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Hong Kong-based multimedia company Tom Group is seeking to ink a deal with one or two of the branches of Xinhua Bookstore, the State-owned book distribution network, in this year or early next year, said a top company executive on Friday.
The company aims to own a regional logistics and distribution center via a partnership and develop a distribution network in the Chinese mainland, said Sing Wang, chief executive officer of the Hong Kong stock exchange-listed company.
Wang said during a conference call that his company has been talking with Xinhua bookstores in several provinces and municipalities and he hoped that Tom Group could partner with one or two of them.
"Considering the progress of the talks and China's commitment to opening the distribution market starting this December, we hope we will see some results at the end of this year or early next year," said Wang.
As China promised to open its book and magazine distribution market three years after its accession to the World Trade Organization in December 2001, the country has been speeding up the reform of the distribution system and strengthening the competitiveness of domestic distributors with the introduction of investors.
Xinhua bookstores in provinces of Sichuan, Zhejiang, Liaoning, Guangdong, Jiangsu, Fujian, and Shanghai Municipality have finished or are restructuring from State-owned enterprises to State-controlled shareholding companies.
Industrial sources said Tom Group is currently bidding for partnership with Sichuan Xinhua Bookstore.
Wang said his company could spend between 300 million yuan (US$36 million) to 800 million yuan (US$97 million), depending on the size and quality of the Xinhua Bookstores.
This would be another breakthrough for Tom Group in the press and publication market in the Chinese mainland. The company has been aspiring to become a media empire in the Chinese mainland, Hong Kong SAR and Taiwan Province.
Last month, it inked a joint venture with the China Popular Computer Week Management Company Limited in Chongqing Municipality.
Tom Group's publication business, which accounted for 37 percent of its total in the first six months and was mainly focused in Taiwan, has been trying to create a distribution platform to develop its publication business in the Chinese mainland.
He said his company has decided to move all operations of China Entertainment TV (CETV), acquired from Warner Brothers last year, from Hong Kong to Shenzhen to save costs and shorten the distance with the audience in the Chinese mainland.
Wang said that as CETV develops the capability to broadcast six channels with a digital network, Tom Group will think about adding more content to the broadcasting network or transmitting programmes of other TV channels in the future, if policies allow.
He said the Chinese mainland will become more and more important for his company in the future.
(China Daily August 14, 2004)
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