Taiwan’s ALP – automation answer to logistics sector’s labour woes - MIDA | Malaysian Investment Development Authority
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Taiwan’s ALP – automation answer to logistics sector’s labour woes

Taiwan’s ALP – automation answer to logistics sector’s labour woes

21 Mar 2022

As wages in Malaysia’s logistics industry have reached the cost-effective threshold equivalent to investing in automation, the implementation of automated equipment and digital systems can not only slash labour costs but can increase efficiency and profitability as well, according to the CEO of Taiwan’s Ally Logistic Property Co Ltd (ALP), Charlie Chang.

ALP, the largest warehousing infrastructure developer in Taiwan, will start construction of its first logistics park with smart warehousing facility in Malaysia called “OMega” in Bukit Raja, Klang, in April, as part of its plan to invest US$1 billion (RM4.2 billion) in the country to develop five OMega smart warehouses across Malaysia.

“ALP is looking at key hub locations across Kuala Lumpur, Johor, and Penang to build a logistics network infrastructure for Malaysia. This projected trajectory for Malaysia is similar to ALP’s growth in Taiwan where ALP’s current investment in Taiwan is over US$800 million assets, encompassing six warehouses totalling 570,000 square metres,” Chang told SunBiz.

He said the logistics industry faces labour shortages, increasing labour costs and fulfilment complexity. Automation and technology solutions are the next viable step of development.

“Automation offers a new way to operate using a combination of a skilled and semi-skilled workforce. The increasing complexity of logistics operations, market uncertainty, and high reliance on human labour have led the logistics industry towards smart logistics solutions,” Chang said.

He said ALP has chosen Malaysia to grow its presence in the region given the country’s infrastructure which offers room for disruption and optimisation.

“Besides, ALP has several multinational clients that require our services in Malaysia. ALP’s advantage for expansion in Asean is that we understand our current clients and their way of operating, thus being better able to cater to their needs and align with ease within their process.

“The logistics industry is fragmented at the global level. The pandemic has disrupted the supply chains when e-commerce grew at an unprecedented rate. Hence, the logistics industry is booming due to the higher demand from e-commerce,” Chang said, adding that ALP’s goal is to achieve a seamless omnichannel for the business-to-consumer (B2C) market.

Chang hopes ALP can replicate its successes in Taiwan in Malaysia as they have many similarities.

“What we have done in Taiwan we will bring it here, including providing holistic solution to grow smart warehousing and to incorporating advanced technology to the logistics industry.

For example, Costco and Carrefour are proficient in handling B2B logistics. However, when it comes to B2C logistics, the technology needed for integration, efficiency, transparency and other factors can cause a bottleneck on their logistics,” he said.

ALP addressed their pain points and used smart warehousing strategies to help them through that complicated process to improve delivery and ordering processes for their clients.

“That was how we created ALP’s first-generation e-commerce hub. Thereafter, we developed a total solution for our second-generation product, OMega.

“ALP understands the need for larger-scale warehousing that can integrate automated solutions to accelerate the supply chain. We have advanced the logistics industry in Taiwan from one that was fragmented to now highly automated smart warehousing industry,” Chang said.

ALP’s first OMega in Malaysia is a 27-acre logistics park scheduled to be completed in 2024. An OMega costs US$180 million (RM755 million) due to the size and the investment for the required technology. ALP expects to create about 500 jobs in Malaysia with OMega Bukit Raja and an estimated 3,000 jobs in total with its additional warehouses.

“Malaysia offers up greater economies of scale and a more cost-effective macro-economic ecosystem with its larger population as well as better expected operational expenditure and capital expenditure,” Chang said.

In Malaysia, ALP will target the big brands first, after that it will expand to distributors requiring solutions for client fulfilment.

Source: The Sun Daily