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Heavylift operations Photo from www.royalcargo.com

Project cargo and heavylift operations contributed the bulk of earnings i 2013. Photo from www.royalcargo.com

The Royal Cargo Group of Companies achieved higher profits in 2013 and is optimistic it will exceed last year’s earnings after investing in new equipment.

In an interview with PortCalls, Royal Cargo chief operating officer Elmer Sarmiento said group turnover in 2013 reached P3 billion.

The bulk of earnings the previous year came from the project cargo and heavylift business. It accounted for P1.1 billion of combined income, a 41% increase from 2012, mainly due to serving the Petron refinery project in Limay, Bataan.

Net income from the project cargo and heavylift division alone reached almost P300 million, said Sarmiento.

The company has two ongoing wind power projects in Ilocos Norte. The first is an 87-megawatt (MW) wind farm being put up by Vestas for Energy Development Corp. in Burgos, where Royal Cargo does erection work. The other is an 81-MW wind power plant being installed by Siemens for UPC in Pagudpud.

Royal Cargo set down roots in the Philippines when German logistics and forwarding company Hermann Ludwig GmBH established a local office in 1975, assigning Michael Raeuber as station manager.

In 1978, Hermann Ludwig became Royal Cargo Corporation with Raeuber as managing director, a position he held for nine years until he became company president.

In 2001, Royal Cargo Combined Logistics, Inc. was formed, led by Sarmiento. Raeuber transferred from DHL in 2007 and returned to head the company.

 

Expanded services

The business has expanded into freight forwarding, cold chain logistics, warehousing and distribution, trucking, customs brokerage, consolidation, liquid solutions, crane rental, express clearance facility, life solutions logistics, and even business process outsourcing.

But Sarmiento said the core businesses are still freight forwarding, contract logistics, and project cargo and heavylift.

Royal Cargo has also ventured into clinical trials and pharmaceutical warehousing, two businesses they plan to expand because the market is “booming,” said Sarmiento.

The group recently bought US$4.5-million worth of new equipment, including 16 lines multi-axle trailer, cranes, tele-handlers, two heavy trucks, five prime movers, blade trailers, and various small equipment.

It currently deploys about 10 cranes. Sarmiento said Royal Cargo has erected new gantry crane and rubber-tired cranes at the Manila South Harbor.

Its contract logistics is being expanded with a proposed north hub that will offer dry and cold storage to clients north of Manila. Its south hub is currently located along SLEX in Laguna.

For the overseas market, Royal Cargo is gearing up for regional expansion in preparation for the Association of Southeast Asian Nations’ (ASEAN) economic integration in 2015.

The company already has regional offices located in Cambodia, Singapore, and Vietnam. Group president Raeuber is looking at setting up other branches in Malaysia, Thailand, and Indonesia.

Outside of Southeast Asia, the company has branches in Hong Kong, Shanghai in China, Germany, the United Kingdom, Palau, and Guam. “The only way to expand is to go abroad because the Philippines is now a small country for us,” Sarmiento said.

Earlier plans to develop the Manado-Davao-Zamboanga triangle and link it to the ASEAN have been scuttled.

Sarmiento said all of the group’s businesses have been integrated into one IT platform since the first quarter of this year. –– Roumina M. Pablo

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