KONG

New storage area is 75% smaller, but cranes can stack containers twice as high

A new rooftop depot will allow logistics firm Cogent Holdings to greatly reduce land use and pack empty containers more densely.

The new depot area of 350,000 sq ft is about 75 per cent smaller than Cogent's current empty container depot.

However, its storage capacity is just 20 per cent lower than the current site's, at about 16,000 standard-sized shipping containers.

The depot is part of Cogent's new $160 million logistics hub in Buroh Crescent, which officially opened on Monday.

Cogent will move containers from its present depot in Jalan Terusan to the rooftop one, and expects to return the land that holds these containers to its landlord by the end of this year.

Cogent chief executive officer Benson Tan said of the rooftop depot: "We can expect better cost efficiency." He declined to reveal the amount that will be saved annually from the move.

In the past, forklifts could stack only seven or eight containers on top of one another. However, the overhead cranes in the rooftop depot can stack 15 containers.

Because overhead cranes are now used to move containers, less floor space needs to be allocated for vehicle manoeuvres.

Another benefit is that the container depot is located in the logistics hub together with warehouses.

Extra trips are no longer needed to move empty containers to these warehouses when goods need to be picked up, or from the warehouses to the container depot after goods are unloaded.

Cogent has been awarded patents for this building concept in Singapore and abroad, and hopes to leverage on this to expand overseas.

The firm released its full-year results yesterday.

Fourth-quarter earnings ended Dec 31 fell 33 per cent from a year earlier to $7.3 million.

However, if gains from disposal of property, plant and equipment are removed, net profit for the three months to Dec 31 rose 53 per cent, Cogent said. Revenue grew 9 per cent to $33.3 million.

Mr Tan said the group grew annual net profits in its core business areas despite the economic conditions, because it targets customers who require more specialised services, such as warehouse services for chemicals.

Earnings per share for the three months was 1.53 cents, down from 2.27 cents a year before.

Net asset value as at Dec 31 was 21.65 cents, up from 20.18 cents as at Dec 31, 2014.

A final cash dividend of 1.88 cents per share was proposed.

Looking ahead, Mr Tan said that there will likely be a slowdown this year in many sectors, including logistics, and that it will be tougher than last year.

Cogent, however, is cautiously optimistic as it has already secured "several mid- and long-term contracts for the next three to five years", Mr Tan said.

A version of this article appeared in the print edition of The Straits Times on February 27, 2016, with the headline 'Rooftop depot helps Cogent to pack in more'. Print Edition | Subscribe