Kuehne+Nagel (K+N) has acquired the business and assets of ...Kuehne+Nagel (K+N) has acquired the business and assets of RR Enterprises, a New Delhi-based cold chain logistics business, for an estimated US$ 4 to 5 Million.
RRE, founded by first generation entrepreneur Kapil Bhatia, is in the business of transportation of goods by road in refrigerated trucks. It has 50 refrigerated trucks and four refer containers, clients and pan-India operations. The acquisition of the assets of RRE is in line with K+N’s inorganic growth strategy and will mark its foray into the fast growing cold chain logistics industry in India.
Cold chain is a logistic system that provides a series of facilities for maintaining ideal storage conditions for perishables from the point of origin to the point of consumption in the food supply chain. The chain needs to start at the farm level (e.g. harvest methods, pre-cooling) and cover up to the consumer level or at least to the retail level.The total cold chain market in India is estimated at $475 million.
Some of the recent deals in India's logistics space include Coffee Day arm buying Sical Logistics for $35.38 million, Aqua Logistics buying Star Distribution Logistics Pvt Ltd for $2 million and Hitachi Transport System Ltd buying Flyjac Transport Logistics System for $56.1 million.
Maple Capital Advisors were the sole advisors for the deal.
Dec 10, 2010 6:00 PMBrands sourcing locally to become more competitive in India09 Dec, 2010
Several international fashion brands such as Cadini, DK...
Several international fashion brands such as Cadini, DKNY, , which have been importing their entire merchandise for India, have started apparels locally to become more competitive and profitable in a booming market.
By shedding inhibitions towards sourcing from within the country, these brands can significantly cut down tax outgo and reduce production costs by about 20%, helping them to reduce prices and reach the market faster, say analysts.
Local sourcing will help companies do away with import duties, which are as high as 40% on apparels, and save on longer supply cycles, says Harminder Sahni, managing director of consultancy firm Wazir Advisors. "Besides, they can either bring down prices or make extra margins equal to the amount of customs duty," he adds.
Donna Karan New York, or DKNY, already source about 6% of its merchandise from the country, says Ashesh Amin, president – and retail at S Kumar’s Nationwide, which has the global franchise for menswear in all geographies except Japan.
The US-based clothier Hartmarx Corp, which S Kumar’s acquired in 2009, sources merchandise worth about Rs 40 crore from India. The company, which shot into fame for designing a suit for US president Barack Obama, plans to increase its sourcing base in India further in next two years.
"Local sourcing is beneficial to us; it offers higher margin and better time-to-market," says Mr Amin. "We are expecting additional business of over Rs 800 crore this fiscal on the back of local sourcing."
Arvind Brands, a subsidiary of textile firm Arvind Mills, is in talks with the UK-based premium lifestyle brand Gant to start sourcing its merchandise in India. Gant currently imports the entire collection for sale here.
The firm is also set to launch Italian menswear label Energie in India, which will have 75% of its merchandise sourced locally, says J Suresh, CEO of the Rs 230-crore Arvind Brands.
The company already has a local sourcing model in place for its other international brands such as Arrow, Izod, USPA and Cherokee that are buying merchandise from suppliers in Bangalore, Chennai, Delhi and Ludhiana.
However, the international brands are playing safe while choosing suppliers in India after UK retailer Marks & Spencer severed ties with one of its local suppliers following allegations of unfair practices.
Anand Nair, brand head of Boggi Milano, says, "We are carrying out intense screening procedures to ensure that our Indian suppliers match our quality standards and working conditions."
DLF Brands, the retail arm of top real estate firm DLF, retails the Italian premium menswear brand in India.
Marks & Spencer Reliance India, the joint venture between Mukesh Ambani-run Reliance Industries and the UK retailer, had recently announced plans to increase sourcing from India to more than 70% from about 40% now.
One of the earlier entrants to the domestic market, United Colors of Benetton sources its entire range locally.
Other than the tax savings, another factor driving fashion brands to India is the rising labour costs in China, say analysts. Recent labour unrest in places like Indonesia, Cambodia and Vietnam too may work in favour of India.
Most these brands have no immediate plans to source merchandise for their global operations from India, but will integrate their India supply chain with their global distribution network in the long term.
Blues Clothing, which has licence to retail Italian fashion labels Versace, Corneliani and in India, plans to leverage its source base is India for global operations soon. The company is currently sampling few export-oriented factories to source merchandise for premium menswear brand Cadini, according to its MD Abhay Gupta.
Brands such as Boggi Milano and Cadini, which import 100% of their merchandise, feel that local sourcing will help them expand faster.
"Local sourcing will certainly improve our logistic and supply chain, and the pace of expansion will improve," says Mr Nair of Boggi Milano.
International brands are estimated to account for nearly 20% of the Rs 32,000-crore Indian organised branded apparel market, which is growing at 15-20% a year.
Dec 9, 2010 6:00 PM
Several international fashion brands such as Cadini, DK...Several international fashion brands such as Cadini, DKNY, , which have been importing their entire merchandise for India, have started apparels locally to become more competitive and profitable in a booming market.
By shedding inhibitions towards sourcing from within the country, these brands can significantly cut down tax outgo and reduce production costs by about 20%, helping them to reduce prices and reach the market faster, say analysts.
Local sourcing will help companies do away with import duties, which are as high as 40% on apparels, and save on longer supply cycles, says Harminder Sahni, managing director of consultancy firm Wazir Advisors. "Besides, they can either bring down prices or make extra margins equal to the amount of customs duty," he adds.
Donna Karan New York, or DKNY, already source about 6% of its merchandise from the country, says Ashesh Amin, president – and retail at S Kumar’s Nationwide, which has the global franchise for menswear in all geographies except Japan.
The US-based clothier Hartmarx Corp, which S Kumar’s acquired in 2009, sources merchandise worth about Rs 40 crore from India. The company, which shot into fame for designing a suit for US president Barack Obama, plans to increase its sourcing base in India further in next two years.
"Local sourcing is beneficial to us; it offers higher margin and better time-to-market," says Mr Amin. "We are expecting additional business of over Rs 800 crore this fiscal on the back of local sourcing."
Arvind Brands, a subsidiary of textile firm Arvind Mills, is in talks with the UK-based premium lifestyle brand Gant to start sourcing its merchandise in India. Gant currently imports the entire collection for sale here.
The firm is also set to launch Italian menswear label Energie in India, which will have 75% of its merchandise sourced locally, says J Suresh, CEO of the Rs 230-crore Arvind Brands.
The company already has a local sourcing model in place for its other international brands such as Arrow, Izod, USPA and Cherokee that are buying merchandise from suppliers in Bangalore, Chennai, Delhi and Ludhiana.
However, the international brands are playing safe while choosing suppliers in India after UK retailer Marks & Spencer severed ties with one of its local suppliers following allegations of unfair practices.
Anand Nair, brand head of Boggi Milano, says, "We are carrying out intense screening procedures to ensure that our Indian suppliers match our quality standards and working conditions."
DLF Brands, the retail arm of top real estate firm DLF, retails the Italian premium menswear brand in India.
Marks & Spencer Reliance India, the joint venture between Mukesh Ambani-run Reliance Industries and the UK retailer, had recently announced plans to increase sourcing from India to more than 70% from about 40% now.
One of the earlier entrants to the domestic market, United Colors of Benetton sources its entire range locally.
Other than the tax savings, another factor driving fashion brands to India is the rising labour costs in China, say analysts. Recent labour unrest in places like Indonesia, Cambodia and Vietnam too may work in favour of India.
Most these brands have no immediate plans to source merchandise for their global operations from India, but will integrate their India supply chain with their global distribution network in the long term.
Blues Clothing, which has licence to retail Italian fashion labels Versace, Corneliani and in India, plans to leverage its source base is India for global operations soon. The company is currently sampling few export-oriented factories to source merchandise for premium menswear brand Cadini, according to its MD Abhay Gupta.
Brands such as Boggi Milano and Cadini, which import 100% of their merchandise, feel that local sourcing will help them expand faster.
"Local sourcing will certainly improve our logistic and supply chain, and the pace of expansion will improve," says Mr Nair of Boggi Milano.
International brands are estimated to account for nearly 20% of the Rs 32,000-crore Indian organised branded apparel market, which is growing at 15-20% a year.
Dec 9, 2010 6:00 PMChina sourcing loses charm for Indian firms09 Dec, 2010
China's manufacturing costs are reaching levels that are now forcing some companies that sour...
China's manufacturing costs are reaching levels that are now forcing some companies that source products from the land of the dragon to reduce such sourcing and manufacture these in India more economically.
Watch and jewellery major Titan Industries, which sources watch components from China, said it plans to restrict such sourcing and instead make additional investments in its manufacturing facility in Tamil Nadu. Similarly, it is now cheaper for Dell to supply PCs from India than from China, especially to countries in the Middle East, Africa and the CIS countries. Dell, which started exports of PCs from its Sriperumbudur plant near Chennai earlier this year, has become the first major PC brand to export out of India and is now exporting several thousand units every month to West Asia.
That's not all. Indian auto component major Sona Group also has considered sourcing parts from China in the past but sees no significant cost advantage in doing so. The tide therefore clearly appears to be changing.
Bhaskar Bhat, MD of Titan Industries, puts it in perspective. According to him, the firm has been outsourcing a lot to Chinese manufacturers, but "that's becoming a challenge as costs are going up". "We want to derisk," he adds.
Chinese costs have risen significantly, and more so in recent months as the country has eased its monetary and currency policies. China's central bank raised benchmark borrowing and deposit rates in October for the first time since 2007 and increased the reserve requirement for banks twice in November. Since June 19, when it introduced a more flexible exchange rate policy, China's currency renminbi has appreciated by 2.6% against the dollar, making Chinese exports more expensive.
The expectation is that the currency will rise further in the coming months. Labour has become expensive, especially along the coastal belt, which has been the focus of China's developmental efforts in the past decades. In the past one year alone, labour cost is said to have gone up by 21%. China has also imposed stricter pollution control norms on its industries, compelling them to make relevant investments.
It's perhaps for these reasons that the Sona Group, does not sees any significant cost advantage in sourcing from China. "We do import a small portion of our forgings supplies from China for one of our group companies. However, because the prices of parts in India and China are similar and owing to the distance and lack of clarity about China's currency situation, most of our sourcing is done within India," said Surinder Kapur, chairman of Sona Koyo Steering Systems.
India has been second to China in Deloitte's country ranking of manufacturing competitiveness in recent years, and from most accounts, the difference is narrowing. The rising costs, combined with India's growing manufacturing prowess, partly explain why, as TOI reported recently, India exported more automobiles than China did between January and July this year. While India exported 2.3 lakh cars, vans, SUVs and trucks during this period, a growth of 18%, China's exports tumbled 60% to 1.65 lakh units. The same reasons explain why Nokia today exports mobile handsets to some 70 countries, including North America and Europe, from its Sriperumbudur facility.
Aravind Melligeri, chairman of QuEST Global, which makes aircraft components in its SEZ in Belgaum, Karnataka, in joint ventures with foreign firms, said US and European firms are worried about labour unrests in China affecting delivery cycles and escalating costs.
"China's currency appreciation is also hurting costs," he said.
Bhat estimates that the overall cost base (labour and fixed costs) of his Chinese vendors has gone up by 50%. "They have not passed all of that on to us. But sooner or later they will have to ask for a further price increase. And that's when we will find it really difficult," he said.
However, not everybody is rethinking China. Arvind Walia, MD of Gabriel India, which makes auto parts like shock absorbers and struts front forks, said China would remain a major sourcing destination for the company.
By Sujit John, Shilpa Phadnis & Pranav Nambiar
Dec 9, 2010 6:00 PM
China's manufacturing costs are reaching levels that are now forcing some companies that sour...China's manufacturing costs are reaching levels that are now forcing some companies that source products from the land of the dragon to reduce such sourcing and manufacture these in India more economically.
Watch and jewellery major Titan Industries, which sources watch components from China, said it plans to restrict such sourcing and instead make additional investments in its manufacturing facility in Tamil Nadu. Similarly, it is now cheaper for Dell to supply PCs from India than from China, especially to countries in the Middle East, Africa and the CIS countries. Dell, which started exports of PCs from its Sriperumbudur plant near Chennai earlier this year, has become the first major PC brand to export out of India and is now exporting several thousand units every month to West Asia.
