Pt Mulia Bosco Logistik commonly known as MGM Bosco, has chalked out an ambitious plan to grow almost three folds in capacity in the next few years, with an investment plan of more than $35 million in the next two years.
Saratoga-backed MGM Bosco, is a cold chain logistics and warehousing company which has warehouses to store cold products, and trucks which it uses to deliver good and products to different destinations.
In January 2016, Hadipranoto family-owned MGM, one of Indonesia’s leading refrigerated trucks company, had formed a joint venture with Saratoga Capital-owned Bosco, which owns warehouses, to form MGM Bosco.
Saratoga Capital is one of Indonesia’s leading private equity companies. It focuses on consumers, infrastructure and natural resources sector, and recently invested in sectors like logistics, healthcare, consumer etc.
MGM Bosco is one of Saratoga’s special investments, which will help the company support the growth of consumer and infrastructure in Indonesia.
“Logistics and warehousing is a niche, exciting sector to be in today. It is a sector with huge potential in Indonesia. Our capacity has doubled in the last one year. Our warehousing capacity which was 5,000 pallet positions, has now increased to 14,500 pallet positions, after the addition of our 9,000 pallet positions, thanks to our recently inaugurated warehouse in Sidoardjo in Surabaya ,” says Kemal Mawira, MGM Bosco’s Business Development Director told DEALSTREETASIA in an interview.
Kemal Mawira is also a Senior Portfolio Monitoring and Risk Manager, for Saratoga.
While their Jakarta and Surbaya warehouses have started operations, MGM Bosco is planning to build its 10,000 pallet, phase 1 warehouse in Bekasi, outside of Jakarta, with an estimated investment of more than $35 million.
The company also plans to increase its number of trucks by 100 every year, taking the total number to around 500 by end of the current year.
“Last year the number of trucks also increased by 20-30 per cent annually. We are planning to have total 45,000 pallet capacity by the end of two years, almost three times higher than the current pallet capacity, with an investment of trucks and warehousing exceeding $40 m in the short term”, Michael D Hadipranoto, President Director, MGM Bosco told DEASTREETASIA.
The company is also upbeat about their new offerings viz, third part logistic services, in which they provide both the services to one single client. Some of larger clients of the company include Unilever and Campina ice cream.
The company plans to soon expand to 3-5 other cities, like Medan and Makassar. It is also working with a partner to provide sea refrigerated transport logistic services.
With its aggressive growth plans in place, MGM Bosco is also planning an IPO by 2020.
While the cold chain warehouse and logistics, is a very niche sector, with only 2-3 players competing in this market, MGM Bosco maintains that it will not compromise on quality, even if it means, that they may have to offer slightly higher prices than the market. “We ensure, minimum waiting time, accurate temperature, and there is no inventory stock differential”, said Kemal.
They are also trying to ramp up their technology to create an added edge over the other players. From automated warehouse plans, to further enhancing their logistic system, to plans of engaging with logistics e-commerce platforms that help doing matchmaking for people who need delivery from exotic locations, the company is pushing itself to maintain their competitive advantage over the others.
With Indonesia’s location advantage, dense population, and growing economy, many Japanese players are also eyeing this sector very actively, and it may just take a while before this sector sees its first big investment.