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Japan's Sankyu to build logistics center on Malacca Straits

Facility targets Japanese companies looking for fast access to Southeast Asia

Port Klang is a key shipping point linking East Asia with the Middle East.   © Getty Images

TOKYO -- Japanese logistics company Sankyu will establish a distribution center in Port Klang on the west coast of Malaysia in 2021.

Port Klang is Malaysia's largest trading port. Sankyu's facility will help Japanese companies penetrate Southeast Asian markets and serve as a transit point for maritime shipping between Japan and the Middle East.

The facility is expected to generate 2.5 billion yen ($23.8 million) in revenue in the first three years.

Sankyu will set up a local subsidiary to run the facility, which will cover about 20,000 sq. meters. Regional Japanese companies producing apparel, daily goods and petrochemicals are target users of the center.

Companies will be able to temporarily store goods at the facility before shipping to neighboring countries on demand. It takes about one month to transport goods from Japan to Southeast Asia by sea. The distribution center will cut this to as little as a week, reducing time and transportation costs.

The company will also facilitate customs procedures and aims to secure contracts with about ten companies.

Port Klang sits on the Straits of Malacca, which connects the Middle East and East Asia, making the planned center a hub for shipments to the Middle East and Northern Europe.

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