China Railway Express to Incorporate Railway Parcel Express
A source from China Railway Express Co., Ltd. said that it would complete incorporation with China Railway Parcel Express Co., Ltd. within this year.
The incorporated company will be still named China Railway Express Co., Ltd. with a registered capital of CNY 2 billion. China Railway Express wants to obtain revenues of CNY 6 billion in 2006.
China Railway Express and China Railway Parcel Express are transportation companies under the lead of the Ministry of Railways of China. China Railway Parcel Express is controlled by 15 shareholders and China Railway Foreign Service Corp. takes a 51percent stake and Harbin Railway Bureau, Shenyang Railway Bureau, Beijing Railway Bureau, and Guangzhou Railway Group Corp. hold the rest 49percent.
China Railway Parcel Express has a 42.6percent stake in China Railway Express. Industry analysts pointed out that incorporation of the two companies was indeed a move for China's railway express operator to enhance its presence in the Chinese market.
Feng Shiqi, general manager for China Railway Express, said that global four express giants UPS, FedEx, DHL, and TNT had made inroads into the Chinese market and appeared to expand their businesses here.
Federal Express-DTW Co., Ltd., the joint venture between FedEx Express and Tianjin DTW Group Co., Ltd., announced that five branches respectively located in Zhongshan, Foshan, Huizhou, Zhuhai, and Jiangmen of Southern China's Guangdong Province were simultaneously put into operation recently.
UPS is said to start a non-stop flight from the Liuting International Airport of Qingdao, Shandong, Eastern China, to South Korea. UPS is the first US air express and cargo operation to start business in Qingdao. The service will fly five times a week between Qingdao and Incheon, South Korea.
Booming economy in Qingdao absolutely encourages UPS to invest there. The GDP of Qingdao in 2004 hit CNY 216.4 billion. Until now, 90 companies of the World Top 500 have made accumulative investments of USD 1.75 billion there.
In addition, UPS signed a Memorandum of Understanding with Shanghai Airport (Group) Co., Ltd. on July 7, 2005 to build its international air transfer hub in Shanghai Pudong International Airport in 2007.
China Railway Express is set to step into the small express mails segment after incorporation and intends to increase yearly turnover by 200percent to CNY 6 billion and to lead the segment in 2006.
Yang Daoyuan, general manager for China Railway Express Guangzhou Branch, said that the incorporation would help expand businesses in the Yangtze River Delta, the Pearl River Delta, the Bohai Sea Region and the three provinces in northeastern China.
In addition, the Ministry of Railways has teamed up with China State Post Bureau to launch mail express service as the former increase railway speed for the fifth time. Both sides form a joint venture called Xinshisu Express Co., Ltd. (temporarily named) to run the business. China Railway Parcel Express holds a 41percent stake in the venture.
For the moment, Xinshisu Express has started businesses among Beijing, Northern China; Harbin, Heilongjiang, Northeastern China; Shanghai, Eastern China; and Guangzhou, Guangdong, Southern China. Xinshisu Express will make full use of networks of both the Ministry of Railways and China State Post Bureau to provide express services for multinational logistics, manufacturing and retail companies involving in household appliance, garments, medicine, auto components and parts, IT and apparatus.
