CJ Logistics pursues Vietnamese expansion ambition

CJ Logistics is looking for opportunities to acquire logistics firms in Southeast Asia, aiming to realise the target to become one of five largest logistics firms globally. Thus, we are still interested in Vietnam’s largest logistics firm,” CEO Park Geun-tae stated.

Park added the firm is renewing its bid to acquire the largest logistics companies in Vietnam against its compatriot rival Taekwang.

Taekwang seemed to gain the upper hand until June when it signed a memorandum of understanding to acquire convertible bonds from Vietnamese Investment Group (VIG), which was seeking to sell its stakes in Gemadept. Accordingly, Taekwang proposed US$442 million for the deal.

However, Thelnvestor.co.kr reported that the deal between Taekwang and VIG may fall through due to the two parties’ failure in reaching a compromise on the price.

While CJ Logistics awaits the completion of the purchase with VIG, it completed the purchase of numerous other logistics firms in China and Southeast Asia. Notably, in 2016, it bought a 31.4-per-cent stake in Century Logistics from Malaysia and a 50-per-cent stake in Shenzen Speedex from China for $113.4 million. In April 2017, it also acquired 51% of Dubai-based Ibrakom, which specialises in heavy transport, and Darcl Logistics, India’s biggest transport company.

CJ Logistics is the Republic of Korea’s largest total cargo delivery company, delivering over 20 million packages a day to more than 100 countries around the world.

Gemadept was founded in 1990 and now has about a dozen subsidiaries in the areas of logistics, port operations, and real estate development. It is listed on the Ho Chi Minh City Stock Exchange at a VND7.5 trillion ($329 million) valuation.

In June, Gemadept put 108.8 million shares on sale with the purchasing price of VND10,640 ($0.46) apiece. It acquired VND1.16 trillion ($50.69 million) from the deal, increasing its chartered capital to VND2.88 trillion.

Being considered Vietnam’s largest logistics firm, in 2016, Gemadept earned VND3.74 trillion ($163.4 million) in consolidated revenue, up 4 per cent on-year, 43 per cent of which came from port services business and 57 per cent from logistics.

It expects to earn VND3.8 trillion ($166.1 million) in consolidated revenue and VND530 billion ($23.2 million) in consolidated pre-tax profit for the whole year of 2017.

In recent times, Gemadept has also been divesting from its member companies.

On September 27, Gemadept issued the decision to hand over entire its 50 per cent holding, equaling 3.35 million shares, in Gemadept (Malaysia) Sdn., Bhd. to its another 100-per-cent-owned subsidiary Gemadept Shipping Holding Co., Ltd. Gemadept’s divestment from Gemadept Malaysia is part of its restructuring plan.

In early July 2017, Gemadept decided to establish two subsidiaries, namely Gemadept Shipping Holding and Gemadept Shipping. According to Bizlive’s source, CJ Logistics and Gemadept completed the negotiation on CJ Logistics’ purchase of a 51% stake in these two companies for $125 million.

Previously, on August 15, it rumoured that Gemadept completed the divestment of a 51 per cent stake, equaling entire its equity capital, from Gemadept-Hoa Sen International Port also to CJ Logistics.