That's not all. Indian auto component major Sona Group also has considered sourcing parts from China in the past but sees no significant cost advantage in doing so. The tide therefore clearly appears to be changing.
Bhaskar Bhat, MD of Titan Industries, puts it in perspective. According to him, the firm has been outsourcing a lot to Chinese manufacturers, but "that's becoming a challenge as costs are going up". "We want to derisk," he adds.
Chinese costs have risen significantly, and more so in recent months as the country has eased its monetary and currency policies. China's central bank raised benchmark borrowing and deposit rates in October for the first time since 2007 and increased the reserve requirement for banks twice in November. Since June 19, when it introduced a more flexible exchange rate policy, China's currency renminbi has appreciated by 2.6% against the dollar, making Chinese exports more expensive.
The expectation is that the currency will rise further in the coming months. Labour has become expensive, especially along the coastal belt, which has been the focus of China's developmental efforts in the past decades. In the past one year alone, labour cost is said to have gone up by 21%. China has also imposed stricter pollution control norms on its industries, compelling them to make relevant investments.
It's perhaps for these reasons that the Sona Group, does not sees any significant cost advantage in sourcing from China. "We do import a small portion of our forgings supplies from China for one of our group companies. However, because the prices of parts in India and China are similar and owing to the distance and lack of clarity about China's currency situation, most of our sourcing is done within India," said Surinder Kapur, chairman of Sona Koyo Steering Systems.
India has been second to China in Deloitte's country ranking of manufacturing competitiveness in recent years, and from most accounts, the difference is narrowing. The rising costs, combined with India's growing manufacturing prowess, partly explain why, as TOI reported recently, India exported more automobiles than China did between January and July this year. While India exported 2.3 lakh cars, vans, SUVs and trucks during this period, a growth of 18%, China's exports tumbled 60% to 1.65 lakh units. The same reasons explain why Nokia today exports mobile handsets to some 70 countries, including North America and Europe, from its Sriperumbudur facility.
Aravind Melligeri, chairman of QuEST Global, which makes aircraft components in its SEZ in Belgaum, Karnataka, in joint ventures with foreign firms, said US and European firms are worried about labour unrests in China affecting delivery cycles and escalating costs.
"China's currency appreciation is also hurting costs," he said.
Bhat estimates that the overall cost base (labour and fixed costs) of his Chinese vendors has gone up by 50%. "They have not passed all of that on to us. But sooner or later they will have to ask for a further price increase. And that's when we will find it really difficult," he said.
However, not everybody is rethinking China. Arvind Walia, MD of Gabriel India, which makes auto parts like shock absorbers and struts front forks, said China would remain a major sourcing destination for the company.
By Sujit John, Shilpa Phadnis & Pranav Nambiar
Dec 9, 2010 6:00 PMToshiba outsources procurement for nuclear plants to Shaw Group09 Dec, 2010
The Shaw Group is to provide a range of procurement, engineering and construction s...
The Shaw Group is to provide a range of procurement, engineering and construction services for Toshiba.
An expanded global partnership deal sees the Shaw Group providing the services for new Toshiba Advanced Boiling Water Reactor (ABWR) nuclear power plants around the world, except in Japan and Vietnam.
Shaw is to immediately take on the role of procurement, engineering and construction contractor for Nuclear Innovation North America's South Texas project expansion, which will use ABWR technology for two new nuclear units.
Both firms have a proven relationship combining expertise and resources in nuclear power, noted JM Bernhard Jr, Shaw's chairman, president and chief executive officer.
"Now with our agreement with Toshiba, Shaw is able to promote not only Westinghouse AP1000, the world's first Generation III+ nuclear technology but also ABWR, the world's most proven advanced nuclear technology to our customers."
Toshiba recently announced a drive to make procurement saving by sourcing more materials from outside of Japan.
Dec 9, 2010 6:00 PM
The Shaw Group is to provide a range of procurement, engineering and construction s...The Shaw Group is to provide a range of procurement, engineering and construction services for Toshiba.
An expanded global partnership deal sees the Shaw Group providing the services for new Toshiba Advanced Boiling Water Reactor (ABWR) nuclear power plants around the world, except in Japan and Vietnam.
Shaw is to immediately take on the role of procurement, engineering and construction contractor for Nuclear Innovation North America's South Texas project expansion, which will use ABWR technology for two new nuclear units.
Both firms have a proven relationship combining expertise and resources in nuclear power, noted JM Bernhard Jr, Shaw's chairman, president and chief executive officer.
"Now with our agreement with Toshiba, Shaw is able to promote not only Westinghouse AP1000, the world's first Generation III+ nuclear technology but also ABWR, the world's most proven advanced nuclear technology to our customers."
Toshiba recently announced a drive to make procurement saving by sourcing more materials from outside of Japan.
Dec 9, 2010 6:00 PMWalmart raises IT sourcing from India09 Dec, 2010
Selects Wipro, Collabera as vendors; total IT sourcing from India about $1 billion.
US...
Selects Wipro, Collabera as vendors; total IT sourcing from India about $1 billion.
US-based retailer Walmart, also the largest company in the world, has increased its information technology (IT) sourcing strategy from India by setting up a dedicated group here (in Gurgaon). Called Remote Services Management, the group is headed by Micky Singh who was earlier the CIO of Walmart India and responsible for setting up complete IT solution to Bharti-Walmart, covering all facets of the retail joint venture.
According to highly-placed sources, Remote Services Management will be part of Walmart’s Information Systems Division (ISD), the in-house IT arm of the company. This is for the first time Walmart’s ISD has set up an arm outside the US.
With this, the company wants to identify a number of Indian IT partners based on their areas of strength, rather than giving a huge IT contract to any single company. As part of the strategy, Walmart has also awarded contracts to two more Indian IT services firms, Wipro and Collabera (a privately-held IT services company) to develop specific tools and application, and provide services around that. The contracts are estimated to be over $200 million for multi-year periods. Walmart has already awarded IT contracts to Infosys, Cognizant and UST Global for sourcing specific services and applications for Walmart globally.
With the selection of more vendors, Walmart’s total IT sourcing from India is estimated to be in the range of $800 million-1 billion. To a specific query from Business Standard, Walmart said the numbers were speculative and not based on fact.
The company, however, said it had relationships with a number of partners and it did not want to comment on the nature of those business relationships. "As a global company, Walmart will make investments in technology to benefit the operations here and elsewhere in the world. We will need worldwide resources, and our work with suppliers in India will help us continue to grow our business and create jobs around the world," the company spokesperson said in an email reply.
A Wipro spokesperson said the company did not want to comment on market speculations. Collabera, too, echoed this.
It is understood that Wipro will be responsible for application development and infrastructure outsourcing for Walmart stores globally. Besides, the company has also established a large helpdesk as part of its BPO practice. On the other hand, Collabera will develop collaborative tools for specific retail applications.
According to industry sources, in his new role Micky Singh will be responsible for identifying Indian IT partners. For example, the Thiruvananthapuram-based UST Global is responsible for specific testing of its retail applications because of its inherent strengths in software testing.
Walmart typically prefers to develop its retail applications in-house. However, the company gradually started buying packaged retail applications from leading software vendors like Oracle, HP and SAP only towards the end of 2007.
Dec 9, 2010 6:00 PM
Selects Wipro, Collabera as vendors; total IT sourcing from India about $1 billion.
US...Selects Wipro, Collabera as vendors; total IT sourcing from India about $1 billion.
US-based retailer Walmart, also the largest company in the world, has increased its information technology (IT) sourcing strategy from India by setting up a dedicated group here (in Gurgaon). Called Remote Services Management, the group is headed by Micky Singh who was earlier the CIO of Walmart India and responsible for setting up complete IT solution to Bharti-Walmart, covering all facets of the retail joint venture.
According to highly-placed sources, Remote Services Management will be part of Walmart’s Information Systems Division (ISD), the in-house IT arm of the company. This is for the first time Walmart’s ISD has set up an arm outside the US.
With this, the company wants to identify a number of Indian IT partners based on their areas of strength, rather than giving a huge IT contract to any single company. As part of the strategy, Walmart has also awarded contracts to two more Indian IT services firms, Wipro and Collabera (a privately-held IT services company) to develop specific tools and application, and provide services around that. The contracts are estimated to be over $200 million for multi-year periods. Walmart has already awarded IT contracts to Infosys, Cognizant and UST Global for sourcing specific services and applications for Walmart globally.
With the selection of more vendors, Walmart’s total IT sourcing from India is estimated to be in the range of $800 million-1 billion. To a specific query from Business Standard, Walmart said the numbers were speculative and not based on fact.
The company, however, said it had relationships with a number of partners and it did not want to comment on the nature of those business relationships. "As a global company, Walmart will make investments in technology to benefit the operations here and elsewhere in the world. We will need worldwide resources, and our work with suppliers in India will help us continue to grow our business and create jobs around the world," the company spokesperson said in an email reply.
A Wipro spokesperson said the company did not want to comment on market speculations. Collabera, too, echoed this.
It is understood that Wipro will be responsible for application development and infrastructure outsourcing for Walmart stores globally. Besides, the company has also established a large helpdesk as part of its BPO practice. On the other hand, Collabera will develop collaborative tools for specific retail applications.
According to industry sources, in his new role Micky Singh will be responsible for identifying Indian IT partners. For example, the Thiruvananthapuram-based UST Global is responsible for specific testing of its retail applications because of its inherent strengths in software testing.
Walmart typically prefers to develop its retail applications in-house. However, the company gradually started buying packaged retail applications from leading software vendors like Oracle, HP and SAP only towards the end of 2007.
Dec 9, 2010 6:00 PMLG Supply Chain Chief named as new CEVA Asia's President09 Dec, 2010
Supply chain management company CEVA Logistics has appointed Didier Chenneveau as its new presiden...
Supply chain management company CEVA Logistics has appointed Didier Chenneveau as its new president of Asia Pacific.
Mr Chenneveau is currently executive vice president and chief supply chain officer for LG Electronics, with worldwide responsibility for global supply chain management for the company’s operations.
Prior to joining LG in 2008, Mr Chenneveau was vice president of Americas operations for HP’s Imaging and Printing Business. He also worked in Europe running HP’s consumer PC business and in various managerial financial and operations roles. Prior to joining HP, Mr Chenneveau worked for Caterpillar.
Mr Chenneveau will be taking over the Asia Pacific region from Vittorio Favati, who after nine years within the region heading up activities for CEVA and its heritage businesses, will be moving to the global role of chief business development officer, based from the company’s headquarters in Amsterdam, the Netherlands.
In related moves, CEVA has also revealed Vittorio Favati will be moving from the Asia Pacific region to Amsterdam to take up the role of chief business development officer, and remains as a member of the executive board.
Coen van der Maarel, who currently holds the position of chief business development officer, will be moving to a newly formed role as managing director for Central and Eastern Europe, reporting to Leigh Pomlett, president of Northern Europe. All changes will be effective from the beginning of 2011.
John Pattullo, CEO of CEVA, said: "I am pleased to welcome Didier on board and believe he will bring strong leadership to our growing Asia Pacific region. With Vittorio transitioning to lead our business and sales areas, it makes us well placed to maximize on the opportunities we are seeing in the market and positions us well for continued growth in 2011."
Dec 9, 2010 5:00 PM
Supply chain management company CEVA Logistics has appointed Didier Chenneveau as its new presiden...Supply chain management company CEVA Logistics has appointed Didier Chenneveau as its new president of Asia Pacific.
Mr Chenneveau is currently executive vice president and chief supply chain officer for LG Electronics, with worldwide responsibility for global supply chain management for the company’s operations.
Prior to joining LG in 2008, Mr Chenneveau was vice president of Americas operations for HP’s Imaging and Printing Business. He also worked in Europe running HP’s consumer PC business and in various managerial financial and operations roles. Prior to joining HP, Mr Chenneveau worked for Caterpillar.
Mr Chenneveau will be taking over the Asia Pacific region from Vittorio Favati, who after nine years within the region heading up activities for CEVA and its heritage businesses, will be moving to the global role of chief business development officer, based from the company’s headquarters in Amsterdam, the Netherlands.
In related moves, CEVA has also revealed Vittorio Favati will be moving from the Asia Pacific region to Amsterdam to take up the role of chief business development officer, and remains as a member of the executive board.
