These firms — smarting from a 145% levy that had been in place since April 9 — had begun pivoting their supply chains. Already, freight has been directed to Vietnam before setting course for the US, though the Southeast Asian nation, also faces the risk of 46% duties on its US exports at the end of a global tariff pause in July.
Amid this uncertainty, Singapore’s largest privately held logistics and supply chain com- pany is rising to the challenge with its facilities in more than 100 cities across Singapore, Greater China, India, Malaysia, Thailand, Indonesia, the Philippines, Laos, Vietnam, Japan and South Korea.
“People like us become more important,” says YCH Group executive chairman Robert Yap.
“I can easily build 10% in one country, 20% in another country and 70% in yet another, or I can mix around. We can easily shift the supply chain because of our agility and network effect.”
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According to Yap, YCH is helping its clients — some of the biggest brands today — to reconfigure their supply chains as their “partner in crisis”.
“We have to pivot their supply chain effectively so that they can manufacture in Vietnam, for example.
Like today, we support Dell in manufacturing in India. We also support their manufacturing in China — in Chengdu, Xiamen and Kunshan.”
Yap, a second-generation leader at YCH, says: We are small enough to be nimble and move around, but we are big enough to be able to make a difference. That is what is interesting. Photo: Albert Chua/ The Edge Singapore
Yap says that, handling over US$50 billion ($64.9 billion) in inventory throughput annually, YCH’s value proposition is all about value-adding and helping clients to be efficient and nimble.
During periods of stability, cost was among the biggest considerations for firms when choosing a logistics partner.
In volatile times, however, YCH’s reach across Greater China and Southeast Asia is a coveted premium.
“You talk about Donald Trump today, does he create a headache for us? On the contrary, he creates opportunities for us,” says Yap, a second-generation leader at YCH.
“We are small enough to be nimble and move around, but we are big enough to be able to make a difference. That is what is interesting.”
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Commenting on how Trump’s return has changed YCH’s engagement with clients, the straight-talking Yap adds: “Under stable conditions, they said: ‘Can, but can you be cheaper?’ Walao eh! Do you want me because I’m good or do you want me because I’m cheap? You know, that’s always the question. But when these [tariffs] happened, [clients now say:] ‘I need you.’ There’s a difference already.”
Breaking ground
YCH celebrates its 70th anniversary this year and Yap’s calendar is filling up with the group’s expansion plans for the region and beyond.
Speaking to The Edge Singapore at YCH’s Supply Chain City along Bulim Avenue, Yap says similar “supply chain nerve centres” are planned in markets including Malaysia, Indonesia and India.
YCH will hold a groundbreaking ceremony for Supply Chain City Malaysia in Bandar Bukit Raja on May 29.
With a RM500 million ($151 million) investment by YCH, the approximately 7ha Supply Chain City Malaysia is the result of a strategic partnership with Sime Darby Property Berhad. Supply Chain City Malaysia is modelled after YCH’s eight-year-old facility in Singapore of the same name.
Located in the Jurong Innovation District, Supply Chain City sits on a sprawling 6.5ha plot, with a gross floor area of some 2 million sq ft.
The Singapore facility provides an idea of what its counterpart in Malaysia will look like.
The warehouse component features YCH’s patented Fusionaris design, which includes a 50m automated storage and retrieval system (ASRS) that can move 66,624 pallets with 110,000 sq ft of space.
Without the ASRS, YCH says it would have needed some 700,000 sq ft of built-up space, nearly seven times larger.
Adjacent to the warehouse is the eight-storey office component of Supply Chain City, with over 400,000 sq ft of office space and even a ballroom that seats 500.
Supply Chain City Malaysia will join YCH’s current facilities in Penang and Kuala Lumpur; YCH currently leases some of its warehouse space in Shah Alam, Selangor, from Mapletree Logistics Trust.
JS-SEZ to stop ‘losing’ customers
Yap, also the Singapore chair of the Malaysia-Singapore Business Council, says he has been a “strong advocate” for the Johor-Singapore Special Economic Zone (JS-SEZ) — and not just for closer economic ties between the two countries.
“Many customers come to us and say ‘Singapore is too expensive’. Unless they have that high value and the need for this connectivity, they will put their [goods] somewhere else,” says Yap.
“Malaysia has the conditions of cost advantage and more labour and so on, but they find Malaysia is not so efficient.”
Faced with inefficiency or high costs, some companies are skipping both countries entirely, says Yap.
“We are losing a lot of those kinds of big customers between Singapore and Malaysia.”
Yap says he accompanied Deputy Prime Minister Gan Kim Yong on a visit to Johor in April, where he found the Malaysian officials to be “quite into” the JS-SEZ.
The ball is now in Singapore’s court, says Yap.
“The trouble with Singapore is that we are afraid of the country being hollowed out. If this [JS-SEZ] becomes too good and becomes like Singapore, then who will come to Singapore? Everyone will go there.”
