SINGAPORE – Transport giant ComfortDelGro Corp expects to spend $6 billion to replace the bulk of its fleet of largely combustion-engined buses and taxis with electric vehicles (EVs), said its founding chairman.
The amount is equivalent to almost three times the group’s current market value.
Speaking at the group’s 20th anniversary gala dinner at the Ritz-Carlton, Millenia Singapore on Friday, Mr Lim Jit Poh said most of the investment will be for the acquisition of new EVs.
“The evolution of the electric environment promises to open up avenues and opportunities for new business growth,” the 83-year-old, who is retiring in April, told some 800 guests present.
Mr Lim also said the group is “seriously looking at the distribution of electric vehicles”, revisiting a motor vehicle distribution business Comfort Group had before its merger with property firm DelGro Corp in 2003.
“We are already leaders in bus and taxi operations,” he said. “In commercial vehicles, we need to take advantage of this electrification phase to accelerate and emerge as a leader.”
Mr Lim added that ComfortDelGro will face a future which is tougher than that it faced in the first 20 years.
“We have been laying the foundations for the future,” he said, noting that the group is setting aside $30 million “to learn and master managing autonomous vehicles”.
“Farther afield, we are actively looking at the logistics business,” said Mr Lim.
The veteran chairman added that the group must consider expanding into sea and air transport.
“In terms of geography, we have to expand into Europe at a speed that keeps pace with what we have been doing in Australia. Plans must be afoot in preparation for expansion within our Asean region. We have to continue to keep large economies like China and India on our radar screen.”
The chairman said ComfortDelGro had “performed exceedingly well in the earlier years”.
“But our performance in more recent times has declined,” he added.
“Our market capitalisation has dropped significantly from an initial pro forma figure of $1.5 billion in 2003, rising to a peak of $6.8 billion in 2015 and now hovering around $2.6 billion – just 73 per cent above the initial merger figure but 62 per cent below our peak. These are alarm bells.”
He continued: “The tasks ahead are therefore very urgent and crucial for our survival. We cannot afford to sit still... I am confident that we have the right resources to confront the challenges that stand before us.”
