Kerry Logistics Enjoys Soaring Profits, Disappoints Shareholders

Despite global macroeconomic volatilities, Kerry Logistics delivered sustainable growth in 2015, accelerating its expansion and strengthening its market position. This was achieved by both organic growth and acquisitions, demonstrating the strength of the Group’s strategic concentration on China and Southeast Asia and its long-term investment philosophy. 

Growing empire of logistics facilities
As of 31 December, the Kerry Group managed a logistics facility portfolio of 4.05 million square meters, of which 2.16 million sqm were self-owned. In Mainland China, the 53,280 sqm logistics facility at Chengdu commenced operation in the second half of 2015 2H. Two facilities in Xi’an and Wuxi are to be completed in the first half of 2016 and the second half of 2017 respectively, contributing 43,200 square meters of warehouse space. In Shanghai, construction is underway at the 99,000 square meters logistics facility, and upon completion it will be the Group’s largest facility in Mainland China.
Abroad, the Group focuses increasingly on penetrating the ASEAN region, by concentrating its investments in the Greater Mekong Region but also in Cambodia, Thailand, Myanmar and Laos.  

Spreading intra-Asian trucking network
Trucking and door-door delivery services have also developed rapidly not only in Hong Kong and Mainland China, but also farther south in Singapore, Thailand, Vietnam and Malaysia, linking important market places. Under the brand of KART, three new scheduled weekly shuttles were added to provide long-haul trucking and door-to-door services in these countries. According to Kerry’s release, KART is increasingly becoming an alternative to traditional air and ocean freight transports.  
While presenting the 2015 figures, George Yeo, the Group’s Chairman stated, “Kerry Logistics is becoming the major logistics provider for the Silk Road of the 21st Century. As Asia’s leading 3PL specialist, we are rapidly building a range of capabilities in Southeast Asia, taking advantage of ASEAN’s economic integration.”


Balancing act between cost cutting and expansion
Looking ahead, the manager said that his enterprise intends continuing its activities in China and Southeast Asia, but will also expand its presence especially in India, the Middle East, and Central Asia including to Russia. In the years ahead, the biggest growth in global logistics is intra-Asian and between Asia and the rest of the world, predicts Yeo. “Kerry Logistics is well-positioned to tap into the potentials of this growth. In difficult times, management attention is naturally focused on cutting cost and improving productivity,” he said, targeting the shareholders to explain the rather meagre dividend. “The strengths of Kerry Logistics are more obvious during challenging times. We have every intention to ride the waves and streak ahead,” pronounced George Yeo. 
Hong Kong stock exchange-listed Kerry Logistics has more than 550 office locations in 40 different countries and regions.

Heiner Siegmund