Keppel T&T to develop cold chain logistics park in China

Park will be located in Anhui Province.

In a release, Keppel Telecommunications & Transportation Ltd (Keppel T&T) said it will lead a joint venture (JV) to develop cold chain logistics park in Anhui Province, China. The Logistics Park is scheduled for operations by end 2014.

Keppel T&T, through a wholly-owned subsidiary, has today entered into a joint venture agreement with parties including subsidiaries of a Chinese conglomerate, Anhui Zhuxin Group (Zhuxin) and the Lu'an City Jin'an District Government, to develop and operate the Keppel Wanjiang International Coldchain Logistics Park (Anhui) Co. Ltd. in Lu'an City, Anhui Province, China.

The 33-hectare site is strategically located 60km west of Hefei, the capital of Anhui Province. In addition, the logistics park is 25km west of the upcoming Hefei Xin Qiao International Airport, and is 15km north-east from the Lu'an City Centre. The site also has good connectivity to the rest of China via expressways and railroads.

The Logistics Park is thus well-placed to serve the logistical needs of the Central China region that includes Anhui, Henan, Hubei, Hunan and Jiangxi.

The JV company will be 60% held by Keppel T&T's wholly-owned subsidiary with the rest held by the Jin'an district government, and private investors including but not limited to Zhuxin's wholly-owned subsidiary, Anhui Wanjiang. The registered capital of the JV will be RMB180 million (about S$36 million), of which Keppel T&T's proportionate share will be RMB108 million (about S$22 million).

Leveraging Keppel T&T's competencies, the Lu'an project will be modelled after Keppel T&T's Sino-Singapore Jilin Food Zone International Logistics Park in the northeastern region of China. Designed to serve as a consolidated platform for trading and food distribution, the Logistics Park will offer integrated 3PL services, including warehousing, cold chain, transportation services, auxiliary support infrastructure and the sale/rental of retail shop fronts.

Mr Pang Hee Hon, CEO of Keppel T&T, said, "Keppel T&T's expansion in Anhui Province is another step in our China strategy to provide quality food logistics services in key agricultural production zones. As with our Jilin project, we aim to establish the Logistics Park in Lu'an as the region's ‘Centre of Excellence for Food Logistics Safety' by developing local skills and capabilities in the cold chain and food logistics sector."

Mr Yang Jianjun, Chairman of Anhui Zhuxin Group, said, "As the pace of agricultural production gathers momentum, the agri-food industry in Anhui is expected to enjoy robust growth. Against this backdrop, demand for niche, integrated 3PL and cold chain services will intensify. At Zhuxin, we are pleased to collaborate with Keppel T&T, an established logistics service provider backed by proven expertise and capabilities, to meet the region's significant needs for sophisticated logistics solutions." The Logistics Park will provide vital support to Anhui's food-processing industry, which grew 37% from 2010 to RMB 506 billion in 2011. In particular, the introduction of cold chain logistics capabilities will promote greater food safety management in the region, a development priority for the Lu'an Government in line with China's 12th Five-Year Plan.

Mr Pang added, "The Lu'an project has the potential advantage to harness the commercial and operational synergies for 3PL services from the land-water connectivity offered by Keppel T&T's other project in Anhui - the Wuhu Sanshan Port - located around 200 km away along the Yangtze River. We will leverage on our integrated river port strategy through the Wuhu project to facilitate the operations of the Lu'an project."