Yap urges both countries to find a deal that works for everyone.
“When they were configuring this [JS-SEZ], they were also looking at Singapore’s [interests]. I’m a Singaporean organisation, so I want what’s good for Singapore. My advice to them is to look at how both sides can negotiate an agreement in a way that doesn’t hollow out Singapore. That means our manufacturing here won’t go over to that side.”
The sweet spot is to find a way to lure companies that have decided this region is a non-starter.
Yap says both countries should figure out “how to ring fence” these firms.
“Hunt for those that skipped Singapore because of the high costs, [but] don’t want to go to Malaysia for whatever reason. Now, [with the JS-SEZ], we can pitch for that.”
The US tariff complications have sweetened the deal somewhat.
“It has become a better pitch,” he adds. “People are looking at where to relocate or locate their factories. I think this is a good time.”
For starters, Yap hopes the JS-SEZ can help facilitate “a more seamless flow” between Singapore and Johor, where “trucks can go up and down” easily.
“Imagine if they create a green lane to clear Malaysian and Singapore customs and immigration. That will be fantastic. I think that will happen. We are hoping for that to happen.”
SuperPorts
By virtue of their industrial uses, warehouses often appear large and unremarkable.
But Yap assigns YCH’s larger facilities specific names, including DistriCentre and DistriPark (Yap jokingly accuses former Economic Development Board chairman Philip Yeo of stealing these names decades ago). Supply Chain City, already a hallmark of YCH’s brand, will soon be bested by the definitive pièce de résistance of the group: the SuperPort.
YCH’s Vietnam SuperPort, a partnership between YCH and Vietnam’s T&T Group, began construction in 2021.
The first phase of Vietnam SuperPort, located in the northern province of Vinh Phuc, roughly 60km outside of Hanoi, has been operational since January 2023.
What makes a SuperPort?
Yap speaks of “multimodality”, or connection via rail, road, sea and air.
Yap explains that the 83ha Vietnam SuperPort is a dry port, which means it will be directly connected to the sea despite not being located on the seafront.
It will also boast an off-site air cargo terminal (OACT).
“If you want to ship via the Hanoi airport, just send it to our OACT. We’ll package it, we’ll prioritise it, we’ll create everything; we’ll go straight from the tarmac to the plane.”
Even before that megaproject is complete, YCH will break ground on another in Cambodia in July. YCH is also looking to replicate this concept in Indonesia, the Philippines and Thailand — “across Asean”, says Yap.
YCH is in talks with the governments of the latter three countries and hopes to reach agreements on all of them by 2030.
Waiting for a SuperPort to open, however, could take some time.
According to Yap, each SuperPort project requires an investment of about US$300 million and takes five to seven years to complete.
Domestically, YCH wants to help countries “grow without growing pains”, says Yap.
On the books, YCH’s projects are purely commercial, and governments are not co-investors.
“We don’t want the government to get involved because it becomes too long. A private sector-driven deal is better.”
Beyond YCH’s initial investment, however, the SuperPorts will need long-term financing.
The International Finance Corporation is one of Vietnam SuperPort’s key partners, providing technical, commercial and environmental expertise to highlight the project’s bankability.
The SuperPort vision originated from the Smart Growth Connect (SGConnectTM) project in 2018, when Singapore assumed the chairmanship of the Asean Business Advisory Council.
This initiative was further solidified through the November 2020 inauguration of the Asean Smart Logistics Network (ASLN), a collaborative platform with a shared goal of developing smart and sustainable advancement based on smart logistics infrastructure.
“Asean has this plan to try and connect all the Asean countries through smart logistics infrastructure.
We’re putting in SuperPorts all over to help achieve and realise that ambition,” says Yap.
Sustainability goals
Building a SuperPort is one thing, but ensuring it complies with a global sustainability push is another.
Vietnam SuperPort aims to become Southeast Asia’s first net-zero multimodal logistics port by 2040.
This will involve renewable energy installations (mostly rooftop solar photovoltaic systems), autonomous vehicles and electric vehicle (EV) charging stations.
YCH hopes this sustainability offering will attract customers with “higher expectations”.
“[This] not only leads to higher investment value, but also requires [a] greater economic aspect to support that investment,” reads a slide deck summarising YCH’s sustainability plans.
YCH plans to reach net zero by 2050.
By 2040, YCH aims to convert its entire fleet into “low-emission vehicles”, and the group has already brought in Singapore’s first electric prime mover truck.
To showcase the group’s sustainability im- provements, SuperPort Vietnam will include a 5ha “park within a park” concept that serves as a “demonstration piece” before sustainability features are rolled out across the facility, says Yap.
“This is a journey because sometimes, you must understand that we are a private company, so we must also be careful with the costs and the timing.
Too fast is not good, because there are not enough [EV] charging points, for example,” he adds.
