Citic Resources sues Qingdao Port
Sep-30-2014 By : fcccadmin
Citic Resources has filed a lawsuit against Qingdao Port International, demanding USD108 million in compensation if its fails to deliver base metals retained by the authorities as part of a fraud investigation. Citic Resources claims it suffered a severe loss from its inability to dispose of 223,270 tons of sandy metallurgical grade aluminum and 5,004 tons of electrolytic copper as a result of Qingdao Port’s refusal to deliver the metals. Meanwhile, HSBC and ABN Amro Bank sued Chen Jihong, the Singapore national said to be at the center of a probe over whether metals were pledged multiple times as collateral for loans. He has been detained in China. HSBC has asked Singapore’s High Court to liquidate Chen’s Zhong Jun Resources after it failed to repay USD4.3 million. ABN Amro won an order for Chen to pay USD22 million owed under a loan agreement with Zhong Jun and another of his companies. Yu Shengping of Qingdao Port International’s Legal Department, told the South China Morning Post that all parties would have to wait for the result of the criminal investigation before there could be any meaningful progress in civil actions. “This incident has brought damage to the reputation of Qingdao Port. We are also victims,” said Yu. The court held its first hearing earlier this month. Commodity financing has come to the fore because millions of dollars were lent by banks to groups or firms using metals or agricultural goods as collateral. Lenders are deeply worried that in some cases, the same commodity was used for loans multiple times.
Swire Pacific Cold Storage inaugurates facility in Shanghai
By : fcccadmin
Swire Pacific Cold Storage, the world’s third-largest in terms of capacity, inaugurated a CNY440 million facility in Shanghai as the company continues to expand into China’s rapidly growing cold chain logistics industry. The facility in Fengxian district has a capacity to provide 50,000 pallet positions, or 354,000 cubic meters of temperature-controlled space. It is the company’s first wholly-owned property on the Chinese mainland. “The opening of this new facility, one of the largest and most advanced of its kind in east China, is a significant milestone,” J.B. Rae-Smith, Swire Pacific’s Executive Director of the Trading & Industrial Division, said at the opening. “Our long-term plan is to build a nationwide cold chain logistics network of 13 large-scale cold storage facilities by 2020.” In addition to the Shanghai facility, Swire Pacific’s new facility in Langfang, Hebei province, is having trial operations. Two more cold storage facilities are under construction in Nanjing, Jiangsu province, and Ningbo, Zhejiang province. A third is being planned for Chengdu, Sichuan province. All these facilities are scheduled to commence operation between 2015 and 2016. The company’s first facility on the Chinese mainland, a joint venture with Guangdong Foodstuffs, started operations in 2008.
Logistics upgrade needed to support China’s e-commerce boom
May-27-2014 By : agxadmin
Alibaba’s plans for a giant initial public offering (IPO) in New York highlight vast potential for e-commerce in China – and the weak link the logistics industry must fix if explosive growth projections are to be reached. The ageing warehouses that supply goods to customers in China are lacking the automation and state-of-the-art technology that has fueled the rise in the United States and Europe of amazon.com. By 2020, China’s e-commerce sector will be larger than those of the U.S., Britain, Japan, Germany and France combined, consultancy KPMG said in a recent report. To cope with the China surge, as much as USD2.5 trillion may need to be invested in buying land and constructing warehouses alone over the next decade and a half. “Over the next 15 to 20 years, the real cost of building warehouses is going to be staggering,” said Jeff Schwarz, co-founder of Global Logistic Properties, the biggest foreign builder of logistics facilities in China. With each new facility the size of several large sports stadiums, that translates to about 2.4 billion square meters of new warehouses – an area close to two-thirds of the total land mass of Taiwan. Global Logistic estimates the USD2.5 trillion needed over the next 15 years will still only increase per capita fully-automated modern warehouse space to just a third of that in the U.S. Alibaba controls 80% of all online retail in China, and its logistics partners delivered five billion packages last year. Warehousing is a key to the supply chain across the e-commerce industry. Boston has more modern warehouses than the whole of China, says Stuart Ross, Director of Industrial at property consultancy firm JLL China. Less than 20% of China’s warehouses are categorized as modern. Improving the logistics of China’s warehouses has been prioritized by Alibaba co-founder Jack Ma, who announced a plan to lead a consortium to invest USD16 billion in the first phase of building Alibaba’s national logistics business unit. Since the beginning of last year, about USD22 billion has been earmarked by buyout firms, including Blackstone and Carlyle, and private companies, to buy land and build new warehouses in China, the South China Morning Post reports.
