Sino-Singapore joint venture takes stake in Chinese firm
CHONGQING (The Straits Times/ANN) - A joint venture between Singapore and Chongqing companies, tasked to develop logistics connectivity in Chongqing, yesterday announced plans to take a stake in a Chinese firm set up to drive trade flows along the new Southern Transport Corridor
This comes after Lianhe Zaobao reported last week that there are currently two companies in the Chinese city that use the "Chongqing Connectivity Initiative" (CCI) as part of their names to sell logistics solutions to potential customers, causing confusion in the market.
One is Sino Singapore Chongqing Connectivity Solutions (SSCCS), a joint venture between companies from Singapore and Chongqing, under the umbrella of the CCI government-to-government project between Singapore and China.
The other, named the CCI Eurasia Land Bridge Logistics Development Company (CELD) , is backed by four local state-owned enterprises. Despite having CCI in its name, it does not have any Singapore involvement.
But all that changed yesterday when both companies signed a memorandum of understanding (MOU) which will see SSCCS own a share of CELD.
Both companies declined to reveal the investment value and the percentage of shareholding.
"Taking up a stake in their company is a good start," said SSCCS chairman Teo Siong Seng.
"This is a first step. We may eventually merge to be one. This could also be possible," he added.
Mr Gordon Tan, general manager of SSCCS, said CELD will take charge of operations along the Southern Transport Corridor.
Since last September, CELD has operated more than 130 cargo train trips along the route connecting Chongqing to Guangxi via rail, and onward to overseas destinations, including Singapore via sea.
Southbound trains have reached a frequency of one trip a day, whereas northbound freight stands at three times a week.
"We have sent goods to more than 80 seaports in 42 countries across all six continents," CELD chairman Wang Yupei said after the signing.
According to official data, 87 per cent of the southbound flow is foreign trade, whereas only about 20 per cent of the northbound flow comes from overseas.
Mr Tan said that under the MOU, SSCCS will be responsible for driving inward northbound trade flows from South-east Asia to the Qinzhou port in Guangxi, and up north to Chongqing.
SSCCS will also focus on the digitisation of the new trade route and market it globally.
"We see ourselves as marketing this corridor, ensuring that more shipping lines use it and improving the maritime connectivity," said Mr Tan.