Kerry Logistics seeks quality over quantity

Kerry Logistics says it plans to invest in US transpacific freight forwarders to support its integrated logistics business in Asia.

The Hong Kong-based logistics firm recently formed freight forwarding joint ventures in New Zealand and Australia, linking the Trans-Tasman market to Asia, which is its focus.

More investments are expected as it plans to invest HK$973 million, or 51 per cent of the proceeds from its Hong Kong initial public offering in December last year, in different regions, with a third each in logistics facilities on the mainland, logistics businesses in Southeast Asia, and international freight forwarding.

The United States would be a big component of the international freight forwarding investments, where its presence was still small, and it would focus on investing in freight forwarding business across the Pacific, the company's chairman, George Yeo Yong-boon, told the South China Morning Post.

"We are reaching out to the US, but to service the Asian, China trade," Yeo said. "We need the presence in the US, otherwise we may not even be qualified as a service provider."

The international business contributed 54 per cent of the company's turnover in the first half of this year, but only accounted for 20 per cent of its profit. The company said the freight forwarding business was important for supporting logistics operations, though its margins were lower.