Slovenian Post has become the country’s third-largest logistics company with the acquisition of publisher MKZ’s logistics network for about €13 million under its diversification strategy.
The investment is part of the postal operator’s strategy to develop and grow its logistics business, with the aim of becoming one of the leading providers of trade logistics and supply chain services in Slovenia and the wider region.
“With the purchase of MKZ’s logistics network, Pošta Slovenije becomes the third largest logistics provider in Slovenia in terms of warehousing and storage capacities. We will offer our customers comprehensive logistics services and exploit free capacities, both at Pošta Slovenije and in MKZ’s logistics network,” said Pošta Slovenije’s General Manager Boris Novak.
MKZ president Peter Tomšic emphasised: “The transfer of the logistics network to Pošta Slovenije will allow the Mladinska Knjiga Group and Mladinska knjiga Založba to consolidate their business portfolio and focus more intently on their core activities of publishing, book trading and complementary trade activities. We are pleased that Pošta Slovenije was selected as a strategic partner to take over the logistics network, as logistics represents one of its core activities. Pošta Slovenije has also been a reputable, important and trustworthy partner of Mladinska knjiga for decades.”
Given the decline in revenues from traditional postal services, Pošta Slovenije has invested heavily in the development of new services and the updating of existing services in recent years. Growth potential has been seen in the logistics and supply chain services segment, and is crucial to its further development.
Pošta Slovenije said it currently has significant capacities in the distribution segment, but previously lacked such capacities in the warehousing and trade logistics segment. In order to offer its customers comprehensive logistics services and extend the supply chain, Pošta Slovenije first had to secure increased warehousing capacities.
Based on in-depth analyses, Pošta Slovenije chose to purchase MKZ’s logistics network instead of building its own warehousing capacities. The aforementioned network functions within MKZ as a profit centre (MK Logistics), and provides logistics services for MKZ and for other customers, while generating a profit. Moreover, the location of MKZ’s logistics centre in Ljubljana includes land on which additional warehousing capacities can be built in the future. This investment, which Pošta Slovenije will finance entirely from its own resources, will facilitate the exploitation of capacities both at Pošta Slovenije and in MKZ’s logistics network.
Pošta Slovenije has established the subsidiary PS Logistika in order to provide a comprehensive range of logistics services. The subsidiary will take over the MK Logistics profit centre on 1 October of this year and all 57 employees from MKZ’s logistics network.
The purchase will result in the realisation of the synergies of both companies in terms of their capacities in the area of distribution and transport. Pošta Slovenije can satisfy MK Logistics’ needs in the delivery of small mail items, as the former has a highly developed distribution network. At the same time, MKZ’s logistics network has significant warehousing capacities at its location in Ljubljana that Pošta Slovenije will be able to use to warehouse large mail items such as spare parts for the car industry and mass goods on palettes.
Market conditions dictate the further development of postal-logistics operators and their services, both across Europe and in Slovenia. Pošta Slovenije is expecting a 15% decline in revenues until 2017 due to the declining number of traditional postal services. Pošta Slovenije began rationalising the postal network in previous years with the aim of ensuring a stable financial situation for the entire Group. Similar to previous years, Pošta Slovenije will continue to invest in the development of new services to ensure financial stability. Those new services will help offset the drop in revenues due to the decline in traditional postal services.
“Pošta Slovenije estimates that it will generate around €5 million in annual revenues by taking over MKZ’s logistics network”, stated General Manager Boris Novak, who added that this move will partially offset the drop in revenues the company has experienced due to the sustained drop in the number of traditional postal services.
The development of Pošta Slovenije continues to be geared towards package and information services, where growth is expected in the future. Pošta Slovenije is also accelerating the development of electronic services, direct marketing, and postal outlet and online store services. It continues to strengthen its position in the supply chain logistics segment and in the morning delivery of newspapers and magazines.
