Wal-Mart Stores Inc., the world's biggest retailer, agreed to buy 35 percent of Chinese supercenter operator Trust-Mart to challenge Carrefour SA in the world's fastest-growing major economy.

The investment may lead to Wal-Mart taking ownership control of the operator of 101 hypermarkets in China, the Bentonville, Arkansas-based company said in a statement today. Wal-Mart didn't release financial details.

Buying Trust-Mart would more than double Wal-Mart's stores in China and allow it to win customers from Paris-based Carrefour, which has more than 1,000 supermarkets in the country. China's retail sales grew 14 percent last year to $770 billion last year.

"This is like a toehold to grow the operations,'' said David Abella, an analyst at Rochdale Investment Management in New York, with $2.2 billion in assets including Wal-Mart shares. "They're not going full-force yet.''

Wal-Mart shares fell $1.78, or 3.6 percent, to $48.20 at 4:03 p.m. in New York Stock Exchange composite trading. Before today, they gained 8.2 percent this year.

Trust-Mart, a closely held chain of grocery and appliance stores with more than 31,000 employees, will continue to operate under its own brand, Wal-Mart said. Wal-Mart is buying the stake in Trust-Mart by purchasing shares in owner Bounteous Co., registered in the British Virgin Islands.

10-Year Expansion

Founded in 1997, Trust-Mart has expanded to more than 20 provinces in China, according to the company's Web site. It sells about 20,000 items, including groceries, home appliances and clothing, in stores with total space in excess of 400,000 square meters.

Wal-Mart, which entered China in 1996, operates 73 stores in 36 cities in China.

"This is an important step in bringing additional scale to our China retail business,'' Wal-Mart Vice Chairman Michael Duke said in today's statement.

He Delai, assistant president of Trust-Mart, declined to give financial or other details when contacted by telephone. Credit Suisse Group said in a statement it advised Wal-Mart on the purchase.

Foreign Hurdles

Wal-Mart's overseas ambitions were thwarted last year by its withdrawal from Germany and South Korea, and after Japan's Aeon Co. won exclusive rights to acquire the supermarket company Daiei Inc. last October.

China's economy expanded 10.7 percent in 2006, the fastest pace since 1995, helping increase incomes by 12.1 percent among urban people and 10.2 percent in rural areas.

Carrefour, the world's second-largest retailer, said Oct. 30 it plans to open 20 hypermarkets a year in China in several years. The French company has 90 superstores and more than 1,000 supermarkets in the world's most populous country, according to its Web site.

Deregulating Market

China deregulated its retail market in December 2004 to meet World Trade Organization pledges, allowing overseas retailers to operate in the country without local partners. To meet fiercer foreign competition, Chinese companies have stepped up consolidation, with Shanghai Bailian Group Co. combining four Shanghai companies to become the country's biggest retailer with 6,000 stores.

Wal-Mart last October appointed Ed Chan as head of its retail business in China, replacing Joe Hatfield this month. Chan joined the company from Hong Kong-based retailer Dairy Farm Group, where he was regional director of North Asia.

The U.S. retailer said last year that two-thirds of its stores in China have set up trade-union branches. The company, with 33,000 employees there, is cooperating with the All-China Federation of Trade Unions.

In August, Wal-Mart introduced a credit card with Bank of Communications Ltd. in China.

China's consumer industry has potential for more expansion as per-capita spending is only $1.60 per day, compared with $27 for the average American consumer, Goldman Sachs Group Inc. said in a Feb. 12 report. The government is encouraging domestic spending to reduce the economy's reliance on exports and fixed- asset investment.

China's retail sales surged 15 percent from a year earlier to 220 billion yuan ($28.2 billion) during the nation's week- long Lunar New Year holiday, spurred by rising incomes, the Ministry of Commerce said in a statement on its Web site yesterday.

Parkson Retail Group Ltd., a retail chain in China owned by Malaysia's Lion Group, posted profit growth of 73 percent in the fourth quarter.


Sources: Bloomberg

The largest consumer electronics retailer in the U.S. said on Wednesday that it would add 20 to 23 new China stores in the Five Star chain during the next fiscal year, which begins March 4. It also said it would add two or three Best Buy stores in China during the next year and a half. It opened the first Best Buy store in China in December.

