FedEx Express likely to set up wholly-owned subsidiary in China
FedEx Express, branch of FedEx Corp. (NYSE:FDX) and global express giant, is likely to terminate cooperation with partner Tianjin DTW Group Co., Ltd. in a move to set up its wholly-owned subsidiary in China. An insider close to FedEx Express and DTW Group disclosed that both sides were expected to reach an agreement in the near future. FedEx Express is said to have two schemes to part from DTW Group. FedEx Express will probably pay CNY 100 million for another 50% stake in their joint venture named Federal Express- DTW Co., Ltd., which was formed in Beijing in 1999, or it will spend CNY 240 million to CNY 320 million on the other 50% stake in Federal Express-DTW and the express unit of DTW Group. For the moment, FedEx Express favors the first scheme, while DTW Group preferred the second one, the insider added, both sides now focus on acquisition price and employers of the venture. FedEx Express only wants to buy the other 50% stake to wholly own the venture, which has complete network in Mainland China. Referring to the rumor that FedEx Express would like to end partnership with DTW Group, spokesperson for FedEx Express gave no comment just saying that the US express operator would insist on its fixed strategy in the Chinese market. Dai Dingyi, vice Chairman of the Chinese Federation of Logistics and Purchasing, believed that FedEx Express teamed up with DTW Group aiming to make inroads into the Chinese market at a low cost firstly and then establish wholly-owned subsidiary at a ripe time. As a matter of fact, DTW Group just obtains certain profits from the venture but does not control it. FedEx Express is responsible for all operations. In the past years, FedEx Express has rapidly expanded branches and networks all through the country. From 2000 to now, its network has involved more than 200 cities in domestic China. In addition, FedEx Express signed an agreement with Guangdong Provincial Airport Administration Group on July 13, 2005 to start operation of its all-new Asian Pacific transfer hub in Guangzhou Baiyun International Airport, Guangdong, Southern China, in October 2008. Frederick W. Smith, chairman of FedEx Corp., excitedly said that Guangzhou had most advanced hardware equipment, which could satisfy its future expansion in Mainland China. Guangzhou is also a gateway to the Pearl River Delta, the manufacturing engine and a major economic center of Mainland China. The transfer hub is viewed as another move for FedEx Express to build wholly-owned subsidiary in China. FedEx Express connects areas that generate 90% of the world’s gross domestic product in one to three business days with door-to-door, customs-cleared service and a money-back guarantee. The company’s unmatched air route authorities and infrastructure make it the world’s largest express transportation company, providing fast, reliable and time- definite transportation of approximately 3.2 million packages to more than 220 countries and territories each working day. FedEx Express employs more than 137,000 employees and has approximately 50,000 drop-off locations, 663 aircraft and more than 41,000 motorized vehicles in its integrated global network. FedEx is one of the world’s largest express transportation companies and provides fast and reliable delivery services to 215 countries. (USD 1 = CNY 8.0998)
From www.cb.com.cn, Page 1, Thursday, September 01, 2005 [email protected]
