Kerry Logistics, one of the fastest growing 3PLs in the Asia-Pacific, sees Hong Kong as the Asian hub for its multinational clients

Hong Kong is rapidly developing into a regional distribution centre for multinational companies, according to two SAR-based enterprises. Its strategic location, dynamic business environment and mature logistics industry are attracting international businesses looking for more than basic transportation solutions.

As more multinationals (MNCs) continue to focus on core competencies, they want sophisticated supply chain solutions along with guaranteed speed to market their products. Such value-added services can take the form of warehousing able to handle rapid growth, through to product customisation and customs clearance.

Hong Kong has long been a gateway to and from the Chinese mainland, in particular the manufacturing powerhouse of the Pearl River Delta (PRD), and it also enjoys first-class air and sea connections across the region. These attributes make it ideal for such companies as Kerry Logistics, a Hong Kong company, recognised as one of the fastest growing Third Party Logistics Providers (3PL) in the Asia-Pacific, and Exel, a global leader in supply chain management with a customer base boasting two thirds of the world's largest, quoted non-financial companies.

"Hong Kong is a world-class international gateway for the huge production base of the PRD and is the Exel air freight hub for the Asia-Pacific region as a whole. That's why we have made such extensive investment in the logistics centre facilities at the Hong Kong International Airport," says Alaina Shum, deputy general manager of business development and marketing, Exel Hong Kong Ltd, the Hong Kong arm of UK listed Exel.

Amongst its many customers, Exel counts Motorola SPS Hong Kong for which it has been managing distribution centre operations since 1998, providing region-wide coverage. It also serves UK retailer Marks & Spencer's international buying office purchases for their Asian and Middle-Eastern franchises.

Servicing the region and beyond

With economic ties between Hong Kong and the Chinese mainland becoming increasingly strong, Ms Shum sees a bright future for Hong Kong and Exel: "The recently signed Closer Economic Partnership Arrangement (Cepa) will give the Hong Kong-based subsidiaries of multinationals significantly more access to the markets in China. And it will enhance our existing capabilities to serve as a regional base, from which to manage the growth of these MNCs."

Vincent Wong, executive director of Kerry Logistics Network Limited, agrees. "Integrated logistics is still a relatively new concept in Asia and Kerry sees a huge market development opportunity. We are promoting Hong Kong as the Asian hub for our multinational clients. Given the current low penetration rate for 3PLs in China, together with the vast market potential, growth for logistics providers will be significant."

Applying the practical experience of having been a service provider for over two decades, Kerry has successfully transformed itself into a global 3PL. It currently operates a regional distribution centre for a high-end retail fashion group in Hong Kong from its 50,000 sq ft temperature controlled premises. The operation is supported by advanced IT applications to enhance efficiency at every stage.

The Hong Kong base receives stock from France, Italy and Spain, as well as non-merchandise such as packaging, window displays and furniture. With a storage capacity of 300,000 pieces and a turnover of around 250,000 pieces per month, it can oversee all storage and inventory management. It also provides a range of value-added services including repackaging, price tagging and labelling. The Hong Kong regional distribution centre supports the whole of its client's Asian market with outgoing shipments to virtually every country between China and Australia.

Related links:
Kerry Logistics www.kerrylogistics.co.uk
Exel www.exel.com