Toll aims to buy Chinese logistics firms
Toll Holdings, Australia’s leading transport and logistics group, is seeking to acquire logistics companies in China to expand its growing Asian business. It also plans to use its majority stake in domestic airline Virgin Blue to grow its air freight business.
Toll CEO Paul Little told the company’s AGM this week that Toll was continuing to seek small “ bolt-on” acquisitions to enhance its Asian services. Speaking later to Australian media, he said any deals in China would be “very significant” in terms of bringing value to its transport and logistics services, particularly from China to Australia.
The Australian market leader recently re-branded SembLog, the Singapore-based logistics company it acquired earlier this year, as Toll Asia in order to set the stage for expanding its logistics business through Asia. China is now a major importer of Australian raw materials while Australia imports large amounts of Chinese-made products.
Little also indicated that Toll Holdings will retain its 63% controlling stake in low-cost carrier Virgin Blue, and said that Virgin Blue was considering acquiring small “quick-change” aircraft that could be used for day-time passenger and night-time express freight flights. Virgin Blue CEO Brett Godfrey had earlier disclosed that the airline was looking into its freight activities as well as at developing long-haul flights between Australia and the US West Coast.
Toll currently uses the Qantas-Australia Post venture Australian Air Express (AAE) to fly its domestic express freight but could move these volumes “in-house” if Virgin Blue launched its own freighter services in competition to AAE.
Qantas announced in August that it was forming a wholly owned subsidiary domestic air freight business, Express Freighters Australia (EFA), to commence operations from October 2006 and gradually build up a fleet of converted B737 freighters. This subsidiary would wet lease B737-300 freighters to AAE under a 12-year contract. AaE currently operates five B727-200 freighters, two BAe146-300s and one BAe146-100.
Meanwhile, Toll said that six bidders have been invited to tender for the 50% stake in Australian freight railway Pacific National that it must sell following its successful A$6 billion acquisition of port logistics company Patrick Corporation earlier this year.
