Panalpina, the Basle-based international freight forwarder, is seeking to boost the number of its strategic partnerships with manufacturers in Southeast Asia to offset the effect of the region's economic downturn. But it said it had no intention of seeking mainland joint ventures to get a class-A licence that would allow it to offer a comprehensive freight-forwarding service by land, sea and air. Chairman Gerhard Fischer said the firm had several alliances with manufacturers 'but there is scope for more'. These deals offer lucrative long-term contracts which encompass the entire logistical chain, from supply of raw materials to parts delivery and distribution of finished products. These agreements last year helped increase gross revenues by 28.1 per cent to 5.43 billion Swiss francs (about HK$28.4 billion) and push gross profit up 21.2 per cent to 896 million francs. Panalpina has agreements with Ericsson, the Swedish telecommunications giant, for forwarding systems to the mainland and the Commonwealth of Independent States; with Scandinavian engineering giant ABB for intercontinental transport and logistics services; General Motors and its parts subsidiary Delphi Automotive Services; and Volkswagen. It is keen to form further alliances, especially in the vehicle and oil and gas sectors, to bolster its regional fortunes. About 24 per cent of its business comes from Asia, but it has seen drastic changes following the regional economic crisis which Mr Fischer forecast would continue for another two years. 'The capacity offered by carriers has diminished. As there have been fewer imports, there has been an automatic reduction in flights and container vessels,' he said. 'There was no cargo moving east, but there was a lot of cargo moving west. That boom from east to west is slowing down because Far Eastern countries like Thailand have no capital to buy raw materials or machines.' China was one market that had bucked this downward trend, and Panalpina recently opened branches in Nanjing and Ningbo, to relieve pressure on its Shanghai operation. 'We have seen fantastic growth rates in China. Business is booming,' he said. The firm is cautious about the future, however, and refuses to consider any mainland partnership to help it obtain a class-A licence. 'There is only one foreign class-A licence,' said Panalpina's president Bruno Sidler. 'We will wait. We want to run the company the way we want to run it, not by someone else that has the majority.' He believed opening up of the market to foreign ownership would come within two years, as the mainland agreed to liberalise trade as part of its bid to join the World Trade Organisation.