Japanese logistics giant SG Holdings will acquire Shanghai-based peer Shanghai Runbow Logistics and Technology, according to Nikkei. The acquisition comes in an effort to explore China’s growing demand for shipping business.
SG Holdings is the parent company of Sagawa Express. Sagawa Express will acquire 70 percent interest in the company for an approximate several billion yen by March end. It will make the most of Runbow’s well integrated shipping network in China to win contracts. These contracts will mainly be from apparel and cosmetic companies.
Sagawa will leverage Runbow’s expertise in warehouse and management and other areas to boost efficiency in China. Currently, Runbow has established clients including a major US sportswear company and a top European paint maker.
According to Nikkei, it has earned $6.28 million in pretax profit on about 504 million yuan in sales last year.
In March, Sagawa Express competed with rival Yamato to further capture Japan’s delivery services market. This move anticipated to help Sagawa improve its margins by focusing on B2B services.
The Chinese logistics market has become one of the most powerful in the world. Its increasing domestic consumption levels and fast-developing e-commerce are prime reasons for the sector’s growth.
Another warehouse developer GLP launched a $2.1 billion logistics fund to boost China’s sector. The GLP China Income Partners fund is backed by a group of domestic institutional investors, while GLP will act as the fund and asset manager. Also, the new fund will invest in modern logistics assets across 20 cities.