Best Buy has said its Chinese operations are a way to learn about selling electronics there, and that it will be cautious about adding stores there. In the meantime, its purchase of Jiangsu Five Star Appliance Co. in June 2006 gave it an immediate presence in China's saturated retail market for appliances and electronics.

"We will continue to learn how to serve the Chinese consumer and adapt our operating model going forward," said Bob Willett, who runs Best Buy's international operations, in a prepared statement.

In the U.S., Best Buy said it would add 90 new stores, most of them in cities where it already has a presence. The new stores will bring the U.S. Best Buy total to 900.

The company also said it would add up to five new Pacific Sales Kitchen and Bath Centers in southern California, which would bring that chain to a total of 19 stores.

Best Buy said it would add 12 to 14 Canadian stores split between its Future Shop and Best Buy brands.

Best Buy said its worldwide square footage would grow about 10 percent to 46 million square feet (4.27 million sq. meters) during the coming year.

Sources: The Associated Press

Haas Automation Asia is pleased to announce the official opening of its brand-new, 6714m2 China Headquarters and showroom in Shanghai. The move comes just three years after the company first opened its Asian operations in the city's Free Trade Zone. In that time, Haas' business in China has increased dramatically, and the company has out-grown its original location.

As well as providing vital additional office space, the new building incorporates a 625-square-meter showroom, allowing some 20 Haas machines from the company's extensive and growing range of affordable CNC machine tools to be exhibited and demonstrated simultaneously.

Also part of the facility is a 3000m2 warehouse for maintaining a stock of 200 new machines, allowing delivery to almost anywhere in China within five days of receiving an order.

According to Haas Asia managing director Fischer Mou, the relocation marks an important milestone for the company.

"Since establishing Haas Asia, we've exceeded our annual sales targets in all of the key China markets. In the past year alone, we've experienced a sales increase of more than 30%."

This is in line with the growth Haas has enjoyed in other markets around the world, and reflects the universal appeal of low-cost, high-quality CNC machines.' The new headquarters includes a massive (560m2) and comprehensive spare parts warehouse run by factory-certified support personnel, which will provide same-day dispatch for more than 90% of requisitions, and dispatch 100% of requisitions within 24h.

The new facility also includes a modern, fully equipped training area, with three classrooms and a 144-square-meter Technical Education Center, where Haas personnel will instruct HFO service engineers and customers from all over the China.

Five Haas Factory Outlets currently are in operation in China, with locations in Shanghai, Guangzhou, Shenyang, Qingdao and Chongqing.

An additional seven HFOs are scheduled to open throughout the country by year's end, further expanding Haas Automation's already substantial customer-support network in China.

"As both our Chinese customer base and our distributor network increase, we intend to offer the best service and support in the industry," added Mou.

"Our investment in the new office, showroom and parts warehouse will help ensure that we do just that."
 
Sources: Manufacturingtalk.com

FedEx will now directly employ more than 6,000 people in China.

“China continues to be one of the fastest-growing markets in the express industry and a key to FedEx international growth and profitability,” FedEx Express International President Michael Ducker said in a statement.

FedEx told Forbes.com last year that it was planning to extend its service to over 100 cities in China in the next few years.

Four Western logistic giants hold 80% of China’s express mail market: the U.S.-based FedEx and UPS, Germany's DHL and Dutch firm TNT, according to a research report jointly compiled by the National Development and Reform Commission and the Ministry of Commerce.

According to the 2-month-old report, nearly 98% of the four foreign giants’ clients in China are joint ventures or foreign companies. Domestic logistics firms have been unable to reach this high-value sector of the market.

To survive the foreign competition, state-owned logistics companies like China Post, COSCO Logistics and Sinotrans Development have been active in mergers and acquisitions since 2000.

According to the Center for Forecasting Science of the China Academy of Sciences, China’s logistic industry did 6 trillion yuan ($770 billion) worth of business in 2006, 24% higher than the previous year.

Sources: Forbes

Pizza chain franchise Papa John's has reached a milestone in China where it has opened its 50th restaurant, which is located in Shanghai. The company has revealed plans to open a further 250 units in China over the next four years, adding to its 3,000-strong international network in 29 countries.
  
Sources: Franchise International