Beijing blast fails to hit intended target
THE Jardine group is pressing ahead with plans for expansion in China despite the harsh attack made by Beijing last December, says Mr Michael Lo, director of Jardine Matheson (China).
Mr Lo, who is also manager of the Guangzhou office of the group's China division, said the group's expansion in China was unaffected by the criticism and Chinese partners were still keen to discuss possible co-operation.
Even after Beijing's criticism, he said Jardines had managed to sign letters of intent for projects in China, but he refused to divulge details.
Beijing's attack, which instantly caused sharp falls in share prices of group companies, has sparked further worries over the future of the Jardine group in Hongkong and particularly China.
As the Sino-British political row seems to have eased in recent weeks, worries over Jardines have also eased and the share prices have bounced back.
Speaking after a China-related seminar organised by the Federation of Hongkong Industries yesterday, Mr Lo said the Jardine group was studying many projects in China, with businesses varying from fast food restaurants to chain stores.
He said the group had started last year to pursue opportunities in a bid to spread its service sector business from Hongkong to China, following China's relaxation of controls on foreign participation in the service industry.
But he added that Jardines had an established working relationship in China, mainly in trading and transport, and that it could take advantage of this experience and established relationships to develop businesses further.
Mr Lo said the group was also seeking opportunities to expand its financial services business from Hongkong to China, but he expected the pace of development in this division to be slower due to China's strict controls on monetary and financial business.
As part of its expansion, he said Jardine Pacific had secured the licence to operate Pizza Hut outlets in Shenzhen, which would be a joint venture with a Shenzhen trading firm.
He said it planned to set up three to five Pizza Hut outlets in Shenzhen, with the first one to open in about three months' time.
The company was also negotiating for similar ventures to operate Pizza Huts in Guangzhou, and it intended to open five to seven outlets in the longer term.
He said the focus would be first on setting up a Pizza Hut chain in southern China, adding that the biggest hurdle for such ventures was to identify suitable locations.
Jardines, through Dairy Farm International Holdings, was also planning to introduce Wellcome supermarket stores in southern China, Mr Lo said.
He said negotiations were under way for possible joint ventures to open Wellcome stores in Shenzhen and Guangzhou.
Last October, Dairy Farm concluded a joint venture to open five 7-Eleven stores in Shenzhen.
The venture plans to open another 10 stores with an investment of about $30 million.
Dairy Farm's wholly-owned Hongkong Convenience Stores, the 7-Eleven licence holder in Hongkong, holds a 70 per cent stake in the joint venture.
Mr Lo said Jardine Matheson (China), which is responsible for the liaison of group businesses in China, planned to open one more mainland office this year. It now has offices in Guangzhou, Shanghai and Beijing.