ComfortDelGro in JV to start construction logistics business in China

TRANSPORT operator ComfortDelGro C52 : C52 0% on Monday (Nov 29) said it has entered into a joint venture (JV) to start a transportation business delivering concrete in China.

ComfortDelGro will hold a 60 per cent stake in the JV company Guangxi ComfortDelGro Logistics, while the remaining 40 per cent will be held by Guangzhou Xinhongqiang Concrete Company.

Guangxi ComfortDelGro Logistics will have an initial start-up capital of 12 million yuan (S$2.5 million), and will purchase a fleet of up to 35 trucks by the end of 2022 to deliver concrete in Nanning, Guiping and Guigang in the Guangxi Zhuang Autonomous Region in southern China.

ComfortDelGro managing director and group chief executive Yang Ban Seng noted that the delivery business model is "quite similar" to its existing taxi business, and the partnership provides "an excellent opportunity" for the group to expand into the logistics business.

"The concrete industry in the province is also primed for growth given the region's development and infrastructure sectors," he said.

ComfortDelGro is currently the largest taxi operator in Nanning with a fleet of 854 taxis, and also operates in 8 other cities in China, in areas including taxis, bus stations, driving schools and car rentals.

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The JV comes 2 years after the transport operator's car rental and leasing arm expanded into the heavy vehicle class, where it added 5 prime movers to its fleet.

Shares of ComfortDelGro were trading at S$1.44 as at the midday break on Nov 29, down S$0.03 or 2 per cent.

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