Coen van der Maarel, who currently holds the position of chief business development officer, will be moving to a newly formed role as managing director for Central and Eastern Europe, reporting to Leigh Pomlett, president of Northern Europe. All changes will be effective from the beginning of 2011.
John Pattullo, CEO of CEVA, said: "I am pleased to welcome Didier on board and believe he will bring strong leadership to our growing Asia Pacific region. With Vittorio transitioning to lead our business and sales areas, it makes us well placed to maximize on the opportunities we are seeing in the market and positions us well for continued growth in 2011."
Dec 9, 2010 5:00 PMDomestic Logistics Revenue Tops 100T Yuan06 Dec, 2010
China’s logistics industry earned roughly 100 trillion yuan in revenue in the first ten months...
China’s logistics industry earned roughly 100 trillion yuan in revenue in the first ten months of 2010, reports xinhuanet.com, citing Cui Zhongfu, vice president of the China Federation of Logistics and Purchasing. The number represents a 16.8-percent year-on-year increase in revenue and a 9.9-percent climb in its growth rate. The industry’s added value rose 14.6 percent to 1.9 trillion yuan.
Cargo transport volume grew 27.1-percent year-on-year in the first eight months of 2010, with the revenue and net profit in the same period growing 41 percent and 44.8 percent year-on-year.
The logistics industry’s fixed-asset investment in the first three quarters rose 23.2 percent year-on-year to 2.04 trillion yuan.
Shares of China Southern Airlines (600029,1055.HK) rose 1.43 percent to trade at 9.24 yuan at 10:44 today.
Dec 6, 2010 7:00 PM
China’s logistics industry earned roughly 100 trillion yuan in revenue in the first ten months...China’s logistics industry earned roughly 100 trillion yuan in revenue in the first ten months of 2010, reports xinhuanet.com, citing Cui Zhongfu, vice president of the China Federation of Logistics and Purchasing. The number represents a 16.8-percent year-on-year increase in revenue and a 9.9-percent climb in its growth rate. The industry’s added value rose 14.6 percent to 1.9 trillion yuan.
Cargo transport volume grew 27.1-percent year-on-year in the first eight months of 2010, with the revenue and net profit in the same period growing 41 percent and 44.8 percent year-on-year.
The logistics industry’s fixed-asset investment in the first three quarters rose 23.2 percent year-on-year to 2.04 trillion yuan.
Shares of China Southern Airlines (600029,1055.HK) rose 1.43 percent to trade at 9.24 yuan at 10:44 today.
Dec 6, 2010 7:00 PMPhilippines overtakes India as call centre capital06 Dec, 2010
The Philippines has become the call centre capital of the world, overtaking India as the numb...
The Philippines has become the call centre capital of the world, overtaking India as the number one player in the global business outsourcing market, according to industry data and the government. President Benigno Aquino has led celebrations in recent weeks as it has become increasingly clear that the Southeast Asian nation has become the world's dominant player in the outsourced back-office operations industry.
"In the past decade, the (growth in the) industry in the country has been nothing short of exceptional. From a virtual non-entity in 2001, your sector has earned sunshine industry status," Aquino said.
At an opening of an IBM outsourcing centre in Manila last week, Aquino forecast that the industry's revenues would hit 12-13 billion dollars next year, rising to 100 billion dollars by 2020 for a fifth of global market share.
A report from IBM released in October said the Philippines had this year passed India as the global leader in business process outsourcing in terms of the number of people each country employed in the sector.
"For business support functions... the Philippines has taken over the lead in the global ranking from India, after having challenged the top position for several years," the report said.
The IBM report did not present exact figures on how many people each country employed in the outsourcing industry.
But the head of the government's information technology commission, Ivan Uy, said the Philippines had definitely bypassed India in call centre revenues with 5.5 billion dollars last year compared with India's 5.3 billion dollars.
The president of the Contact Center Association of the Philippines, Benedict Hernandez, also said the Philippines had more than half a million people working in call centres and related services compared with 330,000 in India.
Hernandez said the Philippines, a former US colony, had an advantage due to its workforce being made up of English speakers who had accents and a culture that is closer to those of many Western callers.
"The market over the years has generated a preference for the Philippines, especially the US market. There is more cultural affinity and the language is more attuned to the US," Hernandez told AFP.
Uy said even Indian companies were setting up call centres in the Philippines to take advantage of the Filipinos' cultural links to the West.
"Many of these Indian companies do outsourcing work for US companies and their US clients say they prefer doing business with Filipinos so rather than lose those clients, they to move to the Philippines," Uy said.
Tata Consultancy Services, one of the Indian giants in the industry, announced Monday it had launched a business process outsourcing operation in Manila, its first in Southeast Asia.
While business process outsourcing has been dominated by call centres -- where hundreds of workers handle phone calls from customers abroad -- the sector now covers a wide area of services.
These include logistics, finance, accounting and software research and programming, computer-aided design, animation and graphic design.
Local industry groups conceded that India still had a huge lead in the more complex outsourced services such as engineering, software design and programming.
But the Philippines is not standing still in that area either.
"Foreign companies come here for voice work and then they realise the people they are hiring are capable of doing other work as well," said Gillian Virata, research director at the Business Processing Association of the Philippines.
Any services that can be done in the back room of an office are being outsourced to the Philippines, she told AFP.
These range from finance and accounting services, human resource management, marketing analysis, legal processes and research, medical and legal transcription, case writing and preparation of legal briefs, Virata said.
The country's surplus of nurses and other medical professionals can also be harnessed for the outsourcing of health care services such as hospital billing, management of medical health records and "aftercare" of patients, Virata said.
"We have a lot of medically trained people who can do anything that can support hospital operations," she said.
The industry is especially important to the Philippines as there are so few other sectors in an economy that has for decades underperformed, capable of employing qualified people.
Nearly nine million Filipinos -- about one tenth of the population -- work overseas. They sent home last year 17.3 billion dollars, more than 10 percent of the country's gross domestic product.
Dec 6, 2010 7:00 PM
The Philippines has become the call centre capital of the world, overtaking India as the numb...The Philippines has become the call centre capital of the world, overtaking India as the number one player in the global business outsourcing market, according to industry data and the government. President Benigno Aquino has led celebrations in recent weeks as it has become increasingly clear that the Southeast Asian nation has become the world's dominant player in the outsourced back-office operations industry.
"In the past decade, the (growth in the) industry in the country has been nothing short of exceptional. From a virtual non-entity in 2001, your sector has earned sunshine industry status," Aquino said.
At an opening of an IBM outsourcing centre in Manila last week, Aquino forecast that the industry's revenues would hit 12-13 billion dollars next year, rising to 100 billion dollars by 2020 for a fifth of global market share.
A report from IBM released in October said the Philippines had this year passed India as the global leader in business process outsourcing in terms of the number of people each country employed in the sector.
"For business support functions... the Philippines has taken over the lead in the global ranking from India, after having challenged the top position for several years," the report said.
The IBM report did not present exact figures on how many people each country employed in the outsourcing industry.
But the head of the government's information technology commission, Ivan Uy, said the Philippines had definitely bypassed India in call centre revenues with 5.5 billion dollars last year compared with India's 5.3 billion dollars.
The president of the Contact Center Association of the Philippines, Benedict Hernandez, also said the Philippines had more than half a million people working in call centres and related services compared with 330,000 in India.
Hernandez said the Philippines, a former US colony, had an advantage due to its workforce being made up of English speakers who had accents and a culture that is closer to those of many Western callers.
"The market over the years has generated a preference for the Philippines, especially the US market. There is more cultural affinity and the language is more attuned to the US," Hernandez told AFP.
Uy said even Indian companies were setting up call centres in the Philippines to take advantage of the Filipinos' cultural links to the West.
"Many of these Indian companies do outsourcing work for US companies and their US clients say they prefer doing business with Filipinos so rather than lose those clients, they to move to the Philippines," Uy said.
Tata Consultancy Services, one of the Indian giants in the industry, announced Monday it had launched a business process outsourcing operation in Manila, its first in Southeast Asia.
While business process outsourcing has been dominated by call centres -- where hundreds of workers handle phone calls from customers abroad -- the sector now covers a wide area of services.
These include logistics, finance, accounting and software research and programming, computer-aided design, animation and graphic design.
Local industry groups conceded that India still had a huge lead in the more complex outsourced services such as engineering, software design and programming.
But the Philippines is not standing still in that area either.
"Foreign companies come here for voice work and then they realise the people they are hiring are capable of doing other work as well," said Gillian Virata, research director at the Business Processing Association of the Philippines.
Any services that can be done in the back room of an office are being outsourced to the Philippines, she told AFP.
These range from finance and accounting services, human resource management, marketing analysis, legal processes and research, medical and legal transcription, case writing and preparation of legal briefs, Virata said.
The country's surplus of nurses and other medical professionals can also be harnessed for the outsourcing of health care services such as hospital billing, management of medical health records and "aftercare" of patients, Virata said.
"We have a lot of medically trained people who can do anything that can support hospital operations," she said.
The industry is especially important to the Philippines as there are so few other sectors in an economy that has for decades underperformed, capable of employing qualified people.
Nearly nine million Filipinos -- about one tenth of the population -- work overseas. They sent home last year 17.3 billion dollars, more than 10 percent of the country's gross domestic product.
Dec 6, 2010 7:00 PMNissan's sourcing in India to quadruple in next 2 years01 Dec, 2010
Nissan Motor Ltd of Japan is looking at a four-fold increase in sourcing of production components from Indi...
Nissan Motor Ltd of Japan is looking at a four-fold increase in sourcing of production components from India for its global operations.
The company would import $10 million (Rs 45 crore) of components in 2010 from Indian vendors. It is set to increase this to $40 million by the end of 2012, a top company official said.
"We are presently exporting various parts from India for Nissan's global manufacturing facilities in Thailand, China and Japan. Presently, we are exporting components for our global compact car, Micra. Going forward, we will be exporting components for other models as well," Kiminobu
Tokuyama, managing director & CEO, Nissan Motor India Pvt Ltd (NMIPL), told Business Standard.
NMIPL, a fully-owned subsidiary of Nissan Motor Ltd, Japan, which launched the petrol version of the Micra in July, is sourcing 85 per cent of the components from Indian vendors. Of this, half are sourced from vendors in and around Chennai, he said.
However, Nissan imports some components, such as the transmission and safety features, from various countries. The company is currently in talks with Indian vendors for supply of some key components that go into transmission units, said Gary Kirby, assistant chief vehicle engineer of small cars at the Nissan R&D Centre in India.
He said Nissan was studying the possibilities of producing transmission products in India. "We have a comprehensive plan to manufacture these components in India and are talking to Indian vendors to source some of the key components like cylinder heads and blocks. In the next three to five years, these components will be manufactured in India," Kirby said.
In February 2008, Nissan and its global alliance partner, Renault, signed an agreement with the government of Tamil Nadu to set up a manufacturing unit at Oragadam, near this city, with an investment of Rs 4,500 crore over seven years. The factory was inaugurated this March, with an initial capacity of 200,000 units per year. It is to reach 400,000 units yearly in due course.
Tokuyama said another Rs 2,200 crore would be invested in the next two to three years to set up one more assembly line and introduce six other models. The company plans to launch its new sedan on the 'V' platform towards the end of 2011. This model would be launched in China and America before India, he said.
He said the company was also studying the possibility of launching a new car, positioned below the Micra and above the ultra-low cost car it was working on."There is a growing demand for small cars in India and Nissan has studied the segment and the concept is in the initial development stage," he said.
Nissan plans to roll out three new vehicles, including a bus-truck and a multi-purpose vehicle, through its joint venture with Ashok Leyland in the first half of next year.
Dec 2, 2010 0:00 AM
Nissan Motor Ltd of Japan is looking at a four-fold increase in sourcing of production components from Indi...Nissan Motor Ltd of Japan is looking at a four-fold increase in sourcing of production components from India for its global operations.
The company would import $10 million (Rs 45 crore) of components in 2010 from Indian vendors. It is set to increase this to $40 million by the end of 2012, a top company official said.
"We are presently exporting various parts from India for Nissan's global manufacturing facilities in Thailand, China and Japan. Presently, we are exporting components for our global compact car, Micra. Going forward, we will be exporting components for other models as well," Kiminobu
Tokuyama, managing director & CEO, Nissan Motor India Pvt Ltd (NMIPL), told Business Standard.
