Transporting components for Samsung, ALS earned $42 million in revenue

By Viet Hung - Jun 08, 2018 | 02:01 PM GMT+7

TheLEADERInheriting the monopoly advantage in the aviation industry from its founding shareholders, ALS quickly harvests the rewards from choosing the right target to focus on, which is the demand for transportation of goods, components production of foreign direct investment (FDI) enterprises such as Samsung and LG to industrial parks around Hanoi city.

Transporting components for Samsung, ALS earned $42 million in revenue
Noi Bai Off - Airport Cargo Terminal of ALS

Aviation Logistics Corporation, formerly known as Aviation Logistics Services (ALS) is one of the major enterprises, which greatly benefit from the demand of transporting commodity through air. 

In 2007, ALS was established by three founding shareholders including Vietnam Airlines, International Investment Trade and Service Group (Interserco) and Noi Bai Cargo Terminal Services JSC., (NCTS).

The steps of ALS are tied to the development of industrial parks, which have delivered many positive business results.

In 2017, the company earned a revenue of $42 million and post-tax profit of $13.8 million, equivalent to a profit ratio of 33 percent. By 2018, the company plans to gain a revenue of $47.8 million and a post-tax profit of $16.3 million.

After only 10 years of development, ALS has occupied over 50 percent of international cargo volume at Noi Bai International Airport with many big customers such as Cathay Pacific Airways (CX) and Hong Kong Dragon Air, Korean Air, China Airlines etc.

Achieving many optimistic outcome, ALS has successfully attracted many investment funds, in which VinaCapital is a prominent member holding a 9.9 percent stake at the firm.

Although ALS is a relatively young company, ALS has the cutting edges such as a huge, concentrated land fund.

The company is currently hiring nearly 44,000 square metres of land in Phu Minh commune, Soc Son district, Hanoi city and has nearly 7,000 square metres of land through capital contribution mode in Nam Tu Liem district, Hanoi city, which make the total land area of ALS reach nearly 51,000 square metres.

This element has helped ALS develop large warehouse spaces and terminal systems near industrial parks in Bac Ninh province and Thai Nguyen province.

At the present time, the company has the largest cargo terminal in Noi Bai airport with a four floors area of ​​15,000 square metres, which has a capacity to serve about 200,000 tons of cargo annually.

Moreover, it is a convenient location that locates right next to the aircraft parking.

In addition, ALS also owns five long-haul terminals to serve Samsung, Foxconn and other high-tech items. All of these areas have a prime location on the main traffic axis connecting from the major industrial parks in the North to Noi Bai airport.

Despite having larger floor areas than ALS i.e 24,000 square metres, NCTS, the largest logistic service provider in Noi Bai airport, still seems to be less competitive than ALS, when most of its sites are rented, scattered and exploited to the maximum capacity.

According to ALS, as other competitors run out of space and reach their maximum capacity, ALS’s potential is very high in the near future, especially with its superior advantages of cargo terminals and warehouses.

To optimize its advantages and prepare for the next stage of development, the leaders of ALS said it would stick with partners such as Samsung, LG.

It is forecasted that in coming years, the free trade agreements such as TPP, Vietnam-EU FTA, Vietnam-Korea FTA, etc. will come into practice, which will lead to a surge of FDI into Vietnam as well as boosting the demand for import and export of goods. This will be the driving force for the aviation service industry to continue to grow.

In addition, to keep pace with industry growth, ALS is also considering implementing M&A options to accelerate its operations.

International Air Transport Association (IATA) assessed that while passenger traffic increases at double-digit rates, demand for cargo transporting through airports is also expected to increase by 15 percent to 20 percent annually in Vietnam.

Besides from the domestic market, the demand for transportation of commodities from other Southeast Asian countries has the potential to turn Vietnam into a center of goods production and distribution for the whole area.