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ProLogis, the world's largest owner of warehouse and distribution facilities, kicked off the construction of a new logistics center in Shanghai yesterday.
The new center is part of the US-based company's efforts to speed up expansion in the world's third largest trader.
The three-square-kilometer, US$300 million ProLogis Park Lingang is a 50-50 joint venture with Shanghai Lingang Economic Development (Group) Co Ltd. The first phase of the project is scheduled to be completed early next year.
The new center is part of ProLogis' plans to invest US$1.25 billion in China by 2010, which will make the country Prologis' second largest investment destination behind the United States.
"We see China as the greatest chance for future growth as it will be the largest market globally in next 10 years," said ProLogis CEO Jeffrey H. Schwartz during the company's global board directors meeting in Shanghai.
It was the first time the board has met in China. Board members also visited the company's logistics parks in Shanghai and Suzhou.
"We are confident that our experience and expertise puts us in a great position to help China set up international standard distribution facilities, increase efficiency and enhance the investment environment," said Schwartz.
Establishing its first China headquarters in Shanghai in 2003, ProLogis now owns and manages over 540,000 square meters of distribution facilities in the Yangtze and Pearl River Delta regions.
"Shanghai is a prime location for a distribution hub," said Mei Z. Ming, senior vice-president and managing director of ProLogis China, adding that the city's continued investment in infrastructure is likely to bring about the region's expanded role as a key global logistics hub.
Other than its present 8 logistics parks in six cities in the eastern coastal region, ProLogis also plans further developments in second tier cities such as Hangzhou, Wuxi and Foshan.
The US-based company is also conducting market research in inland cities such as Chongqing, Chengdu and Wuhan, as its international clients are actively expanding to China's western areas, said Ming.
ProLogis predicts that there will be a rise in demand for international standard distribution facilities in China as the scheduled opening-up of its logistic sector will encourage more international companies to enter the world's fastest-growing major economy.
China will allow foreign companies to set up wholly-foreign-owned enterprises when expanding their international and local logistics business from December 11, fulfilling its commitments to the World Trade Organization.
A slew of international logistics giants have already established their presence in China, such as the US-based UPS and FedEx, both of which have set up their China headquarters in Shanghai.
Shanghai's government has highlighted logistics as one of the four key industries to foster in its 10th five-year development plan, alongside biological pharmacy, new materials and environmental protection.
(China Daily September 22, 2005)
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