NMIPL, a fully-owned subsidiary of Nissan Motor Ltd, Japan, which launched the petrol version of the Micra in July, is sourcing 85 per cent of the components from Indian vendors. Of this, half are sourced from vendors in and around Chennai, he said.
However, Nissan imports some components, such as the transmission and safety features, from various countries. The company is currently in talks with Indian vendors for supply of some key components that go into transmission units, said Gary Kirby, assistant chief vehicle engineer of small cars at the Nissan R&D Centre in India.
He said Nissan was studying the possibilities of producing transmission products in India. "We have a comprehensive plan to manufacture these components in India and are talking to Indian vendors to source some of the key components like cylinder heads and blocks. In the next three to five years, these components will be manufactured in India," Kirby said.
In February 2008, Nissan and its global alliance partner, Renault, signed an agreement with the government of Tamil Nadu to set up a manufacturing unit at Oragadam, near this city, with an investment of Rs 4,500 crore over seven years. The factory was inaugurated this March, with an initial capacity of 200,000 units per year. It is to reach 400,000 units yearly in due course.
Tokuyama said another Rs 2,200 crore would be invested in the next two to three years to set up one more assembly line and introduce six other models. The company plans to launch its new sedan on the 'V' platform towards the end of 2011. This model would be launched in China and America before India, he said.
He said the company was also studying the possibility of launching a new car, positioned below the Micra and above the ultra-low cost car it was working on."There is a growing demand for small cars in India and Nissan has studied the segment and the concept is in the initial development stage," he said.
Nissan plans to roll out three new vehicles, including a bus-truck and a multi-purpose vehicle, through its joint venture with Ashok Leyland in the first half of next year.
Dec 2, 2010 0:00 AMCaterpillar plans to shift parts sourcing to China29 Nov, 2010
Cat...
Caterpillar Inc. plans to move "as much as possible" of the sourcing for its most complex parts from Japan to China, the Financial Times reported Monday on its website.
The company imports 40% of components for its excavator factories from Japan, according to the FT. However, it plans to cut that by at least a quarter within five years as it prepares for a bigger shift.
"How quickly we can move from Japan to China depends on the ability of the Chinese supply base to do more," Rich Lavin, Caterpillar’s emerging markets chief, told the newspaper. "As they show their ability to manufacture more complex components we’ll move capacity out of Japan and into China."
Nov 29, 2010 6:00 PM
Cat...Caterpillar Inc. plans to move "as much as possible" of the sourcing for its most complex parts from Japan to China, the Financial Times reported Monday on its website.
The company imports 40% of components for its excavator factories from Japan, according to the FT. However, it plans to cut that by at least a quarter within five years as it prepares for a bigger shift.
"How quickly we can move from Japan to China depends on the ability of the Chinese supply base to do more," Rich Lavin, Caterpillar’s emerging markets chief, told the newspaper. "As they show their ability to manufacture more complex components we’ll move capacity out of Japan and into China."
Nov 29, 2010 6:00 PMMaersk May Invest in Railways, Trucks in China, India on Asia Trade Growth23 Nov, 2010
A.P. Moeller-Maersk A/S’s container-terminal arm may invest in rail, truck or barge operat...
A.P. Moeller-Maersk A/S’s container-terminal arm may invest in rail, truck or barge operators in China and India as Asian trade growth outpaces demand in the U.S. and Europe.
The company is considering acquisitions that will allow it to haul goods to ports, APM Terminals Chief Executive Officer Kim Fejfer told reporters in Singapore today. He declined to elaborate further on possible targets.
APM Terminals also plans to invest in Yangtze River ports as economic growth in rural China spurs cargo traffic along the nation’s longest river. Sea-cargo traffic in China, Vietnam, India and other emerging markets may grow 7 percent annually until 2015 compared with a 2 percent expansion in more mature economies, Fejfer said.
"China, Vietnam and India are the markets that we would like to increase our foothold in," said Martin Christiansen, APM Terminals’ Asia-Pacific head. The company is looking at "a number of interesting projects" along the Yangtze, he said.
Global container-port traffic will likely rise about 5 percent a year for the next five years, according to the terminal operator. Maersk also runs the world’s largest container-shipping line.
The company, which operates more than 50 terminals in 34 countries, increased the number of containers it handled in the first nine months of this year by 3 percent to 23.5 million 20- foot boxes. It is also currently developing seven new projects.
Separately, APM Terminals’ Pipavav, India unit agreed to lease almost 100 acres of land to Aegis Logistics Ltd. Aegis will build a $90 million oil terminal at the facility, about 150 miles north of Mumbai, the companies said in a statement.
To contact the reporter on this story: Kyunghee Park in Singapore at kpark3@bloomberg.net
Nov 24, 2010 3:00 AM
Suning Appliance to expand logistics and distribution in China23 Nov, 2010
Suning Appliance Company, China's largest electronic retailer by sales, plans ...
Suning Appliance Company, China's largest electronic retailer by sales, plans to issue new shares on the Shenzhen Stock Exchange.
The move is an attempt to raise funds for a nationwide expansion of logistics bases, which the company believes is a top priority for its long-term development.
"Our target is to establish 60 logistics bases within the next five years, and issuing new shares will provide us with financial support for the expansion plan," Sun Weimin, vice-president of Suning, told China Daily.
Sun didn't give a time frame for the issuance of the new shares.
The retailer issued stock options, convertible into 84.69 million shares, as an incentive to its senior management in August this year. The issue represents 1.21 percent of the company's stock if fully converted.
Suning now operates four distribution centers in Beijing, Nanjing, Shenyang, and Hangzhou, and the construction of further bases in Jinan, Qingdao, and Zhengzhou is under way.
Establishing the distribution centers will cost Suning at least 12 billion yuan ($1.81 billion), as each comprehensive logistic base needs an investment of 200 million yuan, according to Tang Jiarui, an analyst at Everbright Securities.
"Suning's challenge comes from a shortage of distribution services at present. So we will initially improve our logistics system to sustain our long-term store-opening plan," Sun said.
Suning now has more than 1,200 stores across China, and plans to open another 2,000 over the next 10 years, according to Sun."This year, Suning opened 400 stores in China, and the number of store openings next year won't be less than 400," Sun said.
The Nanjing-based retailer posted a profit of 2.83 billion yuan for the first nine months of this year, a 43.6 percent increase year-on-year.
Suning's rival Gome Electrical Appliances Holding Ltd said its profit rose 49.2 percent to 1.44 billion yuan for the first three quarters.
Suning overtook Gome to become China's biggest electronics retailer by sales in 2008, according to data compiled by Bloomberg.
Gome now has 1,255 stores, including 400 privately owned by founder Huang Guangyu, and the company plans to open 700 more by 2014.
Foreign companies have also started to expand their market presence in China's electronics retail industry.
The European electronics retailer Media-Saturn, and Foxconn Technology Group, the world's largest contract manufacturer of electronics, opened the first electronic outlet of their joint venture in Shanghai on Oct 17, aiming to shatter the dominance of the local giants.
Media-Saturn said the company will open 10 stores in Shanghai over the next two years, and will later ramp up its presence in China by opening more than 100 outlets throughout the country.
Nov 24, 2010 3:00 AM
Suning Appliance Company, China's largest electronic retailer by sales, plans ...Suning Appliance Company, China's largest electronic retailer by sales, plans to issue new shares on the Shenzhen Stock Exchange.
The move is an attempt to raise funds for a nationwide expansion of logistics bases, which the company believes is a top priority for its long-term development.
"Our target is to establish 60 logistics bases within the next five years, and issuing new shares will provide us with financial support for the expansion plan," Sun Weimin, vice-president of Suning, told China Daily.
Sun didn't give a time frame for the issuance of the new shares.
The retailer issued stock options, convertible into 84.69 million shares, as an incentive to its senior management in August this year. The issue represents 1.21 percent of the company's stock if fully converted.
Suning now operates four distribution centers in Beijing, Nanjing, Shenyang, and Hangzhou, and the construction of further bases in Jinan, Qingdao, and Zhengzhou is under way.
Establishing the distribution centers will cost Suning at least 12 billion yuan ($1.81 billion), as each comprehensive logistic base needs an investment of 200 million yuan, according to Tang Jiarui, an analyst at Everbright Securities.
"Suning's challenge comes from a shortage of distribution services at present. So we will initially improve our logistics system to sustain our long-term store-opening plan," Sun said.
Suning now has more than 1,200 stores across China, and plans to open another 2,000 over the next 10 years, according to Sun."This year, Suning opened 400 stores in China, and the number of store openings next year won't be less than 400," Sun said.
The Nanjing-based retailer posted a profit of 2.83 billion yuan for the first nine months of this year, a 43.6 percent increase year-on-year.
Suning's rival Gome Electrical Appliances Holding Ltd said its profit rose 49.2 percent to 1.44 billion yuan for the first three quarters.
Suning overtook Gome to become China's biggest electronics retailer by sales in 2008, according to data compiled by Bloomberg.
Gome now has 1,255 stores, including 400 privately owned by founder Huang Guangyu, and the company plans to open 700 more by 2014.
Foreign companies have also started to expand their market presence in China's electronics retail industry.
The European electronics retailer Media-Saturn, and Foxconn Technology Group, the world's largest contract manufacturer of electronics, opened the first electronic outlet of their joint venture in Shanghai on Oct 17, aiming to shatter the dominance of the local giants.
Media-Saturn said the company will open 10 stores in Shanghai over the next two years, and will later ramp up its presence in China by opening more than 100 outlets throughout the country.
Nov 24, 2010 3:00 AMAlibaba acquires Shenzhen-based Chinese logistics company One-Touch22 Nov, 2010
Chinese business-to-business e-commerce firm Alibaba.com Limited has entered into an agreement to acquire Shenzhen One-Touch Enterprise Service Limited, a provider...
Chinese business-to-business e-commerce firm Alibaba.com Limited has entered into an agreement to acquire Shenzhen One-Touch Enterprise Service Limited, a provider of one-stop services for exporters in China, for an undisclosed sum.
"Against the backdrop of slower growth of exports and narrowing profit margins for exporters in China, we felt the obligation to help our customers stay competitive and enhance margins," said David Wei, chief executive officer of Alibaba.com. "This acquisition underscores what we mean by 'Work at Alibaba.' One-Touch will bring a lot of synergies to our business and enhance our members' user experience by reducing the time and money they spend managing their export process and procedures."
One-Touch is a provider of comprehensive export-related services tailored to the needs of small and medium-sized enterprises in China, including customs clearance, logistics, cargo insurance, currency exchange, tax refund, financing and certification. With the acquisition of One-Touch, Alibaba.com says it not only gains a strong management and operating team, but also expects to improve the stickiness of its website by adding to the range of export-related value-added SME services available to members in the whole transaction chain.
Nov 22, 2010 7:00 PM
Chinese business-to-business e-commerce firm Alibaba.com Limited has entered into an agreement to acquire Shenzhen One-Touch Enterprise Service Limited, a provider...Chinese business-to-business e-commerce firm Alibaba.com Limited has entered into an agreement to acquire Shenzhen One-Touch Enterprise Service Limited, a provider of one-stop services for exporters in China, for an undisclosed sum.
"Against the backdrop of slower growth of exports and narrowing profit margins for exporters in China, we felt the obligation to help our customers stay competitive and enhance margins," said David Wei, chief executive officer of Alibaba.com. "This acquisition underscores what we mean by 'Work at Alibaba.' One-Touch will bring a lot of synergies to our business and enhance our members' user experience by reducing the time and money they spend managing their export process and procedures."
One-Touch is a provider of comprehensive export-related services tailored to the needs of small and medium-sized enterprises in China, including customs clearance, logistics, cargo insurance, currency exchange, tax refund, financing and certification. With the acquisition of One-Touch, Alibaba.com says it not only gains a strong management and operating team, but also expects to improve the stickiness of its website by adding to the range of export-related value-added SME services available to members in the whole transaction chain.
Nov 22, 2010 7:00 PMChina's Dangdang files for $200 mln US IPO18 Nov, 2010
Web retailer E-Commerce China Dangdang, the Chinese equivalent of Amazon.com, has regist...
Web retailer E-Commerce China Dangdang, the Chinese equivalent of Amazon.com, has registered to hold an IPO with U.S. regulators. It aims to raise up to 200 million dollars in its offering of American depositary shares.
Dangdang says it plans to use the money raised to broaden its product categories and enhance the company's infrastructure. Dangdang, which sells books, media products and general merchandise including beauty and household items, intends to list on the New York Stock Exchange.
