Rhenus Group, a global supply chain provider, expresses confidence in China and Asia-Pacific’s growth potential after securing assets in the region to gear up for business rebound and reinforce its position in the industry’s most rapidly expanding area.Thank you for reading this post, don't forget to subscribe!
Operating in mainland China and Hong Kong through a network of 17 centers for over two decades, the family-owned German company made significant moves by acquiring BLU Logistics, a freight forwarder with operations in Latin America and Greater China, and obtaining a 51 percent stake in LBH Group, which operates in mainland China and Southeast Asia, in September.
The Asia-Pacific region continues to be the swiftest growing area for the global freight and logistics market. Despite escalated geopolitical tensions between the West and Beijing in recent years, increased investments in the world’s largest logistics market have fueled growth, bolstering confidence in the potential.
“China stands as a vital market for Rhenus,” emphasized Tobias Bartz, group president and CEO, in an interview. “Given its substantial economic influence, China represents a significant market for the German economy and a cornerstone of our trade.”
President and CEO of Rhenus, Bartz, also iterated, “China holds significant sway over the German economy and our business.” Photo: Handout
Situated in Montabaur, near Frankfurt, the 111-year-old Rennes Group generates approximately 8.6 billion euros (US$9.2 billion/HK$71.8 billion) in annual revenue. It maintains a workforce of 39,000 individuals across 1,120 sites, offering services encompassing the entire supply chain and including multimodal transportation and warehousing, as per the company’s website.
China’s logistics value is estimated to increase by 4.7 percent to 12.7 trillion yuan (US$1.74 trillion/HK$13.6 trillion) in 2022, as outlined in a Savills report from March. Based on the total value of social logistics goods, the sector experienced a compound annual growth rate of 6.6 percent from 2017 to 2022, surpassing the economy’s expansion rate of 5.2 percent, as reported by Fitch Ratings.
GLP from Singapore Raises Funds to Acquire Warehousing Facilities in China
In July, Germany revealed its “China Strategy” document, characterizing China as a “partner, competitor, and systemic rival.” The document states that Europe’s largest economy aims to reduce its dependency on China in crucial sectors to mitigate associated risks. It also suggests that the European domestic market presents significantly greater opportunities for Chinese companies in the transportation sector.
“The document assures legal certainty for our investments and clients,” stated Bartz. “The political landscape differs from the economic relationships. China continues to be a reliable player in the global economy, and we address all matters through cooperation.”
A view of the automated container terminal at Shanghai Yangshan Deep Water Port on November 3, 2023. Photo: Xinhua
Even though geopolitical tensions have led numerous Western companies to relocate their operations and production to Southeast Asian nations, China remains a leading choice in many of these areas due to its superior infrastructure, according to Colliers.
“China possesses a substantial and expanding domestic market, creating robust demand for industrial and logistics resources,” highlighted Michael Bovens, head of Asia Industrial at the real estate consultancy, pointing out government support for this sector.
Bovens emphasized that increasing consumer demand for prompt and high-quality logistics services will offset the deceleration in the wider economy, boosting prospects for industrial properties amid a multi-year downturn in the residential market.
China’s logistics value in 2022. Source: Savills Real estate segment in China The country grapples with a debt crisis, witnessing numerous private developers, from Evergrande to Country Garden Holdings, defaulting on loans. In the first nine months of this year, real estate investment dropped by 25 percent to US$24.4 billion compared to the same period in 2022, according to data compiled by MSCI Real Assets.
The freight and logistics market in Asia-Pacific, the globe’s fasting-growing region, includes a substantial contribution from the Chinese economy, according to Bartz.
“We are determined to further extend our presence and services in the region,” he affirmed. “Our robust foothold in Greater China and Hong Kong, in particular, constitutes a fundamental aspect of our long-term strategy.”