Swire Pacific pays 174m yuan for cold stores
Swire Pacific has splashed out 173.8 million yuan (HK$213.06 million) to acquire a 60 per cent interest stake in Guangdong Swire Cold Chain Logistics from John Swire & Sons in Australia.
The remaining 40 per cent will continue to be held by Guangdong Foodstuffs Import-Export (Group).
Guangdong Swire will be incorporated in Swire Pacific's trading and industrial division, headed by executive director John Rae-Smith.
The deal could be completed by the end of this month, but Swire Pacific said it might be delayed because of the need to obtain Chinese regulatory approvals for the acquisition.
Guangdong Swire operates three cold stores in Guangzhou's Huangpu district, providing refrigerated storage for frozen seafood and meat, dairy products and other consumables, including wine and chocolate.
The acquisition is expected to lead to expansion of Swire Pacific's refrigerated logistics operation on the mainland amid growing interest in China's cold storage and refrigerated transport sector.
China Merchants Americold, a joint venture between China Merchants Holdings International (Hong Kong) and Americold, now operates nine refrigerated distribution centres in China. Two years ago, the joint venture acquired China Merchants International Cold Chain (Shenzhen) and KangXin Logistics with plans to spend US$400 million by 2015 developing a network of cold chain distribution centres.
The National Development and Reform Commission has also targeted cold chain logistics in the current five-year plan, which runs until 2015, so as to slash the huge amount of food wasted on the mainland due to poor infrastructure and transport.
More than 30 per cent of fruit and vegetables and about 13 per cent of meat spoils before the food reaches the shops.
Michael McCool, partner and general manager of consultancy AT Kearney (Hong Kong), said the commission wanted to cut the wastage for fruit, vegetables and meat by half by 2015. Billions of US dollars worth of investment was required, he said, but 'the reduction in wastage should provide the return on investment'.