Logistics firms wary of PRD economic zones
Apr-30-2014 By : agxadmin
Officials in China’s new economic zones are hoping cheap warehousing and hassle-free customs procedures will encourage logistics and storage firms supplying Hong Kong’s domestic market to relocate to the Pearl River Delta. But not many firms seem interested in moving. “It is almost unheard of to have any product that is for local Hong Kong consumption to be stored in China because the turnaround lead time is not workable,” said Raymond Chan, General Manager of logistics firm Cargo Freight Services. Last year the central government announced plans to establish three development zones in Nansha, Hengqin and Qianhai along the Pearl River, part of a wider effort to develop and integrate southern China, Hong Kong and Macao into a single economic hub. Initiatives including preferential tax treatment and liberalized financial reforms were pitched as incentives to lure business. Another idea is to create a seamless customs zone connecting Hong Kong to bonded warehouses and free-trade port areas in the delta. “The policy directions have been given out but the details are not yet finished,” said Hong Kong Trade and Development Council Economist Wing Chu. The Qianhai economic zone in Shenzhen has 300 registered logistics firms, including 130 from Hong Kong. This represents 15.2% of companies in the zone, according to local government data from October last year. The 800 square kilometer site at Nansha includes an established logistics park, one of two deep-water ports on the mainland, and a rail-road-sea transport network. Last month Kerry Logistics Network Chairman George Yeo visited Zhuhai seeking land for warehouses. Completion of the Hong Kong-Zhuhai-Macao bridge would provide more opportunities for logistics providers as there was a lack of land and warehouse facilities in Hong Kong, Yeo said. Oriental Logistics Managing Director Gilbert Lau said limited warehouse space had contributed to rents doubling in recent years, forcing up consumer prices and pushing logistics operators further into the New Territories. Despite the excess capacity and lower warehouse rents in the mainland’s southern areas, Hong Kong logistics firms are wary of storing goods there given final-mile delivery costs and border formalities, the South China Morning Post reports.
Kerry Logistics planning Hong Kong IPO
Dec-12-2013 By : agxadmin
Kerry Logistics Network, the logistics unit of Kerry Properties, is planning an initial pubic offering (IPO) that could raise up to HKD2.2 billion. Established in 1981, the Hong Kong-based third-party logistics service provider plans to use the freshly raised capital to develop logistics facilities on the mainland and in Southeast Asian markets. The company plans to strengthen its presence in China, which represents about 45% of its overall revenue, and to expand into mainland cities by building a 1.3 million square foot logistics center, which is set to commence construction next year. Trading of the company’s shares is due to start on December 19. About 27% of Kerry Logistics’ 30 million sq ft of logistics space is on the mainland. It has expanded its automotive parts distribution center in Kunshan with the 360,000 sq ft center set to open next year. It also aims to build an 878,000 sq ft logistics center in Thailand. Revenue from the mainland rose 8.4% to HKD4.2 billion in the first half of the year, while that from Southeast Asia expanded 20.1% to HKD1.4 billion from newly acquired business in Vietnam last year and the start of a regional logistics hub in Singapore in the first quarter. The logistics operator’s operating margin, a measure of profitability, rose to 12.4% in June up from 8.2% in December last year. Kerry Properties is part of the Kerry Group. Kerry manages 39 million square feet of warehouses and logistics centers in China and Asean countries, of which over 11 million sq ft is in the mainland.
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