ITOCHU Acquires Equity in Hangzhou New Huahai Business & Trading Co., Ltd.
January 28, 2010
ITOCHU (China) Holding Co., Ltd., (“ITOCHU China”), a 100% subsidiary of ITOCHU Corporation (“ITOCHU”), has acquired an 85% equity stake in Hangzhou New Huahai Business & Trading Co., Ltd., (hereinafter, New Huahai) the largest regional wholesaler of daily goods in Zhejiang Province, China. New Huahai has consequently become a consolidated subsidiary of ITOCHU China.
The company commenced full commercial operations in January this year, and will be strengthening its presence in China’s daily goods market.
New Huahai is the leading provider of daily goods in Zhejiang Province, and is especially strong in the handling of cosmetics and skin care products. With its excellent service, it has earned high marks from European and American manufacturers and from retailer. It now has approximately one thousand retail accounts, centering on the Zhejiang Province area.
ITOCHU China established Beijing ITOCHU-Huatang Comprehensive Processing Co., Ltd. (“BIC”) in 1997 and developed the integrated wholesale of food, clothing and housing, mainly focused on Japanese companies. It is currently enjoying steady growth with a total of twelve operating bases in the coastal region and inland centers, as the only integrated wholesale that operates throughout China.
With the acquisition of an 85% stake in New Huahai, ITOCHU China will benefit from an affiliation with BIC, which has strength with Japan-based companies, and New Huahai, which excels with companies from Europe and the United States. The combined annual sales forecast for the two companies in the daily goods field for fiscal 2010 is RMB 1,100 million, believed to be the largest in the Chinese daily goods market. The companies will aim to bolster sales of their common brands, and will also look for opportunities to use their individual strengths to create synergies, such as developing sales channels for the concurrent sale of brands presently being handled by only one of the companies. In addition, by incorporating the regional sales and consumer service knowhow of New Huahai into BIC, ITOCHU China expects to quickly bolster its sales foundation in the daily goods field.
The domestic consumer market in China has been growing at an average rate of 20% for cosmetics and 10% for daily goods over the past three years, and has expanded to RMB 110 billion in size. ITOCHU China will continue to strengthen its role in the Chinese consumer market as it grows, aiming to achieve sales of approximately RMB 2 billion in the daily goods field in 2012.
Company Outline of Hangzhou New Huahai Business & Trading Co., Ltd.
|Company name||Hangzhou New Huahai Business & Trading Co., Ltd.|
|Head office location||
702, 19 Kaiyuan Road Shangcheng-qu, Hangzhou,Zhejiang Province, China
|Date of establishment||September 24, 2009|
|Capital||RMB 5 million|
|Number of employees||190|
|Line of business||Wholesale of daily goods|