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SATS Ltd’s Chief Executive Talks About Its Strengths, Acquisitions, And The Most Important Thing For The Long Run

Source: SATS

SATS Ltd  (SGX: S58) released its latest annual report less than three months ago. The annual report could be a good place to learn more about the company.

The latest report included an interview with SATS’s chief executive Alex Hungate. He talked about a range of topics, and I picked out three snippets which may be of interest to investors.

The strength of a network

As a brief background, SATS has two major business segments, namely, Food Solutions and Gateway Services. The first division covers airline catering, food distribution, industrial catering, and other services. Meanwhile, Gateway Solutions provides ground handling services of passengers, flights, and cargo.

The plethora of businesses SATS is in may seem daunting for investors to understand, but Hungate explains how the different parts come together:

“SATS has the largest Food Solutions and Gateway Services network in Asia, with presence in 51 cities and 12 countries across the region.”

The vast presence across the region has benefits for SATS. He explains:

“At one level, this gives us a marketing advantage as we sell and support our aviation and non-aviation customers…

…Our Food Solutions customers can tap into culinary expertise from chefs from across the world. They work closely with each other until they can faithfully reproduce authentic dishes for our airline customers who are proud of their national dishes both outbound from their home base as well as inbound.”

Hungate also talked about how the network allows SATS to serve customers for end-to-end travel in a seamless manner. This extends to cargo with special requirements as well:

“… [F]or airfreight with special requirements, like temperature, it means that we can handle it with higher quality than our competitors.”

On SATS’s acquisitions

SATS has been actively signing partnerships with a number parties in the past few years. Hungate gave some perspective on this:

“While our aviation business in Singapore remains a pillar of strength, we see significant opportunities in the growth of travel and eCommerce as well as the increased demand for safe, high quality food from the burgeoning urban population in Asia.

We are seeking to get more exposure to these opportunities by building up into adjacent businesses and building out geographically in the region.”

Some of SATS’s recent partnerships include joint ventures with BRF and Wilmar International Limited (SGX: F34). You can read more about these partnerships here.

The most important thing

Hungate also talked about the future of SATS:

“The success of SATS in the long-term is in the hands of our people. It is their passion to delight our customers over the decades of this Company’s history that powers our brand and reputation.”

Hungate paid tribute to the staff at SATS. He felt that it was their efforts that have put SATS in a strong financial position to be able to grow organically and through acquisitions.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.