Friday, June 3, 2011

Toll Group Eye Chinese Automotive Supply Chain Markets

Proposed Acquisition Would Give Them Firm Footing
Shipping News Feature

AUSTRALIA / CHINA – The Toll Group, one of the Asian region's leading provider of integrated logistics services, has announced its intention to break into the Chinese automotive supply chain market with the purchase of a 40% share in Tianjin Anda Logistics, one of that country’s largest third-party logistics service providers.

 “The Chinese automotive market is the largest in the world and offers immense opportunities for Toll to leverage our industry leading automotive capabilities,” said Toll Group Managing Director, Paul Little.

Mr. Little’s enthusiasm is well justified. In 2010 the market for new vehicles rose 32% in China, with 18.6 million vehicles sold there in comparison to 11.8 million in the U.S.

With a much lower proportion of car ownership – some 50 cars per 1000 people in China versus over 750 in the USA – and continued economic growth bringing more prosperity, as well as extensive government investment in road infrastructure, the expected future market is potentially massive.

Little continued that: “Importantly for Toll Group, manufacturers in China are increasingly demanding a more efficient and effective supply chain. Our joint venture with Tianjin Anda allows us to partner with a leading local company to provide those services in a proven and cost effective manner.”

Tianjin Anda already provides finished vehicle transport, storage and processing services for leading brands such as FAW, Toyota, BMW and Peugeot-Citroen.

Based in the city of Tianjin, a major manufacturing centre and China’s largest import terminal, it is close to Beijing and well connected to the main national highways network.

Subject to Chinese regulatory approval, Toll will initially acquire 40% of the privately owned business with the option of moving to a majority stake over the next two years and to increase that further over the next five years.