CJ Logistics buys Vietnamese firmCJ Logistics, the logistics arm of retail giant CJ Group, acquired over a 50 percent stake in the shipping and logistics subsidiaries of Gemadept, Vietnam’s biggest logistics company, CJ announced on Monday.
The deal is expected to help the No. 1 logistics player in Korea expand its foray further across Southeast Asia, linking Vietnam with Cambodia and Laos with the goal of becoming one of the world’s top five logistics operators by 2020.
CJ Logistics, formerly known as CJ Korea Express, founded a special-purpose company to acquire 50.9 percent of both Gemadept Logistics Holding and Gemadept Shipping Holding, which are owned by their mother company Gemadept, for around 100 billion won ($87.3 million). CJ will be paying 70 percent of the cost, while financial investors will pay the rest.
Gemadept was founded in 1990 as a state-owned company and was later privatized and listed. It operates a dozen logistics subsidiaries both home and abroad, logistics centers, port operations, forestry and real estate entities. The company is one of the first three Vietnamese state-owned enterprises to be privatized.
The Vietnamese behemoth has posted over 14 percent in average annualized growth in revenue in the past five years and registered 100 billion won revenue last year.
Vietnam has recently become one of the most favored investment destinations among Korean companies, due to its robust economic growth — over 4 percent annually since 2014 — and young workforce. Over 60 percent of its population is aged 30 or younger.
The Monday announcement comes half a year after CJ made two major acquisitions in India and Dubai. CJ acquired a 50 percent stake in Darcl Logistics, India’s largest transport firm, and a 51 percent stake in Dubai-based Ibrakom.
Last September, the Korean firm purchased a 31.5 percent stake in Century Logistics, Malaysia’s No. 2 logistics player, for 47.6 billion won.
“We will provide an upgraded comprehensive logistics service in the global arena by integrating our capability in technology, engineering and system and solution with Gemadept’s network and infrastructure capacity,” said Park Geun-tae, CEO of CJ Logistics.
“By building a third CJ Logistics in Vietnam after Korea and China, we aim to solidify our No. 1 standing in Asia and will beef up efforts to become one of the top five global logistics companies by 2020.”
BY SEO JI-EUN [firstname.lastname@example.org]