SINGAPORE (THE BUSINESS TIMES) – Taxi operator ComfortDelGro 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 next year 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 eight other cities in China, in areas including taxis, bus stations, driving schools and car rentals.
The JV comes two years after the transport operator’s car rental and leasing arm expanded into the heavy vehicle class, where it added five prime movers to its fleet.
Earlier this month, the transport giant called off plans to float its Australian unit, citing unfavourable conditions.
The group said on Nov 10 that initial public offering conditions in Australia “have become more challenging and other strategic options have presented themselves” since it announced in August that it was listing its wholly owned subsidiary, ComfortDelGro Corp Australia, on the Australian Stock Exchange.
ComfortDelGro operates in six states and territories in Australia – New South Wales, Victoria, Western Australia, Canberra, Northern Territory and Queensland – with a fleet of more than 4,400 vehicles.
It said it will continue to focus on growing the business through mergers and acquisitions, contract renewals and new contract tenders.