The online retailer has been talking about a NASDAQ listing since 2006, but progress was delayed due to unfavorable market conditions. Credit Suisse, Morgan Stanley and Piper Jaffray are among the underwriters for the IPO.
Nov 19, 2010 4:00 AM
Web retailer E-Commerce China Dangdang, the Chinese equivalent of Amazon.com, has regist...Web retailer E-Commerce China Dangdang, the Chinese equivalent of Amazon.com, has registered to hold an IPO with U.S. regulators. It aims to raise up to 200 million dollars in its offering of American depositary shares.
Dangdang says it plans to use the money raised to broaden its product categories and enhance the company's infrastructure. Dangdang, which sells books, media products and general merchandise including beauty and household items, intends to list on the New York Stock Exchange.
The online retailer has been talking about a NASDAQ listing since 2006, but progress was delayed due to unfavorable market conditions. Credit Suisse, Morgan Stanley and Piper Jaffray are among the underwriters for the IPO.
Nov 19, 2010 4:00 AMCold-chain giants seek lucrative China market18 Nov, 2010
United States cold-chain logistics giants are stepping up their operations in China to cash in on a fledgling but rosy market that generates $...
United States cold-chain logistics giants are stepping up their operations in China to cash in on a fledgling but rosy market that generates $14 billion in revenue a year.
Cold-chain logistics is a temperature-controlled storage and distribution network, used primarily for perishables.
Americold, the world's largest cold-chain operator, is building its cold-chain services in China and will increase its investment over the next few years, said Mo Chengying, project manager of China Merchants International Cold Chain (Shenzhen) Co Ltd.
The company is a holding company of China Merchants Americold Logistics Co Ltd, a joint venture which Americold, from Atlanta, has a controlling 49 percent stake.
"We have already built temperature-controlled warehouses in more than a dozen cities and plan to establish an integrated cold-chain logistics network," Mo said.
CR England, the largest refrigerated trucking company in the US, also values China's cold-chain market.
Charles Myers, its international business development director, said it mainly provides international freight forwarding services in China and plans to invest in the cold-chain trucking business through a joint venture with a local firm.
"It takes about $5 million to $10 million to start a transportation business in China, so we believe a joint venture will work better," he said.
Preferred Freezer Services, another US logistics giant, is building a 26,000-square-meter temperature-controlled warehouse in Shanghai, one of the largest single-story cold storage facilities in China.
About 440 million tons of goods need cold-chain services a year in China, more than the 80 million tons available now, Roland Berger Strategy Consultants, one of world's largest consultants, said. It means only about 18 percent of the demand can be met in China; the rate in the US is 85 percent.
"The potential market of cold-chain logistics in China is as much as $14 billion, which will increase with the development of China's food and some other industries," said Jin Yuxiang, project manager of Roland Berger.
Research by the China National Food Industry Association said the shortage of cold-chain services causes more than $10 billion waste just on fruits and vegetables every year.
"China's annual food supply is about $170 billion and will reach $800 billion in 2020," said Zhang Qianming, vice-president of the association's food logistics committee.
"The development of cold-chain logistics will greatly reduce the farmer's post-harvest loss and assure food quality and consumer safety."
A plan by National Development and Reform Commission said the government will complete regulations and standards for the industry and help develop 30 to 50 large-scale cold-chain logistics groups by 2015.
Jin said China's cold-chain logistics industry needs to be consolidated.
"The market share for the top 10 cold-chain logistics firms in China is no more than 5 percent," he said. "The entry of foreign giants will help quicken the consolidation".
Fan Duanwei, president of China Cold Chain Logistics Alliance, advised foreign companies to partner with locals because "China's land and transportation policies are complicated".
Nov 19, 2010 4:00 AM
United States cold-chain logistics giants are stepping up their operations in China to cash in on a fledgling but rosy market that generates $...United States cold-chain logistics giants are stepping up their operations in China to cash in on a fledgling but rosy market that generates $14 billion in revenue a year.
Cold-chain logistics is a temperature-controlled storage and distribution network, used primarily for perishables.
Americold, the world's largest cold-chain operator, is building its cold-chain services in China and will increase its investment over the next few years, said Mo Chengying, project manager of China Merchants International Cold Chain (Shenzhen) Co Ltd.
The company is a holding company of China Merchants Americold Logistics Co Ltd, a joint venture which Americold, from Atlanta, has a controlling 49 percent stake.
"We have already built temperature-controlled warehouses in more than a dozen cities and plan to establish an integrated cold-chain logistics network," Mo said.
CR England, the largest refrigerated trucking company in the US, also values China's cold-chain market.
Charles Myers, its international business development director, said it mainly provides international freight forwarding services in China and plans to invest in the cold-chain trucking business through a joint venture with a local firm.
"It takes about $5 million to $10 million to start a transportation business in China, so we believe a joint venture will work better," he said.
Preferred Freezer Services, another US logistics giant, is building a 26,000-square-meter temperature-controlled warehouse in Shanghai, one of the largest single-story cold storage facilities in China.
About 440 million tons of goods need cold-chain services a year in China, more than the 80 million tons available now, Roland Berger Strategy Consultants, one of world's largest consultants, said. It means only about 18 percent of the demand can be met in China; the rate in the US is 85 percent.
"The potential market of cold-chain logistics in China is as much as $14 billion, which will increase with the development of China's food and some other industries," said Jin Yuxiang, project manager of Roland Berger.
Research by the China National Food Industry Association said the shortage of cold-chain services causes more than $10 billion waste just on fruits and vegetables every year.
"China's annual food supply is about $170 billion and will reach $800 billion in 2020," said Zhang Qianming, vice-president of the association's food logistics committee.
"The development of cold-chain logistics will greatly reduce the farmer's post-harvest loss and assure food quality and consumer safety."
A plan by National Development and Reform Commission said the government will complete regulations and standards for the industry and help develop 30 to 50 large-scale cold-chain logistics groups by 2015.
Jin said China's cold-chain logistics industry needs to be consolidated.
"The market share for the top 10 cold-chain logistics firms in China is no more than 5 percent," he said. "The entry of foreign giants will help quicken the consolidation".
Fan Duanwei, president of China Cold Chain Logistics Alliance, advised foreign companies to partner with locals because "China's land and transportation policies are complicated".
Nov 19, 2010 4:00 AMTesco to increase sourcing from India18 Nov, 2010
UK-based retailer Tesco today said it is increasing sourcing from India and focusing on categories besides clothi...
UK-based retailer Tesco today said it is increasing sourcing from India and focusing on categories besides clothing for its global requirement.
"Tesco does sourcing worth 230 million pounds from India and we are looking to grow this figure in future," Tesco Executive Director Corporate Legal affairs Lucy Neville-Rolfe told reporters here on the sidelines of the India Economic Summit organised by the World Economic Forum.
She said Tesco has just started sourcing products such as grapes and baby corn in the food segment.
"Of the total sourcing that we do from India, 70 per cent is clothing and apparel but we are looking to grow other categories as well such as food," she said.
Commenting on the FDI policy on retail in India, Rolfe said the company is adopting an evolutionary road in the country and will continue to focus on partnership with Tata's retail venture with Trent here.
"We are currently providing support to Tata to run their Star Bazaar chain of retail outlets and we will continue to focus on the partnership," she said.
Rolfe did not comment if Tesco will open its own outlets in the country if FDI is allowed in multi brand retail in India.
Nov 19, 2010 4:00 AM
UK-based retailer Tesco today said it is increasing sourcing from India and focusing on categories besides clothi...UK-based retailer Tesco today said it is increasing sourcing from India and focusing on categories besides clothing for its global requirement.
"Tesco does sourcing worth 230 million pounds from India and we are looking to grow this figure in future," Tesco Executive Director Corporate Legal affairs Lucy Neville-Rolfe told reporters here on the sidelines of the India Economic Summit organised by the World Economic Forum.
She said Tesco has just started sourcing products such as grapes and baby corn in the food segment.
"Of the total sourcing that we do from India, 70 per cent is clothing and apparel but we are looking to grow other categories as well such as food," she said.
Commenting on the FDI policy on retail in India, Rolfe said the company is adopting an evolutionary road in the country and will continue to focus on partnership with Tata's retail venture with Trent here.
"We are currently providing support to Tata to run their Star Bazaar chain of retail outlets and we will continue to focus on the partnership," she said.
Rolfe did not comment if Tesco will open its own outlets in the country if FDI is allowed in multi brand retail in India.
Nov 19, 2010 4:00 AMFedEx buy AFL and Unifreight in India04 Nov, 2010
FedEx recently announced that it will acquire AFL and its affiliate, Unifreight India's logistics, distribution and express businesses.
This is the second...
FedEx recently announced that it will acquire AFL and its affiliate, Unifreight India's logistics, distribution and express businesses.
This is the second acquisition by the US-based company in the past three years, as it looks to increase its presence in the fast-growing Indian air freight sector.
Blue Dart is leading the Rs 3,000-crore Indian air cargo market with a market share of nearly 45%. The cargo market is seeing intense competition with the entry of players such as Reliance. "FedEx will now look to provide one-stop logistics solution," said Indraneel Sen, marketing head of FedEx India.
FedEx, which acquired Prakash Air Freight Express in 2007 for Rs 132 crore, is now planning to strengthen its domestic network with the acquisition of AFL.
But analysts feel that this acquisition has been due. "There is likely to be some consolidation in this sector. With the arrival of Reliance and the increased presence of DHL, it was necessary for FedEx to improve their domestic network. Since GATI was not available for sale, AFL seemed the best," said Sonam Udasi, head of research at IDBI Capital .
Cyrus Guzdar-led AFL had earlier severed its tie-up with DHL, following DHL’s acquisition of Blue Dart in 2002 and was increasingly becoming a peripheral player. The tie-up had allowed AFL to use the DHL brand name.
"AFL will be providing a 20-year old network to FedEx and also a captive business of a decent customer base. In addition, they will also offer the sought-after warehousing facilities which FedEx does not have currently. This is going to give FedEx’s penetration in India a flip and increase the reach of FedEx," said Hemanth DP, COO at GMR Airports , and a logistics expert.
AFL has been in the Indian domestic freight industry for the past six decades, with 50 warehouses and 23 hubs in India. The company also operates to more than 1,400 destinations in India.
FedEx will acquire the logistics, distribution and express businesses of AFL and its affiliate, Unifreight India. The Indian logistics sector often grows at a multiplier rate of two times the GDP growth. And with the infrastructure sector growing at a faster pace, this rate is likely to increase and this is luring large players to invest in the logistics sector. Analysts believe that India will be the fifth-largest country in terms of purchasing power parity (PPP) and this can also add to the growth of the logistics sector.
Founded in 1945, AFL has been a leader in the transportation and logistics industry in the country. A privately-held company, the AFL business offerings included a comprehensive range of distribution and logistics services through a well-established network across India.
Nov 4, 2010 8:00 PM
FedEx recently announced that it will acquire AFL and its affiliate, Unifreight India's logistics, distribution and express businesses.
This is the second...FedEx recently announced that it will acquire AFL and its affiliate, Unifreight India's logistics, distribution and express businesses.
This is the second acquisition by the US-based company in the past three years, as it looks to increase its presence in the fast-growing Indian air freight sector.
Blue Dart is leading the Rs 3,000-crore Indian air cargo market with a market share of nearly 45%. The cargo market is seeing intense competition with the entry of players such as Reliance. "FedEx will now look to provide one-stop logistics solution," said Indraneel Sen, marketing head of FedEx India.
FedEx, which acquired Prakash Air Freight Express in 2007 for Rs 132 crore, is now planning to strengthen its domestic network with the acquisition of AFL.
But analysts feel that this acquisition has been due. "There is likely to be some consolidation in this sector. With the arrival of Reliance and the increased presence of DHL, it was necessary for FedEx to improve their domestic network. Since GATI was not available for sale, AFL seemed the best," said Sonam Udasi, head of research at IDBI Capital .
Cyrus Guzdar-led AFL had earlier severed its tie-up with DHL, following DHL’s acquisition of Blue Dart in 2002 and was increasingly becoming a peripheral player. The tie-up had allowed AFL to use the DHL brand name.
"AFL will be providing a 20-year old network to FedEx and also a captive business of a decent customer base. In addition, they will also offer the sought-after warehousing facilities which FedEx does not have currently. This is going to give FedEx’s penetration in India a flip and increase the reach of FedEx," said Hemanth DP, COO at GMR Airports , and a logistics expert.
