2006

Marubeni to Establish a Distribution Company in South China

Apr. 27. 2006
Marubeni Corporation

We are delighted to announce that Marubeni Corporation and Isewan Terminal Service Co., Ltd. will jointly establish a distribution company, which will be funded exclusively by non-Chinese capital, in Guangzhou City, Guangdong, China in June 2006.

When it joined the World Trade Organization (WTO) in December 2001, China announced that it was committed to opening its markets to 100% foreign companies engaged in road transportation within three years, and to 100% foreign companies engaged in the international forwarding industry within four years. China has been issuing and amending regulations related to its commitment, including Management Regulations for Foreign Investment in Road Transport Services and Measures for the Administration of Foreign International Cargo Agencies. According to these laws and regulations, it became possible for a company that is 100% foreign owned to be authorized to engage in road transportation in China from December 2004 and in international forwarding from December 2005.

The principal business activity of the new company includes international forwarding, distribution center operations and road transportation. The distribution center initially started operating in leased warehouse facilities located five kilometers south of Nansha Area A. The new company plans to operate warehouses in the future that it owns itself, and expects to expand its function and business activities.

Since 1999, a succession of Japanese automobile manufacturers have launched their businesses in the South China district, which has developed as a production base for electronic devices. The automobile industry in the district is expected to continue to expand in the future. Marubeni and Isewan will establish their business bases in Guangzhou City. The main targets are the distribution of auto components suppliers that have established businesses in China as well as the distribution of raw materials and products for established suppliers. Using the new company as a basis, Marubeni and Isewan will also establish a systematic international distribution network in conjunction with other international distribution networks, and offer domestic road transportation services in China.

Marubeni has already been operating another distribution company, Shanghai Waihong International Logistics Co., Ltd., which was established in 1993, together with Isewan. Marubeni has established alliances with its distribution joint venture in Dalian, Tianjin, and Yingkou in North China, and with its locally incorporated company in Hong Kong. By jointly establishing business bases in Guangzhou, South China, Marubeni and Isewan will develop distribution networks covering the entire Chinese coastal area. The significance of this region is changing from being the world’s factory to becoming a huge market.

Overview of the New Company

  • Name : Guangzhou Yishihong International Logistics Co., Ltd.
  • Address : Room 1409, Tower A, Center Plaza, 161 Lin He Xi Road,
                   Tianhe District, Guangzhou, Guangdong, China
  • Capitalization  :   USD1,500,000
  • Ownership : Marubeni Corporation    50%
                       Isewan Terminal Service Co., Ltd.   50%
  • Established :  June 2006 (Expected)
  • Employees  :  Approximately 20 (initially)
  • Core business : Warehousing, distribution processing, forwarding and
                           Chinese  domestic transportation
  • Distribution center : 4000m2 (single-story building)

(Address: 582 Jingang Road, Nansha ETDZ, Guangzhou City, China)

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