TPL Trakker’s Middle East subsidiary showing impressive growth: CEO

KARACHI: TPL Trakker’s (TPLT) subsidiary in the Middle East has shown significant growth of 40% and is proving to be an important part of the company despite having a comparatively low workforce of around 35 people, according to company’s CEO Harris Jamali.

“TPLT’s Middle East subsidiary has been earning good foreign currency revenue,” Jamali told Business Recorder in a recent interview. “It works closely with Dubai police.

“The Middle East business showed 40% growth in the first half (of fiscal year 2023),” said Jamali, who joined TPLT in November 2022 as CEO. “And revenues are increasing.”

The next best thing that worked for TPLT is Internet of Things (IoT), he said.

“IoT growth is 12 times year over year because the base is small.

“We now have some big clients, as their fuel pain points have been increasing. IoT was launched two years ago.”

“The industrial IoT and industrial solutions have a huge scope. The high price of fuel nowadays has forced companies to find ways to reduce fuel consumption and reach higher levels of efficiency.

“Around 30% of TPLT’s telematics solutions are used by enterprises.”

TPL Vehicle Tracking (Private) Limited was incorporated in Pakistan on December 27, 2016. Its name was changed to TPL Trakker (Private) Limited next year. The Company is a subsidiary of TPL Corp Limited and TPL Holdings (Private) Limited is the ultimate parent company.

The principal activities of the company include installation and sale of tracking devices, vehicle tracking and fleet management services.

Startups – the newbies on the scene

Jamali said TPLT saw startups entering logistics space as an opportunity, and they were working closely with them.

“For the hardware components, startups are fully reliant on us.

“They bring different things to the table, and are complementary. Inefficiency is huge if partially-filled containers move from one city to another. Right now, from all over Pakistan, trucks come back empty from Lahore.

“They help with bringing efficiency to logistics, and eventually it will bring pricing transparency (in the sector).”

Valuation: startups vs listed company at PSX

Jamali says there’s little to compare between a startup’s valuation and market capitalisation of a listed company.

“The stock market is a completely different topic,” he said when asked to comment over startups’ valuations in comparison to companies listed at the PSX.

“It’s frustrating that the share price is not reflective at the corporate level.

“Compliance has a cost. Presently, valuations are not reflected at the stock market. Therefore, companies are buying back their shares.”

Meanwhile, talking about startups in the country, Jamali said risks associated with Pakistan will weigh down on the sector.

“Airlift managed a $300–400 million valuation. You will not find companies of this valuation level at the stock exchange. The Daraz deal was worth $150 million.

“But the problem is that it (high valuations) distorts the market if you don’t have a roadmap and the talent to grow into this valuation.”

Supply-chain efficiency

Jamali said trucks travel between 1,200km and 1,500km per month on an average of 40,000 corporate vehicles under TPLT watch.

Overall, there are between 200,000 and 300,000 trucks in Pakistan.

“TPLT provides up-to-date data on oil, brake oil, and tires, which is available for the clients to keep a check on.”

The contemporary supply chain requirements are now making companies like TPLT more relevant.

“If you don’t have a dashboard, you don’t have visibility, and big companies won’t hire your services. Now every carrier knows that if you are registered on the customer’s system, then you will get a route.”

Startups entering the logistics business also make clients install a dashboard.

“Transporters want to play with every commodity, so fixed costs remain covered. Trends help clients, such as expected road time. If you tell clients about some roadblocks, it is valuable for them.”

Transport policy needed to galvanise SMEs

Jamali lamented the lack of a transportation policy in the country.

“A smooth supply chain can bring down costs significantly. The warehouse system is totally broken.

“Transport policy would give big macro views, such as ports and dry ports. SMEs will be galvanised by the transport policy. Roads will be improved. The fun part is that TPLT has surveyed more roads than the government.

“It shows the immense need for a policy. Although oceans are the cheapest, the movement of goods is restricted from port to port. Airfares are high, and the main game that brings efficiency is road to road network.

“The overall supply chain needs to be improved in the country.”

Jamali said it is the unit economics that matters.

“Fuel bills can be optimised 50% by route planning and removing road inefficiencies. Our maps entity also offers smarter routing options.”

Citing an example, Jamali said that there was a government entity whose fuel bill was reduced from Rs20–25 million to just Rs 4 million.

Meanwhile, TPLT is also thinking beyond roads as well.

“We are working with railways and heavy locomotives coming from China.”

Traditional tracking business

Jamali said TPLT remains the market leader in the country, but a slowdown is being witnessed in the industry.

“We track 100,000 to 150,000 cars. Not everyone is interested in installing tracking devices.”

The company’s business is based on 60% car-tracking, while 40% is corporate fleet, which is increasing.

“TPLT has around 40–45% market share in the tracking business.

“In over 90% of cases, TPLT reports recovery within a month. Around 20–25 cases are reported every month from all over Pakistan. The majority is from Karachi, Lahore, and Islamabad.”

Jamali said industrial slowdown is causing some disturbance, but TPLT is looking to keep its revenue intact by “offering value-added analytics for existing customers”.

“Fuel dashboards are in demand, even at an individual level. Baby steps are needed towards technological advancement.

“New sales have had an impact. Telematics year over year is flat. However, we have achieved that by maintaining prices. But we are now facing pressure internally for price increases because our costs are also dollar-linked. The GSM costs of telecom companies are increasing, and at some point we will also cave.

“Overall, since the business is tech-based, we have seen 20–25% growth. And if we keep maps aside, the growth is about 30%.”

Copyright Business Recorder, 2023