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Christine Chan

Shanghai Industrial Holdings (SIH) is considering linking with Sun Hung Kai Properties (SHKP) and China Eastern Airlines to establish a logistics centre in Shanghai.

 SIH chairman Cai Laixing said the centre would meet rapidly rising demand for value-added goods and the efficient movement and storage of such goods.

  Mr Cai said the centre would also provide much-needed services in the Shanghai area.

 'A logistics centre holds vast potential given the prospect for transport in the region,' he said.

 Estimates show Shanghai handles about 30 per cent of the mainland's cargo.

 The city's position as the mainland's premier international trans-shipment hub will be bolstered with the establishment of several transport-related infrastructure projects.

 Among these projects are Shanghai Pudong International Airport, a deep-water harbour and Waigaoqiao container terminal in Pudong.

 'Details of the plan will be announced when appropriate,' Mr Cai said.

 The centre would reportedly need an investment of about $2.5 billion.

 Chief executive Zhuo Fumin said that establishing a logistics centre would provide opportunities for SIH, because there were no foreign-ownership restrictions on such operations on the mainland.

 Company officials said the firm filled a niche, adding they had backing from the municipal government.

 SIH is the SAR-listed arm of the Shanghai municipal government.

 SHKP runs the Air Freight Forwarding Centre at Hong Kong International Airport.

 Mr Cai said the long-awaited deal to take a 10 per cent stake in Shanghai's Waigaoqiao terminal, phase I, was expected to be completed by the end of the year. The second and third phases are expected to be concluded next year.

 Shanghai port authorities would take a 40 per cent stake in the terminal, followed by Hutchison Whampoa taking 30 per cent and SAR-listed Cosco Pacific taking 20 per cent.

 Waigaoqiao handled 22 per cent of Shanghai's cargo throughput last year.

 Company officials see huge potential for Waigaoqiao, helped by global demand for container-based trade and its still low levels of use in the mainland.

  Last year, about 30 per cent of the mainland's trade was container-based, compared with a global figure of about 45 per cent.



SIH sees benefits for Shanghai from logistics-centre alliance