AFL has been in the Indian domestic freight industry for the past six decades, with 50 warehouses and 23 hubs in India. The company also operates to more than 1,400 destinations in India.
FedEx will acquire the logistics, distribution and express businesses of AFL and its affiliate, Unifreight India. The Indian logistics sector often grows at a multiplier rate of two times the GDP growth. And with the infrastructure sector growing at a faster pace, this rate is likely to increase and this is luring large players to invest in the logistics sector. Analysts believe that India will be the fifth-largest country in terms of purchasing power parity (PPP) and this can also add to the growth of the logistics sector.
Founded in 1945, AFL has been a leader in the transportation and logistics industry in the country. A privately-held company, the AFL business offerings included a comprehensive range of distribution and logistics services through a well-established network across India.
Nov 4, 2010 8:00 PMChina suppliers believe yuan's appreciation will hurt their export growth28 Oct, 2010
China suppliers believe the yuan's appreciation will affect exports negatively, if the currency appreciates by at least two percent against the US dollar, according to a survey of 239 exporters by Global Sources.
Sixty percent of survey respondents expect some decrease in export orders, ...
China suppliers believe the yuan's appreciation will affect exports negatively, if the currency appreciates by at least two percent against the US dollar, according to a survey of 239 exporters by Global Sources.
Sixty percent of survey respondents expect some decrease in export orders, while eight percent believe sales will be hit significantly because of a stronger yuan.
More than one-third of suppliers said they expect overseas shipments to begin declining when the yuan strengthens by at least two percent. Another 32 percent believe a three percent rise will trigger a slide in sales.
Increasing export prices is the main measure suppliers said they will take to cope with a stronger yuan. A few companies have even started quoting prices based on a 6.6 exchange rate.
"Many companies, particularly those in labor-intensive industries, are running on paper-thin margins and have no room to absorb currency exchange losses. Such businesses are likely to raise prices once the yuan strengthens," said Craig Pepples, Global Sources' chief operating officer. "By working more closely with large buyers, some exporters are focused on adding new features to enhance the value of their products and justify a higher price point."
In addition, suppliers said they plan to take other measures to cope with the yuan's appreciation:
30 percent intend to increase focus on the domestic market;
15 percent of exporters plan to use more imported materials;
10 percent believe focusing on high-end products may bring in higher profit;
7 percent said they may use financial instruments such as foreign currency options or NDF; and
3 percent of suppliers intend to use the yuan as a currency for trade.
Labor shortage still an issue
Sixty-four percent of suppliers said they continue to be in need of workers, even as monthly wages have been increased. The shortage is more prominent in areas outside the Pearl and Yangtze River Delta regions, as salaries there are lower than in the coastal provinces.
In fact, 75 percent of respondents said their employees have sought higher salaries or made other demands in the past three months.
In addition to raising monthly wages and overtime pay further, companies are improving the living conditions in factory dormitories to retain and attract workers. Some dormitory rooms now have individual beds and computers with Internet connection.
High material costs, price competition main challenges
Although there are concerns regarding the yuan's appreciation and the labor shortage, exporters are more worried about rising material costs and intensifying price competition. Suppliers in Guangdong are concerned most about price competition, with 26 percent of respondents based there indicating this as the main challenge.
Among surveyed suppliers:
21 percent said higher material costs was their biggest concern;
20 percent cited price competition as a critical issue;
For 18 percent, the labor shortage was the key challenge; and
12 percent said the yuan's appreciation was their main concern.
Global Sources market analysts interviewed 239 China exporters from the telecom, home products, fashion accessories, garments, textiles, hardware, sports equipment and security products sectors in July and August 2010. Nearly half of the respondents are based in Guangdong province, 24 percent are from Zhejiang and 14 percent from Fujian.
The complete survey can be downloaded for free at http://www.globalsources.com/SITE/CSSURVEY_YUAN.HTM and http://www.globalsources.com/SITE/CSSURVEY_LABOR.HTM.
Oct 28, 2010 8:00 PM
"Many companies, particularly those in labor-intensive industries, are running on paper-thin margins and have no room to absorb currency exchange losses. Such businesses are likely to raise prices once the yuan strengthens," said Craig Pepples, Global Sources' chief operating officer. "By working more closely with large buyers, some exporters are focused on adding new features to enhance the value of their products and justify a higher price point."
In addition, suppliers said they plan to take other measures to cope with the yuan's appreciation:
30 percent intend to increase focus on the domestic market;
15 percent of exporters plan to use more imported materials;
10 percent believe focusing on high-end products may bring in higher profit;
7 percent said they may use financial instruments such as foreign currency options or NDF; and
3 percent of suppliers intend to use the yuan as a currency for trade.
Labor shortage still an issue
Sixty-four percent of suppliers said they continue to be in need of workers, even as monthly wages have been increased. The shortage is more prominent in areas outside the Pearl and Yangtze River Delta regions, as salaries there are lower than in the coastal provinces.
In fact, 75 percent of respondents said their employees have sought higher salaries or made other demands in the past three months.
In addition to raising monthly wages and overtime pay further, companies are improving the living conditions in factory dormitories to retain and attract workers. Some dormitory rooms now have individual beds and computers with Internet connection.
High material costs, price competition main challenges
Although there are concerns regarding the yuan's appreciation and the labor shortage, exporters are more worried about rising material costs and intensifying price competition. Suppliers in Guangdong are concerned most about price competition, with 26 percent of respondents based there indicating this as the main challenge.
Among surveyed suppliers:
21 percent said higher material costs was their biggest concern;
20 percent cited price competition as a critical issue;
For 18 percent, the labor shortage was the key challenge; and
12 percent said the yuan's appreciation was their main concern.
Global Sources market analysts interviewed 239 China exporters from the telecom, home products, fashion accessories, garments, textiles, hardware, sports equipment and security products sectors in July and August 2010. Nearly half of the respondents are based in Guangdong province, 24 percent are from Zhejiang and 14 percent from Fujian.
The complete survey can be downloaded for free at http://www.globalsources.com/SITE/CSSURVEY_YUAN.HTM and http://www.globalsources.com/SITE/CSSURVEY_LABOR.HTM.
Oct 28, 2010 8:00 PMChinese manufacturing base moves inland to cut costs28 Oct, 2010
Foxconn, the Taiwanese company that assembles iPods and is the world's largest contract manufacturer, has hardly been out of the headlin...
Foxconn, the Taiwanese company that assembles iPods and is the world's largest contract manufacturer, has hardly been out of the headlines this year.
In April and May, a wave of suicides swept through its factory in the southern Chinese city of Shenzhen with as many as 10 young workers taking their lives - a gruesome series of events that shone light on the rigid and repetitive working conditions at many Chinese factories.
The company has also been at the forefront of another important development. It plans a radical shake-up of its China operations that would spread much more of its production to inland provinces.
In the case of the products that Foxconn makes for Apple, the company is proposing to shift some of the work to two locations: Tianjin in the north and the central province of Henan. Foxconn is in talks with the local government in Zhengzhou, the capital of Henan, to build a huge plant there.
Foxconn is by no means alone, but part of a broader shift in the economic geography of the country. Part of the manufacturing base is moving from the richer, coastal regions to provinces in the centre. This drift inland is not exactly new - some companies started making such plans a decade ago - but has gathered pace in the past two years.
The move inland could be hugely important for Chinese economy.
By relocating to cheaper cities, it is helping maintain the competitiveness of manufacturing companies, while at the same time stimulating the creation of a new class of modern consumers in these regions.
And the heavy investment is also helping keep the economy growing at a rapid rate at a time when the export sector is facing weak demand in western countries and the real estate market in some of the coastal cities is overheated.
The shift inland is being driven by two forces - government investment and rising costs. China took advantage of the global financial crisis to step up its investments in infrastructure, most notably transport. For instance, there are hugely ambitious plans to expand the high-speed rail network, tripling the amount of track to more than 16,000km by 2020. The government intends to spend more than USD 100bn a year for the next few years on expanding the system, which will account for more than half global rail spending over that period, according to the World Bank.
The interior has been one of the main beneficiaries. One of the new lines links Guangzhou in the south with Wuhan, the city that is becoming a main hub. By cutting the time to travel the 1,100km from 11 hours to just three, the service claims to be the fastest long-distance route in the world. Another new service travels the 505km between Xian and Zhengzhou, another booming central China hub. Many of the road networks in the region have also received huge investments in recent years.
The improved infrastructure has significantly changed the outlook for manufacturing in many parts of central China. "The sense of distance has been completely transformed," says Song Hong, an economic adviser to the Anhui provincial government.
The shift inland to central China is also being pushed by rising costs on the coast. The 30 per cent increase in wages that Foxconn announced in Shenzhen after the suicides may be an extreme example, but salaries are often rising at double-digit rates in the manufacturing areas in the south and in the region around Shanghai in the east.
In industries such as textiles or manufacturing electrical appliances, where the margins are often very small, companies are finding themselves facing two choices - either move overseas, to say Vietnam, or shift production inland to cheaper provinces. The improvement in the logistics in central China means that for many companies, moving inland is the preferred option.
Migration patterns are changing. In the past 30 years, provinces such as Anhui and Jiangxi have been huge exporters of labour to coastal provinces. Now, some of the flow is being reversed, as workers stay closer to home. And that makes central cities more attractive consumer markets - another source of dynamism for the economy. In Wuhan, developers are extending Mall City, a retail complex, which its owners say will be one of the biggest shopping centres in the world, with 400,000 square metres of space, when completed.
Yet while there are powerful forces driving the expansion in the centre, there is one big risk that could derail the boom. The Chinese economy relies heavily on investment but that is especially the case in several central provinces. According to figures published by the Anhui provincial government, investment accounted for more than 90 per cent of GDP last year. In Hubei, the province of which Wuhan is the capital, investment accounted for 64% of GDP.
Such figures could say more about the problems with province-level statistics in China than with the actual economies - if the official figures in Anhui were correct, it would imply that consumption was essentially negligible.
However it is a warning that if Beijing had to scale back investment sharply, for instance if inflation were to take off, central China could witness a jarring slowdown.
Oct 28, 2010 8:00 PM
Foxconn, the Taiwanese company that assembles iPods and is the world's largest contract manufacturer, has hardly been out of the headlin...Foxconn, the Taiwanese company that assembles iPods and is the world's largest contract manufacturer, has hardly been out of the headlines this year.
In April and May, a wave of suicides swept through its factory in the southern Chinese city of Shenzhen with as many as 10 young workers taking their lives - a gruesome series of events that shone light on the rigid and repetitive working conditions at many Chinese factories.
The company has also been at the forefront of another important development. It plans a radical shake-up of its China operations that would spread much more of its production to inland provinces.
In the case of the products that Foxconn makes for Apple, the company is proposing to shift some of the work to two locations: Tianjin in the north and the central province of Henan. Foxconn is in talks with the local government in Zhengzhou, the capital of Henan, to build a huge plant there.
Foxconn is by no means alone, but part of a broader shift in the economic geography of the country. Part of the manufacturing base is moving from the richer, coastal regions to provinces in the centre. This drift inland is not exactly new - some companies started making such plans a decade ago - but has gathered pace in the past two years.
The move inland could be hugely important for Chinese economy.
By relocating to cheaper cities, it is helping maintain the competitiveness of manufacturing companies, while at the same time stimulating the creation of a new class of modern consumers in these regions.
And the heavy investment is also helping keep the economy growing at a rapid rate at a time when the export sector is facing weak demand in western countries and the real estate market in some of the coastal cities is overheated.
The shift inland is being driven by two forces - government investment and rising costs. China took advantage of the global financial crisis to step up its investments in infrastructure, most notably transport. For instance, there are hugely ambitious plans to expand the high-speed rail network, tripling the amount of track to more than 16,000km by 2020. The government intends to spend more than USD 100bn a year for the next few years on expanding the system, which will account for more than half global rail spending over that period, according to the World Bank.
The interior has been one of the main beneficiaries. One of the new lines links Guangzhou in the south with Wuhan, the city that is becoming a main hub. By cutting the time to travel the 1,100km from 11 hours to just three, the service claims to be the fastest long-distance route in the world. Another new service travels the 505km between Xian and Zhengzhou, another booming central China hub. Many of the road networks in the region have also received huge investments in recent years.
