Traders were surprised by an unexpected joint cooperation between Origin Property Public Company Limited (ORI) and JWD Infologistics Public Company Limited (JWD), as two leading companies from different industries, ORI as a property developer and JWD as a logistics service provider, have teamed up to settle a company called Origin JWD Industrial Asset Company Limited in order to advance in real estate development focusing on logistics related assets.
According to shareholding, each of the firms will hold 49.98% share in the new joint venture.
But…what are the logistics related assets..? From the context, we assumed that this type of business may relate to properties or assets in the form of warehouse, distribution center, storehouse and factory.
As they have expertise in different fields, the synergy between ORI and JWD will complement each other, a know-how of ORI will transfer to JWD in terms of design and construction technique for warehouse-distribution center building and vice versa.
JWD specializes in logistics and supply chain solutions service, but lacks knowledge in building warehouses. On the other hand, ORI conducts a property development business including condominiums and houses.
To partner in business may be the best option amid economic uncertainty and Covid-19 crisis, in order to minimize business risks and avoid failure. Well…nowadays two heads are better than one…like the iconic slogan “Together We Are Stronger”.
Moreover, the new joint venture will also boost JWD and ORI’s revenue even though slightly. As of the end of September 2020, JWD’s income was 2,934 million baht and net profit was 214 million baht, however, normally, JWD’s full-year revenue is average at 3,000 – 4,000 million baht.
Meanwhile, the revenue of ORI for the first nine months of 2020 was 8,690 million baht and net profit was 2,019 million baht, with an average of full-year income at 2,000 – 3,000 million baht. Despite the new joint venture company will generate a small revenue to ORI, it is expected to be a new company’s recurring income.