Kerry Logistics is Going the Other Way

Saturday, March 31, 2007 9:07
Comments Off on Kerry Logistics is Going the Other Way

For years, western logistics service providers have been trying to crack the China market, but for a few, they have been trying to just stabilize themselves enough so that they can get out of the China market.

To date, there haven’t been many deals that gave Chinese firms access to international markets (outside of sales offices). A few months ago we highlighted the acquisition by IDS Logistics, part of the Li & Fung Group, purchasing a small provider focused on textiles, but outside of that most arrangements have been little more than to share clients.

However, this week Kerry logistics announced two deals that suggest they have crack the China egg and are not taking their first steps towards building their international network… in reverse.

First, Kerry Logistics is a HK based provider owned by the Kwok Group, it is particularly strong in the mainland and southeast Asia. In addition to Kerry, IDS Logistics and HTB Logistics have done well in developing in-house partners and external partnerships to provide integrated China services.Kerry Logsitics

However, until recently all three have be focused almost solely on Asia.

So, with their announcement today that they have purchased a 51% stake in Chennai (see article here), Kerry has taken a step into building their India/ sub continent Asia platform. For many western firms like DHL, UPS, and FedEx they were given a choice, China or India, .

In addition to the JV, Executive director Robert Tan said:

“We will be soon setting up distribution centers and warehouses in two to five places to cater to the growing demand from engineering, commodities, chemicals, medical products, electronic hardwares, auto components and other areas.”

Secondly, a couple days earlier than that, Wincanton announced a JV partnership with Kerry to be its Asia provider. Martin Taylor, MD or retails was quoted on Roadtransport as saying

Wincanton partnered with Kerry after visiting eight logistics companies in China. Despite its base in Hong Kong, Kerry has “good connections,” with China and “fantastic warehouses”

It is becoming increasing clear that Kerry is taking steps towards becoming one of the first Asian logistics providers who are capable of providing integrated multi-modal services.

Stating that they are going to be making such large investments in India, and partnering with firms that need Asia partners to fulfill global contracts are both strong indications that Kerry has the business to support expansionary strategies… and it is willing to do so.
For those in Atlanta, Amsterdam, and Louisville, Kerry is no doubt a firm that is respected in terms of what they have done in Asia, particularly China. The question is whether or not they are to be feared, and it so, what can be done.

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