SWIFT Haulage Berhad (Swift Haulage), which is currently undergoing book building for its upcoming initial public offering on Bursa Malaysia, will be utilising part of the RM161.9 million it expects to raise from the exercise to fund the building of a new warehouse in Port Klang Free Zone (PKFZ). 

Apart from the new warehouse in PKFZ, Swift Haulage will also be utilising part of the proceeds to purchase 30 new prime movers, CEO Loo Yong Hui tells The Edge in an exclusive pre-IPO interview last Wednesday. 

The measures are part of the group’s plan to further consolidate its position as the largest haulage service operator in the country. 

Swift Haulage currently operates 1,546 prime movers, 5,518 container trailers, 811 box or curtain-sider trailers and 53 trucks. It also has 849,371 sq ft of warehouse space.

As part of its flotation exercise, Swift Haulage will issue 157.14 million new shares and offer up to 157 million existing shares for sale at an issue price of RM1.03 apiece. Institutional investors will be offered 275.2 million shares and among those who have taken up almost 60% of the shares offered are AIA Bhd, AmFunds Management Bhd, AmIslamic Funds Management Sdn Bhd, Areca Capital Sdn Bhd as fund manager of Areca Dynamic Growth Fund 10 and Kenanga Investors Bhd. The others include HSBC Global Asset Management (Hong Kong) Ltd, Nikko Asset Management Asia Ltd, UOB Asset Management (Malaysia) Bhd and Zurich Life Insurance Malaysia Bhd.

The slew of institutional investors who have taken up the offer shares underscores the strong appetite for Swift Haulage’s public offering. 

Considering that it has only been around in its current form for a decade, Swift Haulage’s growth has been impressive. The group was initially the haulage arm of Yinson Holdings Bhd before it was sold to the current major shareholder, Persada Bina Sdn Bhd, in 2011 for just RM1.

“Swift started when the shareholders took over Yinson Haulage from Yinson Holding back in 2011 and we started fresh in container haulage transportation. So we started with the disposal of all the old trucks of Yinson Haulage and bought new prime movers. “We started fresh, with new set-ups and management. We changed from Yinson Haulage to Swift in 2012. It was a loss-making company with negative equity, but within the first year, we turned it into a profitable company,” says Loo.

Yinson Haulage’s old prime movers were also disposed of and new ones acquired. Swift now only owns and operates continental-branded prime movers such as Mercedes and Volvo as the running costs are lower than secondhand trucks. Loo indicates that this has been Swift Haulage’s recipe for success all these years, as it has managed to keep operating costs low and margins high. 

According to Swift Haulage’s IPO prospectus, gross profit margins stood at a healthy 30% level in the financial years from 2018 to 2021. Pre-tax margins were at the high single-digit and low-teens band. “Basically, to run a haulage business, cost and productivity are important. Everyone pays the same for diesel, the same commission to the drivers and toll. What we can control is the type of truck used, so that is why we bought new trucks and only continental trucks.