The improved infrastructure has significantly changed the outlook for manufacturing in many parts of central China. "The sense of distance has been completely transformed," says Song Hong, an economic adviser to the Anhui provincial government.
The shift inland to central China is also being pushed by rising costs on the coast. The 30 per cent increase in wages that Foxconn announced in Shenzhen after the suicides may be an extreme example, but salaries are often rising at double-digit rates in the manufacturing areas in the south and in the region around Shanghai in the east.
In industries such as textiles or manufacturing electrical appliances, where the margins are often very small, companies are finding themselves facing two choices - either move overseas, to say Vietnam, or shift production inland to cheaper provinces. The improvement in the logistics in central China means that for many companies, moving inland is the preferred option.
Migration patterns are changing. In the past 30 years, provinces such as Anhui and Jiangxi have been huge exporters of labour to coastal provinces. Now, some of the flow is being reversed, as workers stay closer to home. And that makes central cities more attractive consumer markets - another source of dynamism for the economy. In Wuhan, developers are extending Mall City, a retail complex, which its owners say will be one of the biggest shopping centres in the world, with 400,000 square metres of space, when completed.
Yet while there are powerful forces driving the expansion in the centre, there is one big risk that could derail the boom. The Chinese economy relies heavily on investment but that is especially the case in several central provinces. According to figures published by the Anhui provincial government, investment accounted for more than 90 per cent of GDP last year. In Hubei, the province of which Wuhan is the capital, investment accounted for 64% of GDP.
Such figures could say more about the problems with province-level statistics in China than with the actual economies - if the official figures in Anhui were correct, it would imply that consumption was essentially negligible.
However it is a warning that if Beijing had to scale back investment sharply, for instance if inflation were to take off, central China could witness a jarring slowdown.
Oct 28, 2010 8:00 PMSITC forms JV for logistics park biz in Vietnam28 Oct, 2010
SITC International announced that it has signed an agreement with a partner in Vietnam to build and operate a logistics park in Dinh Vu Port ...
SITC International announced that it has signed an agreement with a partner in Vietnam to build and operate a logistics park in Dinh Vu Port in northern Vietnam.
The agreement will see SITC International establish the JV company, SITC-Dinh Logistics Co., Ltd., with Dinh Vu Port Development and Investment Joint Stock Company (DINHVU PORT) in Hai Phong city to develop and conduct professional logistics services between Vietnam and other neighbouring Asian countries, covering door-to-door logistics services ranging from shipping agency, multimodal transportation, less-than-container load, trucking, depot, container freight station, warehousing, forwarding, container repairing services to customer declaration.
The JV company will lease a 30,000-square-metre container yard in Dinh Vu Port on which it will build and operate logistics park facilities for a total investment of US$2 million. SITC International and DINHVU PORT will respectively contribute 49% and 51% to the JV Company in accordance with their shareholding split.
Oct 28, 2010 7:00 PM
SITC International announced that it has signed an agreement with a partner in Vietnam to build and operate a logistics park in Dinh Vu Port ...SITC International announced that it has signed an agreement with a partner in Vietnam to build and operate a logistics park in Dinh Vu Port in northern Vietnam.
The agreement will see SITC International establish the JV company, SITC-Dinh Logistics Co., Ltd., with Dinh Vu Port Development and Investment Joint Stock Company (DINHVU PORT) in Hai Phong city to develop and conduct professional logistics services between Vietnam and other neighbouring Asian countries, covering door-to-door logistics services ranging from shipping agency, multimodal transportation, less-than-container load, trucking, depot, container freight station, warehousing, forwarding, container repairing services to customer declaration.
The JV company will lease a 30,000-square-metre container yard in Dinh Vu Port on which it will build and operate logistics park facilities for a total investment of US$2 million. SITC International and DINHVU PORT will respectively contribute 49% and 51% to the JV Company in accordance with their shareholding split.
Oct 28, 2010 7:00 PMUPS opens new center in Hefei28 Oct, 2010
UPS a global logistics provider, Tuesday opened a shared-services center in Hefei, A...
UPS a global logistics provider, Tuesday opened a shared-services center in Hefei, Anhui Province. With an area of 4,456 square meters, it is the largest center of its kind in the Asia Pacific region.
UPS also recenty released third quarter results for this year, as its global revenue grew 9.3 percent generating $1.5 billion in adjusted operating profit, a 62 percent increase.
Asia Pacific growth was led by China and Vietnam, both of which saw a more than 50 percent export volume increase compared to 2009.
Oct 28, 2010 7:00 PM
UPS a global logistics provider, Tuesday opened a shared-services center in Hefei, A...UPS a global logistics provider, Tuesday opened a shared-services center in Hefei, Anhui Province. With an area of 4,456 square meters, it is the largest center of its kind in the Asia Pacific region.
UPS also recenty released third quarter results for this year, as its global revenue grew 9.3 percent generating $1.5 billion in adjusted operating profit, a 62 percent increase.
Asia Pacific growth was led by China and Vietnam, both of which saw a more than 50 percent export volume increase compared to 2009.
Oct 28, 2010 7:00 PMGLP Surges on Debut in Singapore's Second Biggest IPO21 Oct, 2010
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Singapore wealth fund GIC's logistics unit GLP surged as much as 12 percent on its debut on Monday, as Asia's ninth-biggest public offering this year at...
Singapore wealth fund GIC's logistics unit GLP surged as much as 12 percent on its debut on Monday, as Asia's ninth-biggest public offering this year attracted investors due to its China exposure.
Global Logistic Properties (GLP) is set to raise S$3.9 billion ($3.01 billion) if it exercises its greenshoe option, making it Singapore's second biggest IPO since SingTel's S$4 billion float in 1993.
"GLP offers potentially higher growth prospects with their property portfolio not centered in Singapore alone," said Moh Tze Yang, an analyst at SIAS Research.
"GLP's prospects in China look strong with industrial production a key growth driver behind China's economy."
GLP, which owns industrial and logistic properties in China and Japan, is the first listing of a firm majority-owned by the Government of Singapore Investment Corp (GIC), one of the world's biggest sovereign wealth funds.
By the midday break, GLP shares traded at S$2.16, with over 337 million shares changing hands -- compared to an IPO price of S$1.96, a gain of 10 percent. It hit an intraday high of S$2.19.
The share offering from GLP takes place against a backdrop of a booming Asia IPO market. Several large IPOs in Asia take place in coming weeks and these include AIA, the Asian life insurance arm of American International Group, which aims to raise up to $20.5 billion and a proposed $4.2 billion offering by Malaysia's Petronas Chemicals.
This underscores the ample liquidity in Asian equity markets, which have seen solid gains this year, helped by a pick up in economic growth.
Singapore's benchmark Straits Times Index has risen 10 percent so far this year, compared with a 11 percent gain in the MSCI index of Asia-Pacific stocks excluding Japan.
GLP is the first of two large IPOs that make their debut in Singapore this week -- Mapletree Industrial Trust, which could raise as much as S$940 million, starts trading on Thursday.
Oct 21, 2010 6:00 PM
Singapore wealth fund GIC's logistics unit GLP surged as much as 12 percent on its debut on Monday, as Asia's ninth-biggest public offering this year at...Singapore wealth fund GIC's logistics unit GLP surged as much as 12 percent on its debut on Monday, as Asia's ninth-biggest public offering this year attracted investors due to its China exposure.
Global Logistic Properties (GLP) is set to raise S$3.9 billion ($3.01 billion) if it exercises its greenshoe option, making it Singapore's second biggest IPO since SingTel's S$4 billion float in 1993.
"GLP offers potentially higher growth prospects with their property portfolio not centered in Singapore alone," said Moh Tze Yang, an analyst at SIAS Research.
"GLP's prospects in China look strong with industrial production a key growth driver behind China's economy."
GLP, which owns industrial and logistic properties in China and Japan, is the first listing of a firm majority-owned by the Government of Singapore Investment Corp (GIC), one of the world's biggest sovereign wealth funds.
By the midday break, GLP shares traded at S$2.16, with over 337 million shares changing hands -- compared to an IPO price of S$1.96, a gain of 10 percent. It hit an intraday high of S$2.19.
The share offering from GLP takes place against a backdrop of a booming Asia IPO market. Several large IPOs in Asia take place in coming weeks and these include AIA, the Asian life insurance arm of American International Group, which aims to raise up to $20.5 billion and a proposed $4.2 billion offering by Malaysia's Petronas Chemicals.
This underscores the ample liquidity in Asian equity markets, which have seen solid gains this year, helped by a pick up in economic growth.
Singapore's benchmark Straits Times Index has risen 10 percent so far this year, compared with a 11 percent gain in the MSCI index of Asia-Pacific stocks excluding Japan.
GLP is the first of two large IPOs that make their debut in Singapore this week -- Mapletree Industrial Trust, which could raise as much as S$940 million, starts trading on Thursday.
Oct 21, 2010 6:00 PMMapletree Industrial Trust surges 25% on trading debut21 Oct, 2010
Mapletree Industrial Trust (MIT) units surged on its trading debut to close about 25 per cent higher than its offering price of S$0.93.
It was the most traded stock on the S...
Mapletree Industrial Trust (MIT) units surged on its trading debut to close about 25 per cent higher than its offering price of S$0.93.
It was the most traded stock on the Singapore Exchange (SGX) with a volume of 345 million.
It hit an intraday high of S$1.20, before ending the day at S$1.16.
"I think the investors should be laughing all the way to the bank today," said Samuel Chng, Assistant VP of Equity Sales at AmFraser Securities.
MIT is the largest Singapore Real Estate Investment Trust (REIT) IPO to date.
The Temasek-linked trust issued a total of 1.28 billion units at an IPO price of S$0.93 per unit, raising S$1.19 billion.
Chng said: "I think it's within expectations, as you can see from the last two IPOs - from Yamada and GLP(Global Logistic Properties). Currently their closing prices are still above the IPO price.
"So for MIT, the 25 per cent above the IPO is reasonable. If the market is still performing well, I think this price is still sustainable in the near future."
MIT's IPO portfolio of 70 properties in Singapore is valued at about S$2.1 billion. Market watchers said the REITs industry in Singapore has more capacity to grow.
"I don't think there's a bubble at this point in time. Asia is a developing REIT market; it's getting bigger and more well-received. (There's) more interest in Asia's developing REIT market and Singapore is one of the markets (with) a growing REITs market. So I don't think we're quite at the end of this trend," said Wong Sui Jau, GM of Fundsupermart.
Analysts said the positive performance of the MIT IPO comes as no surprise. They said this is a reflection of how well market sentiments are.
Analysts said how well an IPO does depend on factors like price and the fundamentals of a company. And they believe the IPO market will continue to do well, especially in the near term.
Oct 21, 2010 6:00 PM
Mapletree Industrial Trust (MIT) units surged on its trading debut to close about 25 per cent higher than its offering price of S$0.93.
It was the most traded stock on the S...Mapletree Industrial Trust (MIT) units surged on its trading debut to close about 25 per cent higher than its offering price of S$0.93.
It was the most traded stock on the Singapore Exchange (SGX) with a volume of 345 million.
It hit an intraday high of S$1.20, before ending the day at S$1.16.
"I think the investors should be laughing all the way to the bank today," said Samuel Chng, Assistant VP of Equity Sales at AmFraser Securities.
MIT is the largest Singapore Real Estate Investment Trust (REIT) IPO to date.
The Temasek-linked trust issued a total of 1.28 billion units at an IPO price of S$0.93 per unit, raising S$1.19 billion.
Chng said: "I think it's within expectations, as you can see from the last two IPOs - from Yamada and GLP(Global Logistic Properties). Currently their closing prices are still above the IPO price.
"So for MIT, the 25 per cent above the IPO is reasonable. If the market is still performing well, I think this price is still sustainable in the near future."
MIT's IPO portfolio of 70 properties in Singapore is valued at about S$2.1 billion. Market watchers said the REITs industry in Singapore has more capacity to grow.
"I don't think there's a bubble at this point in time. Asia is a developing REIT market; it's getting bigger and more well-received. (There's) more interest in Asia's developing REIT market and Singapore is one of the markets (with) a growing REITs market. So I don't think we're quite at the end of this trend," said Wong Sui Jau, GM of Fundsupermart.
Analysts said the positive performance of the MIT IPO comes as no surprise. They said this is a reflection of how well market sentiments are.
