SG Holdings, the parent company of leading Japanese carrier Sagawa Express, has unveiled a newmedium-term strategy focused on international expansion and development of its currently small
logistics business. Sagawa Express competes with Yamato Transport and Japan Post at the head ofAsia’s largest express parcels market.Following its restructuring into a holding group in March 2006, SG Holdings has now announcedits future strategy with a 10-year “management vision” and three periods of three-year medium-termtargets. Over the full 10 years, it aims to create a growth-based business model, then grow thesales and profits of each separate business segment, and finally achieve group-wide synergies.
Under its “First Stage Plan”, covering 2007-2009, SG Holdings aims to develop logistics asthe secondary core business alongside the delivery business, and start to build up third and fourthcore business areas through organic and external growth.
Logistics will be expanded by developing 3PL services, expanding foreign operations andpromoting the SGX express courier service. But the Sagawa Express core delivery business is alsoexpected to grow steadily due to the improved Japanese economy and rise of online shopping, itpointed out.
The group recently merged its separate international express and international logisticssubsidiaries into one company, Sagawa Global Logistics. Last December the group linked up withChina Post to provide express deliveries between the two countries. It has also launched domesticcargo services via its subsidiary Galaxy Airlines, which is code-sharing with Japan Airlines.
By fiscal 2009, the group aims for sales of one trillion yen and an operating profit of 45billion yen. Logistics is planned to grow from 8.3% to 10.2% and other businesses from 5.1% to 6.8%of total sales in 2009. In the year ending March 31, 2006, the company had consolidated turnover of824 billion yen and operating profits of 39 billion yen.
