Li & Fung defies slowdown
Li & Fung Distribution has spent S$71 million (about HK$309.36 million) on a logistics centre in Singapore which is one of the largest of its kind in Asia.
The group, showing it is not daunted by the slowing US economy, opened the centre yesterday. It has a storage capacity of 44,000 pallet positions and 10 high-speed cranes delivering more than 400 pallets per hour at 36 loading bays.
The centre will facilitate fast-moving consumer goods and pharmaceutical products.
Li & Fung Distribution is one of the three key business groups of the Fung family, along with Hong Kong-listed merchandise sourcing firm Li & Fung Ltd and retailer Convenience Retail Asia.
Li & Fung Distribution is a dominant distributor of consumer goods in Asia, with 50 distribution centres in nine countries.
Chairman and chief executive Victor Fung Kwok-king said the existing economic situation would not be a disadvantage for the distribution business.
'With the current slowdown, clients are driving for more efficiency. We enhance the efficiencies and are able to reduce the total cost of distribution for clients,' he said in Singapore.
On Monday, Li & Fung Ltd revealed a 51 per cent increase in year-on-year net profit to HK$870 million for the year to December 31 last year.
Turnover was HK$25 billion, up 53 per cent.
Li & Fung Ltd managing director William Fung Kwok-lun said in Hong Kong that the company's business to business online trading platform StudioDirect would take about three years to break even.
StudioDirect reported a loss of HK$23 million last year.
The loss helped drag down Li & Fung Ltd's operating profit margin to 3.2 per cent last year from 3.6 per cent previously.
