Dagang Net eyes 9% revenue growth

Published by The Edge

Dagang Net Technologies, a subsidiary of Time Engineering Bhd, has forecast a 9% growth in revenue for 2006 driven by an expected increase in core business traffic and rollout of new value-added services.

For 2005, it is expected to achieve 6% growth in revenue to RM53 million driven by a projected increase in transaction volume of its existing core business — the Sistem Maklumat Kastam Dagang Net that enables the trade and logistics industry to have paperless transactions with the Customs Department.

This year, it has also implemented a new window — the e-permit application for other government agencies (OGAs) starting with the Federal Agriculture and Marketing Agency (FAMA) and Pesticide Control Board for imports, its chief executive officer Saifol Bahri Mohd Shamlan says. e-permit enables importers, exporters and appointed forwarding agents to apply for permits from OGAs online via the Internet.

It has identified some 20 OGAs from whom import and export permits are required before goods are allowed to be shipped out or brought into the country.

“It’s a value-added service to Dagang Net but it potentially provides more for our customers in terms of time and cost savings. It also improves trade efficiency and our national competitiveness,” he tells FinancialDaily.

“The service has shortened the approval time to half a day from two to five days previously. In certain cases, approvals were given within 30 minutes.”

Saifol says e-permit has the potential to boost Dagang Net’s revenue by 5% when it is extended to other major government agencies such as the Ministry of International Trade and Industry and Malaysian Timber Industry Board (MTIB), which have high volumes of permit issuance.

“We may need to invest about RM3 million to extend the services to the departments to either interface the OGA backend system to the Dagang Net e-permit engine or to another system to be hosted by Dagang Net.”

He says it will also need to hire more IT staff or outsource its IT services when it expands.

Saifol says the company is expected to come up with the standard e-manifest and extend the electronic K1 (import) and K3 (trade between Peninsular Malaysia and Sabah and Sarawak) submission system to ports and airports in Sabah and Sarawak, Kuantan, Ipoh, Lumut, Prai and Bayan Lepas next year.

“The Customs Department has given the go ahead to standardise the shipping document e-manifest (a complete list and description of goods that have been loaded into a ship and are on board) for the whole country.

“We understand that once the standard e-manifest submission is implemented at all ports and airports in the country, the Customs Department will then go ahead with the extension of the electronic K1 and K3 submission to ports and airports that have yet to implement it.”

Saifol says for 2006, the company plans to capture the upstream business of order fulfilment or supply chain management starting with the invoicing.

“In any trading scenario, there are always super buyers who obtain their supplies from various sources. We can provide the electronic invoicing system for super buyers to deal with their suppliers.”

The invoices could then be re-transmitted to the Customs Department, port, forwarding and shipping agents for the cross-border trade requirement, he explains.