Saturday, May 7, 2011

Pos to Defend Mail Business, Eyes E-mail Project

Friday May 6, 2011
By JEEVA ARULAMPALAM
jeeva@thestar.com.my


KUALA LUMPUR: Pos Malaysia Bhd will defend its government-related mail business as it discusses with government officials on how it can participate in the recently-proposed 1Malaysia e-mail to be implemented by Tricubes Bhd.

Should the postal services company fail to inch its way into this project, it is prepared to roll out its own e-commerce initiatives that will target government as well as commercial entities as the e-commerce pie continues to grow bigger, according to Pos Malaysia group managing director and chief executive officer Datuk Syed Faisal Albar.

“We have been working on e-commerce initiatives, such as online shopping portal posme.my, but we have also taken the cue from the Government to deepen e-government service and have worked on it as we know that it would be a significant threat to physical mail business,” he told reporters after the company's shareholders meeting yesterday.

Syed Faisal confirmed a StarBiz report last week that Pos Malaysia would see mail volumes drop further as the 1Malaysia e-mail proposal eats into the former's government-related mail portfolio.


Pos Malaysia Bhd group managing director and chief executive officer Datuk Syed Faisal Albar (right) and group chief of corporate service Datuk Jezilee Mohamad Ramli (left) speaking to reporters after the company's annual general meeting on Thursday. - Starpic by M. Rajan

“Since the project has been awarded to Tricubes, we would like to engage with both Pemandu and Mampu to understand this project and explore ways of how Pos Malaysia can play a role in this project,” he said.

“We have formulated a good plan, which includes an official inbox as we are in the delivery business, be it for digital and physical, and will table it to Pemandu and Mampu. There is no plan to charge the public but we also do not want to cannibalise our physical mail so whatever charges (imposed on the sender) will have to be reasonable to us.”

Pos Malaysia's government mail business accounted for some RM20mil in revenue from its total mail business revenue of RM624.3mil made last year.

Syed Faisal said Pos Malaysia, which has 700 post offices nationwide, was keen to develop all its land parcels, provided the amendments to the Federal Lands Commissioner Act were made. Currently, the postal services company can only carry out postal operations on these land parcels due to the Act's legislation.

“For instance, we have the general post office in KL centre built some 30-40 years ago. It is dynamic in terms of location and we can seek further value creation (by redeveloping the property). If we are allowed to re-develop, we certainly don't have the skill sets to re-develop ourselves but we would look elsewhere for the skill sets required,” he said.

Meanwhile, Pos Malaysia has not engaged with DRB-HICOM Bhd on the expected synergies that would arise from the latter emerging as a major stakeholder in Pos Malaysia or was it privy to DRB-HICOM's business proposal for the postal services company.

“All parties are observing the fact that the sale has not been consummated yet. There are certain conditions that have to be met between Khazanah (Nasional Bhd) and DRB-HICOM and some of it is beyond the control of both of them. Only when it is finalised and concluded, then we will engage with each other,” said Syed Faisal.

Government-investment arm Khazanah announced last month that it would sell its 32.21% stake in Pos Malaysia to DRB-HICOM for RM3.60 per share or RM622.8mil in total. The deal is expected to be completed by end-June and the conditional offer price of RM3.60 per share is subject to the variation in the use of 16 plots of identified lands owned by the Federal Lands Commissioner and leased to Pos Malaysia.

If the terms of the lease cannot be amended to include commercial use by year-end, then DRB-HICOM would be refunded 10 sen per share or RM17.30mil.

Analysts said a key reason for DRB-HICOM clinching Khazanah's stake in Pos Malaysia was because tie former owned Bank Muamalat Malaysia Bhd, and post offices could act as a financial agent and benefit the rural folk.

Currently, Pos Malaysia has already tied up with RHB Bank Bhd and Malayan Banking Bhd (Maybank) to offer financial services in selected branches.

“We will continue to respect whatever agreements we have with RHB and Maybank as we started our share banking services with them two-and-a-half years ago. If there are future plans (on Bank Muamalat), it will have to be brought to the Pos Malaysia board and decided upon,” said Syed Faisal.

http://biz.thestar.com.my/news/story.asp?file=/2011/5/6/business/8616781&sec=business

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