“So, we have to pace the development and ensure it makes economic sense. Only then can it be sustainable.”
The group is working on its inaugural sustainability report, which is scheduled for release in September.
“We are doing it because we volunteered to do it,” says Yap.
No margin for error
YCH currently hires close to 7,000 staff in total, with about a tenth of that based in Singapore.
As trade tensions ratchet up into full-blown trade wars, Yap says he is competing with multinational firms that are “10 times bigger” than YCH.
“Those companies are trying to buy me over. If they fight with me and find that I’m a pain, they might as well try to buy me. But I’m not for sale,” he adds.
“I’m a legacy builder. I want to leave a strong Singapore brand that can fight with any of them.”
Not so for many other regional names, says Yap.
“The regional players have been gobbled up by Chinese giants ... I don’t want to entertain them, because we are not in that state. We’re not interested in that. We think we can grow on our own. We have a good customer base. We have good solutions. We still have a lot of innovative ideas. We haven’t played enough yet; the fun is just starting.”
Yap insists this “game” of logistics and connectivity is “very interesting”.
“[The] connectivity game is like one plus one equals 11. So, [it’s] very exciting. I’m still having my fun. Why should I sell or lease and then let shareholders come and tell me what to do?”
However, some of YCH’s peers have crashed out of the games.
Yang Kee Logistics made headlines earlier this year after its former chief executive accused United Overseas Bankof improper conduct, which he claims led to the collapse of his $500 million family-owned business.
In turn, the bank has said it will sue its former client, adding that Yang Kee first defaulted on its interest payment obligations to bondholders in 2018 and further defaulted upon maturity of the bonds in 2020.
Yap acknowledges that Yang Kee was “coming up quite fast” and competed with YCH at one point.
However, he claims Yang Kee employed many executives from global logistics giant DHL, which drove up staff costs and its prices.
“That part is not sustainable, because you cannot get your customers to pay you the kind of premium you expect for your higher cost of operation. You have to be a cost lead- er, no matter how, in this business.”
In logistics, profit margins are all based on efficiency, says Yap.
“It’s a very low single-digit, but you must achieve this single-digit margin, day in and day out. The moment you make a mistake, you lose money.”
REIT IPO? Still, Yap says the logistics business is “very scalable”.
“Everywhere you go, everyone needs good logistics and supply chain management. Whether you’re a growing country or a developed country, you will need good supply chain services. So it’s an evergreen industry, but margins are always very controlled.”
The promises of such a stable revenue model may entice investors, and Yap claims leaders from the local bourse are eager for YCH to be listed on the Singapore Exchange.
“Of course, they’re all waiting for me. We are a homegrown name. If I do it, it’s partly to allow the Singapore public to have a stake in our growth.”
However, YCH’s leaders “do not think it is necessary” for now.
“We are growing, and based on how we are growing, we think that a private organisation will be able to be more agile and quicker in the way that we are act- ing, to move faster. And because we are profitable as a company, we can get the investment we need from our partners.”
A REIT listing, however, could be more in line with YCH’s “asset-right strategy”, says Yap, and the group is “still considering how to parcel” its assets should this plan go ahead.
“We could do a pure Singapore REIT, we could do a regional REIT, we could do a REIT that’s all Supply Chain Cities — it’s easier to understand; one category, one segment — and [we could do] a REIT for the Super- Ports. Or, we could combine all [these assets], like a supermarket.”
The SuperPorts alone would be valued at “a couple of billion dollars”, says Yap.
“We are setting the stage for Asean connectivity ... so it is very scalable. I will create a REIT if we need the monetisation, but if it’s not organic, the way we grow, we don’t need to go and approach that.”
Eye on Middle East
Ramping up connectivity across Asean is not enough — YCH is also eyeing South Asia and the Middle East.
YCH first entered India in 2006, providing freight, customs clearance services and finished goods distribution.
Today, YCH has 65 distribution centres across India, says Yap, and the profitable market hires some 1,000 staff.
Should Yap’s plans materialise, an expansion into the Middle East would mark the group’s farthest foray.
“It is a different beast, but we have all the ingredients to replicate [our success] ... Of course, we will wait for the right time.”
Timing is everything, Yap stresses.
“In our business, if you are too early, it’s no good, because you’ll sweat ... But if you’re too late, [for] everything [that] you want to set up, you’ve got to pay double the price. Hiring people will also be difficult because things are already running.”
“Bitter first, sweet later” — Yap rounds up our conversation by reciting this Chinese idiom for the third time, urging business leaders to put up with the difficult tasks first before enjoying the fruits of one’s labour.
Trump’s tariffs, which have all but halted shipments in countless ports worldwide, are not an obstacle but an opportunity for YCH, says Yap.
“When you position a company for the long haul, adversarial situations like that are always an opportunity. Of course, you must be able to ride through this crisis at the same time.”
