Saturated and competitive home market prompts expansion
NWS Holdings, the services, infrastructure and ports flagship of conglomerate New World Development (NWD), is close to its second bus joint venture in the mainland, as it seeks expansion outside the saturated and competitive Hong Kong market.
NWS was in advanced talks with the Shenyang government on a bus joint venture in which the company was hoping to take a stake of more than 50 per cent, chief executive Chan Kam-ling said.
The company would contribute equity capital and have operating rights in the venture, Mr Chan said.
He refused to divulge the cost, saying only that it would involve less than the $70 million it would invest in a $140 million joint venture in southwestern Yunnan province that was announced earlier this year.
The Yunnan deal will see the provincial government inject a 39-route bus operation involving 663 buses into the venture. Mr Chan would not comment on the project's expected rate of return.
The level of competition facing the Shenyang venture is unclear. Mr Chan said there were already two Sino-foreign bus ventures in the Liaoning provincial city, including one with investment from a Macau company.