Nippon Express and Mitsubishi Form Domestic Logistics Alliance in China

Nippon Express Co., Ltd. (headquartered in Minato-ku, Tokyo; Masahiko Okabe, President), and Mitsubishi Corporation (headquartered in Chiyoda-ku, Tokyo; Yorihiko Kojima, President) recently agreed to a capital/business alliance for domestic logistics operations in China in order to expand their transport networks and further improve the quality of the services they offer in China, which is seeing a rapid expansion in logistics demand.

By June of this year the two companies will jointly establish in Japan a holding company (company name to be determined; capital: approximately 1.2 billion yen; capitalization ratios: Nippon Express 51%, Mitsubishi 49%) that will capitalize and manage six of the logistics subsidiaries(*1) that the two companies have set up in China. Shared use of the partners' warehouses, distribution points, and trucking networks is expected to nearly double the domestic logistics business of these six companies over the next five years and help them expand into international logistics. Nippon Express and Mitsubishi together operate 106 business locations in 34 cities throughout China and logistics networks with approximately 250,000m2 of warehouse space.

Nippon Express has long been engaged in setting up warehouses and domestic distribution points in China's major coastal cities, particularly for international transport services. Boasting the most expansive business operations of any Japanese logistics company in China, Nippon Express brings to the table the sophisticated know-how and highly trained personnel of a company specializing in logistics.

Based in Shanghai, Mitsubishi's transport network covers almost every region of China, from Harbin in the north to Guangzhou in the south and from Shanghai in the east to Changdu and Kunming in the west. Mitsubishi's strengths lie in its ability to respond to a full range of customer needs and to navigate through complex licensing systems as a general trading company.

There is thus little overlapping of the companies' existing networks. By combining their strong points to complement each other's efforts, the two companies seek to effectively and efficiently achieve overall expansion of their logistic business operations in and throughout China.

*1

The six subsidiaries that the holding company will capitalize and manage are: Nippon Express Global Logistics (Shanghai) Co., Ltd., Nippon Express (Suzhou) Co., Ltd., Nippon Express (Shenzhen) Co., Ltd., Nippon Express (Zhuhai) Co., Ltd. (all warehouse companies capitalized by Nippon Express), Shanghai Puling Transportation & Warehouse Co., Ltd. (truck transport company capitalized by Mitsubishi), and Beijing Global Express Co., Ltd. (warehousing company capitalized by Mitsubishi).