Thailand Post is scheduled to form a joint venture with a Chinese logistics company in the second quarter of next year as it works to increase its volume of cross-border logistics transactions between the two nations.
According to Thailand Post president Dhanant Subhadrabandhu, the state enterprise and a Chinese logistics firm have been in talks regarding the details of the joint venture, with negotiations described as more than 60% complete.
In principle, Thailand Post will hold a 25% stake in the joint venture which should be established in the second quarter of next year, he added.
He said that owning only a 25% stake in the initial phase eases the way for the joint venture's formulation.
As Thailand Post is a state-owned enterprise, it will be required to go through a long approval process if it wants to hold a large proportion of shares in a joint venture company with a private company, especially a foreign company.
Mr Dhanant said the formation of the joint venture is another effort to drive growth of Thailand Post's international express service, propelling businesses towards the global market.
The company is on a mission to become Asean's most trusted brand in the next three years.
Thailand Post commanded the biggest share of the domestic logistics service market last year at 27%, while the rest is dominated by foreign logistics service providers, especially those from China.
Its logistics business generates around 46% of total revenue, followed by the postal group at around 33%, international service group at 13%, retail business group at 5%, and the rest from the others.
"The joint venture will be our core facilitator that will draw transactions of logistics services for goods and products from China to the local market via the joint venture, and the local products to the China market, too," Mr Dhanant said.
Thailand Post reported revenue of 15.8 billion baht for the first nine months of this year, with higher domestic transport volumes.
The Express Mail Service posted growth of 8.07% year-on-year, driven by customer confidence in the service, its fast delivery, and a proactive strategy aimed at generating revenue from digital and physical services to attract existing and new clients.
The transport and logistics sector contributed the most, accounting for 46.5% of total revenue, representing growth of 3.34% year-on-year. This aligns with economic growth in the retail and e-commerce sectors.
Mr Dhanant said Thailand Post's efforts to enhance the customer experience across all its business groups led to domestic parcel service growth of 18.5%, reflecting higher consumer confidence, as its 2024 brand trust survey found a 91.9% confidence level in the state enterprise.