Samsung SDS, Holding 4 Trillion Won in Cash, Accelerates Investment Moves

[Asia Economy Reporter Kang Nahum] Samsung SDS has embarked on a full-scale investment drive to advance its cloud business and logistics platform business. The company aims to leverage over 4 trillion won in cash assets for mergers and acquisitions (M&A) to become a global major platform logistics company.

Samsung SDS announced on the 5th that it made an equity investment in the U.S. logistics startup 'Vizion' through the Samsung Venture Investment Corporation (SVIC).

Vizion is recognized as a company possessing maritime logistics visibility technology. Logistics visibility means the ability to visually confirm the entire logistics process, including accurate cargo departure and arrival times and location information. It is considered a core element of global logistics competitiveness, enabling customers to produce and sell products on time and respond swiftly to risks.

Vizion uses artificial intelligence (AI) technology to automatically collect and analyze key data such as cargo location information from shipping companies and port terminals worldwide, providing highly accurate cargo transportation information in real time.

Samsung SDS plans to link the cargo location information provided by Vizion with its digital logistics platform, Cello Square, to offer various cargo transportation tracking, vessel schedules, and enhance cargo arrival time prediction services.

As a result, shippers using Samsung SDS's digital logistics services will receive more accurate and prompt global maritime logistics information, including cargo departure and arrival times at loading, transshipment, and arrival ports, real-time location tracking, and transportation monitoring.

Industry insiders interpret Samsung SDS's recent investment as a signal of its M&A activities. Earlier, at the shareholders' meeting held in March, Samsung SDS CEO Hwang Sung-woo stated, "We are working on transforming the company's structure," and added, "We will definitely carry out investments and M&A aligned with the two directions of cloud and logistics platforms."

CEO Hwang's determination stems from the judgment that the company has not properly caught up with the major trend of cloud transformation. Until now, Samsung SDS has operated a third-party logistics (3PL) business in the form of logistics outsourcing, but experts predict that the existing 3PL, which has not transitioned to a digital platform basis, will lose competitiveness.

The financial resources are sufficient. As of the end of last year, Samsung SDS's net cash without debt stood at 4.6 trillion won, and its debt ratio was 41%. This is an ultra-solid financial structure, and in terms of available funds, it is evaluated as the second largest among domestic internet and software companies after Naver. Samsung SDS plans to actively utilize its cash assets not only in cloud, smart factory, and logistics sectors that can create synergy with existing businesses but also to expand into new businesses such as blockchain and AI.

Oh Gu-il, Vice President and Head of Samsung SDS Logistics Division, said, "We expect that this investment will further strengthen our competitiveness in digital logistics services," and added, "We will continue to invest and secure technology to establish ourselves as a global major logistics service company."