Analysts said how well an IPO does depend on factors like price and the fundamentals of a company. And they believe the IPO market will continue to do well, especially in the near term.
Oct 21, 2010 6:00 PMAlibaba plans logistics investments in China20 Oct, 2010
China's largest e-commerce firm Alibaba Group plans to invest heavily in logistics with the aim of building 32 distribution centres in Chin...
China's largest e-commerce firm Alibaba Group plans to invest heavily in logistics with the aim of building 32 distribution centres in China within the next 2 years, sources told Reuters recently.
The plan, in its initial stage, has no detailed investment amount but does not exclude the possibility of setting up a separate company, said one source with knowledge of the matter.
Another source said the firm wanted to expand its reach to 52 cities in two years from 20 cities. It runs its current network through external partners and distribution centres.
Both sources declined to be named as the matter is not yet public.
The expansion will enable the firm to streamline the logistics process and spur growth at one of its crown jewels, Taobao, said Paul Wuh, an analyst with Samsung Securities.
"Last year over half of the packages shipped in China were Taobao transactions, this is an industry that was built on and expanded because of Taobao," said one source.
China's e-commerce market was worth 119.1 billion yuan ($17.93 billion) in transaction value in the second quarter, of which Taobao had a 75.2 percent market share.
With about 30 percent of China's 420 million strong Internet users shopping online, one of the biggest barriers to e-commerce is logistics.
Jack Ma, the charismatic founder of the company in which Yahoo Inc (YHOO.O) owns a 40 percent stake, believes that China's logistics market is fragmented and does not offer optimal customer service, one source said.
"From the group perspective, Taobao is a leading e-commerce firm in China with logistics as a factor limiting growth," Wuh said.
"It doesn't matter what form the investment takes, the fact they are trying out logistics, which is one of the stumbling blocks to growth in the industry, is a positive for e-commerce and Taobao," he said.
Alibaba Group is the parent company of China's top listed e-commerce firm Alibaba.com (1688.HK), China's top e-commerce firm with a consumer focus, Taobao and the country's leading e-payment, service Alipay.
Alibaba Group was a cornerstone investor in Global Logistic Properties GLPL.SI recent initial public offering. GLP is the logistics unit of Singapore's sovereign wealth fund GIC [GIC.UL] (Editing by Jacqueline Wong)
Oct 21, 2010 0:00 AM
China's largest e-commerce firm Alibaba Group plans to invest heavily in logistics with the aim of building 32 distribution centres in Chin...China's largest e-commerce firm Alibaba Group plans to invest heavily in logistics with the aim of building 32 distribution centres in China within the next 2 years, sources told Reuters recently.
The plan, in its initial stage, has no detailed investment amount but does not exclude the possibility of setting up a separate company, said one source with knowledge of the matter.
Another source said the firm wanted to expand its reach to 52 cities in two years from 20 cities. It runs its current network through external partners and distribution centres.
Both sources declined to be named as the matter is not yet public.
The expansion will enable the firm to streamline the logistics process and spur growth at one of its crown jewels, Taobao, said Paul Wuh, an analyst with Samsung Securities.
"Last year over half of the packages shipped in China were Taobao transactions, this is an industry that was built on and expanded because of Taobao," said one source.
China's e-commerce market was worth 119.1 billion yuan ($17.93 billion) in transaction value in the second quarter, of which Taobao had a 75.2 percent market share.
With about 30 percent of China's 420 million strong Internet users shopping online, one of the biggest barriers to e-commerce is logistics.
Jack Ma, the charismatic founder of the company in which Yahoo Inc (YHOO.O) owns a 40 percent stake, believes that China's logistics market is fragmented and does not offer optimal customer service, one source said.
"From the group perspective, Taobao is a leading e-commerce firm in China with logistics as a factor limiting growth," Wuh said.
"It doesn't matter what form the investment takes, the fact they are trying out logistics, which is one of the stumbling blocks to growth in the industry, is a positive for e-commerce and Taobao," he said.
Alibaba Group is the parent company of China's top listed e-commerce firm Alibaba.com (1688.HK), China's top e-commerce firm with a consumer focus, Taobao and the country's leading e-payment, service Alipay.
Alibaba Group was a cornerstone investor in Global Logistic Properties GLPL.SI recent initial public offering. GLP is the logistics unit of Singapore's sovereign wealth fund GIC [GIC.UL] (Editing by Jacqueline Wong)
Oct 21, 2010 0:00 AMCoca-Cola has ‘significant plans’ to expand in Malaysia29 Sep, 2010
The construction of American beverage giant The Coca-Cola Co’s bottling plant at Bandar Enstek’s techpark in Nilai, Negri Sembilan, is 75% read...
The construction of American beverage giant The Coca-Cola Co’s bottling plant at Bandar Enstek’s techpark in Nilai, Negri Sembilan, is 75% ready and expected to be completed by January, according to a top official.
"We are moving along a little bit faster than we expected and we are very excited about this project," said Coca-Cola Pacific Group president Glenn Jordan.
Jordan, who was speaking to a Malaysian trade and investment promotion delegation led by International Trade and Industry Minister Datuk Seri Mustapa Mohamed here on Sunday, said the company, the largest soft-drink maker in the world, had "significant plans" to expand its business in Malaysia.
"Over the next few years, we would like to expand our core business there," he said.
Datuk Seri Mustapa Mohamed says Coca-Cola’s investment signals its confidence in Malaysia.
Earlier this year, Coca-Cola said it chose to set up the 123,024 sq m bottling plant at the techpark largely due to attractive logistics costs.
It said then that it hoped to have the plant operational before the agreement with current bottler Fraser & Neave Holdings Bhd expired in September 2011.
To be constructed according to the Leadership in Energy and Environment Design certification which is a global standard for eco-friendly buildings, the plant is expected to create more than 6,000 job opportunities.
"The plans are all on track, the Malaysian market is very important to us and we will deliver on our promise of investments," Jordan said.
Coca-Cola will invest RM1bil over the next five years in Malaysia including in the plant, it said in March, without revealing its exact local beverage market share.
Meanwhile, Mustapa said he valued the confidence Coca-Cola had in Malaysia.
"We value this investment (as) it is clearly a sign of confidence in us. The prospects for the Malaysian economy are indeed very good," he said.
Mustapa is scheduled to have roundtable meetings with selected US companies here before departing for Philadelphia later today, Malaysian time.
The week-long mission, which covers Atlanta, Philadelphia and Washington, is his first formal trip as a Miti delegation chief to the United States.
Earlier on Sunday, he hosted a meeting and luncheon with the Malaysian Association of Georgia as well as Malaysian students studying in the neighbouring states and cities.
Sep 30, 2010 4:00 AM
The construction of American beverage giant The Coca-Cola Co’s bottling plant at Bandar Enstek’s techpark in Nilai, Negri Sembilan, is 75% read...The construction of American beverage giant The Coca-Cola Co’s bottling plant at Bandar Enstek’s techpark in Nilai, Negri Sembilan, is 75% ready and expected to be completed by January, according to a top official.
"We are moving along a little bit faster than we expected and we are very excited about this project," said Coca-Cola Pacific Group president Glenn Jordan.
Jordan, who was speaking to a Malaysian trade and investment promotion delegation led by International Trade and Industry Minister Datuk Seri Mustapa Mohamed here on Sunday, said the company, the largest soft-drink maker in the world, had "significant plans" to expand its business in Malaysia.
"Over the next few years, we would like to expand our core business there," he said.
Datuk Seri Mustapa Mohamed says Coca-Cola’s investment signals its confidence in Malaysia.
Earlier this year, Coca-Cola said it chose to set up the 123,024 sq m bottling plant at the techpark largely due to attractive logistics costs.
It said then that it hoped to have the plant operational before the agreement with current bottler Fraser & Neave Holdings Bhd expired in September 2011.
To be constructed according to the Leadership in Energy and Environment Design certification which is a global standard for eco-friendly buildings, the plant is expected to create more than 6,000 job opportunities.
"The plans are all on track, the Malaysian market is very important to us and we will deliver on our promise of investments," Jordan said.
Coca-Cola will invest RM1bil over the next five years in Malaysia including in the plant, it said in March, without revealing its exact local beverage market share.
Meanwhile, Mustapa said he valued the confidence Coca-Cola had in Malaysia.
"We value this investment (as) it is clearly a sign of confidence in us. The prospects for the Malaysian economy are indeed very good," he said.
Mustapa is scheduled to have roundtable meetings with selected US companies here before departing for Philadelphia later today, Malaysian time.
The week-long mission, which covers Atlanta, Philadelphia and Washington, is his first formal trip as a Miti delegation chief to the United States.
Earlier on Sunday, he hosted a meeting and luncheon with the Malaysian Association of Georgia as well as Malaysian students studying in the neighbouring states and cities.
Sep 30, 2010 4:00 AMHonda to overhaul sourcing method for emerging markets push29 Sep, 2010
Honda Motor Co will overhaul its sourcing strategy by ditching its one-spec-fits-all method on global car models to better compete with Hyundai Motor and o...
Honda Motor Co will overhaul its sourcing strategy by ditching its one-spec-fits-all method on global car models to better compete with Hyundai Motor and others in emerging markets, an executive said on Tuesday.
Honda, Japan's No.2 automaker, has until now used a common blueprint for components on cars built and sold globally for efficiency's sake, and to offer consumers around the world the same specifications for those models.
But Masaya Yamashita, head of Honda's purchasing operations, said that strategy was outdated and making some of its cars unnecessarily pricier in China, India and other regions at a time when South Korea's Hyundai and others were boosting sales with cars that were a better fit for local consumers.
"Hyundai has become a very tough competitor for us and they're growing at an incredible pace, along with Chinese and Indian automakers, because they're looking at components from a new angle," Yamashita told Reuters in an interview.
"The stereotype used to be that the cheap prices came from lower quality, but that's no longer the case. We need to operate with a brand new standard for components," he said.
By coming up with several different blueprints on vehicle components, Honda would aim to slash purchasing costs on the next-generation Fit subcompact, one of its best-selling models, by about 20 to 30 percent in emerging markets, Yamashita said. The fully remodeled Fit, expected around 2012 or later, would be the first car to reflect the new sourcing method, he said.
Honda builds the Fit, called Jazz in some markets, in Japan, China, India, Thailand, Indonesia, Britain and Brazil, and currently uses the same design and materials for most components in all seven countries.
That means components must meet the highest common denominator for specifications, leading to steep costs, he said.
"For example, if we were designing a cup, we're designing one that could withstand the intense heat in India all the way up to the freezing weather in Canada, and that's a waste."
Sep 30, 2010 4:00 AM 
Honda Motor Co will overhaul its sourcing strategy by ditching its one-spec-fits-all method on global car models to better compete with Hyundai Motor and o...Honda Motor Co will overhaul its sourcing strategy by ditching its one-spec-fits-all method on global car models to better compete with Hyundai Motor and others in emerging markets, an executive said on Tuesday.
Honda, Japan's No.2 automaker, has until now used a common blueprint for components on cars built and sold globally for efficiency's sake, and to offer consumers around the world the same specifications for those models.
But Masaya Yamashita, head of Honda's purchasing operations, said that strategy was outdated and making some of its cars unnecessarily pricier in China, India and other regions at a time when South Korea's Hyundai and others were boosting sales with cars that were a better fit for local consumers.
"Hyundai has become a very tough competitor for us and they're growing at an incredible pace, along with Chinese and Indian automakers, because they're looking at components from a new angle," Yamashita told Reuters in an interview.
"The stereotype used to be that the cheap prices came from lower quality, but that's no longer the case. We need to operate with a brand new standard for components," he said.
By coming up with several different blueprints on vehicle components, Honda would aim to slash purchasing costs on the next-generation Fit subcompact, one of its best-selling models, by about 20 to 30 percent in emerging markets, Yamashita said. The fully remodeled Fit, expected around 2012 or later, would be the first car to reflect the new sourcing method, he said.
Honda builds the Fit, called Jazz in some markets, in Japan, China, India, Thailand, Indonesia, Britain and Brazil, and currently uses the same design and materials for most components in all seven countries.
That means components must meet the highest common denominator for specifications, leading to steep costs, he said.
"For example, if we were designing a cup, we're designing one that could withstand the intense heat in India all the way up to the freezing weather in Canada, and that's a waste."
Sep 30, 2010 4:00 AMVertical Solutions
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