K&N planning to hit the acquisitions trail
Kuehne & Nagel (K&N) is planning a series of acquisitions in southern Europe over the next two years to bring its contract logistics operations up to world scale.
New UK chief executive Peter Ulber said: “There are a few spots in Europe where we are not very strong yet.” He identified Spain, Portugal, Italy and France as markets in which the group would look to invest in order to match its logistics activity to the level of North America, where Usco was acquired last year, and Asia, where K&N has a strategic stake in SembCorp.
Ulber also hinted that K&N would make a UK air freight forwarding acquisition soon.
K&N currently ranks 10th in the UK in terms of Iata spend, and needs double-digit annual growth to achieve its stated aim of a top five place by 2004.
He told IFW that UK warehousing, now operating at more than 90% capacity, would be expanded by up to 25% by yearend.
K&N has 60,000sq metres of space in Reading, Birmingham, Bury and Belfast and plans to add capacity mainly in the Midlands.
The pressure on space contrasts with the US picture, where the group blamed “the substantial temporary reduction of the warehousing business due to historically low stock levels” for a belowexpected performance.
The Usco acquisition helped K&N increase its contract logistics turnover by 60% to SFr277.6m (€188.8m) in the first quarter of this year but the division recorded a pre-tax loss of SFr1.9m (€1.3m) thanks to the US glitch and goodwill amortisation.
The recession in the telecoms sector worldwide did not worry Ulber.
“It is clear that, whoever provides it, there is new technology that will have to be brought to market.
“In spite of the slowdown, our overall technology business is still improving, ” he said.
In January, K&N announced it had been appointed global lead logistics provider by Nortel Networks.
Ulber said K&N’s move towards fourth-party logistics provision – “our ultimate goal” – depended on good historical relationships as a third-party provider.
Sea freight turned in an “outstanding” first-quarter performance to increase pre-tax profits by 50% to SFr34m (€23m).
Ulber said business had increased by 25% on some lanes, and predicted the group would process 950,000teu this year, up from 850,000teu.
Air freight profits fell by 8% to SFr13.2m (€9m).
