Supermarkets and shipping lines appear to be mutually attractive industries with promising growth considering the latest surprising trade moves of major firms in both sectors in Europe and Asia.
Maritime Executive reported the latest announcement by Malaysian Bulk Carriers Berhad (MBCB), also known as Maybulk, that it intends to diversify into a grocery retail business. The shipping line, which describes itself as the largest bulk carrier in Malaysia, plans to form a collaboration to enter the retail sector.
MBCB plans to invest $12 million to open its first 15 supermarkets and 15 express convenience stores over the next 12 months. The shipping line has proposed a three-year collaboration with Tunas Manja Sdn Bhd (TMSB), which manages grocery stores in Malaysia under the TMG brand. MBCB will appoint TMSB as a service provider for the supply of merchandise and use its expertise to open stores, but it will license its own grocery store brand names.
This comes after German food retailer Lidl announced earlier this year that it was launching a shipping line called Tailwind Shipping Lines, in an attempt to improve control of the movement of its goods.
MBCB been seeking new strategic business opportunities to diversify its revenue stream to mitigate shipping business risks. The shipping line owns two Kamsarmax dry bulk carriers and operates a Supramax and Handysize bulker on a charter service. The firm is also engaged in ship management and previously operated tankers.
“The past few years have been challenging for Maybulk as its fleet size decreased following the sale of older vessels. Management highlights that they currently derive their revenues from the provision of freight services for charter, which is of course subject to fluctuations in charter rates that are beyond their control. After being profitable in 2018, the company suffered two years of losses, only returning to profitability in 2021 due to increased demand for commodities amid the global economic recovery,” Maritime Executive reported.
Maybulk noted in a stock exchange filing that following a strategic review of its direction, the firm “intends to diversify its existing business to include the grocery business in view of …the favourable outlook of the grocery retail industry”.
MBCB has forecast that the grocery business will contribute 25% or more of the net profits of the company in the future. The firm expects to obtain shareholder approval for the diversification during the third quarter of this year.
