ITOCHU Announces Establishment of Joint Venture in China
February 23, 2016
ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Masahiro Okafuji, President & CEO; hereinafter “ITOCHU”) announced today that its Chinese subsidiary ITOCHU TEXTILE (CHINA) Co., Ltd. (headquartered in Shanghai, China; Motonari Shimizu, Chairman; hereinafter “ITS”) entered into a term sheet together with Andes Sports Products (hereinafter “Andes”), a subsidiary of leading Chinese sportswear and sporting supplies company ANTA Sports Products Limited (headquartered in Jinjiang, Fujian province, China; Ding Shizhong, President and CEO; hereinafter “Anta”), and DESCENTE Global Retail Ltd. (headquartered in Seoul, South Korea; Kim Hoon-do, President and Representative Director of the Board; hereinafter “DGR”), a Korean subsidiary of DESCENTE Ltd. (headquartered in Osaka-shi, Osaka; Masatoshi Ishimoto, President; hereinafter “Descente”) in a relation to the possible formation of a joint venture in China with these partners over commencing the expansion of the “Descente” brand business into the Chinese market.
As one of the leading branded sportswear enterprises in China, ANTA Sports Products Limited primarily designs, develops, manufactures and markets ANTA sportswear, including sports footwear, apparel and accessories. We have established extensive distribution networks with a leading presence in second and third tier cities in China under the management of regional distributors. We place great emphasis on branding by integrating sports resources and sponsorship, advertising and promotional activities and consistent store image to enhance brand and product differentiation. ANDES Sports Products Limited was incorporated by ANTA Sports Products Limited in 2016.
Descente places its primary focus on its core “Descente” brand, and one of company’s medium-term priority strategies is the expansion of its global presence. Seeking to further increase recognition for the “Descente” brand and raise its value in the global marketplace, the company established the subsidiary DGR in 2015, with the aim of increasing revenues for the Descente Group as a whole through the expansion of retail and wholesale business.
ITOCHU has highlighted the advancement of a downstream strategy in the Asian and emerging markets (including China) as one of its priority strategies for its textile business. In China, too, which has now grown into a colossal market, ITOCHU is bolstering its domestic sales activities (primarily through ITS) and its global-market-oriented sports apparel OEM (original equipment manufacturer) businesses, and is expanding its horizons in terms of business domains through the formation of alliances with good local business partners in China.
On this occasion, ITOCHU believes that the business strategies of the Anta Group were consistent with those of the Descente Group (which is exploring possibilities for the full-scale expansion of the “Descente” brand into Chinese market) and the ITOCHU Group (which aims to expand its downstream businesses in Asian and other emerging markets). This leads to the formation of a basic agreement on the establishment of a joint venture.
As one of its national policies China is seeking to promote domestic demand in the sports field, and sports-related markets are expected to show rapid growth in the future. Moving forward, through the creation of a strong partnership between the Anta Group (with its superior selling power in the Chinese sports market), the Descente Group (which continues to pursue high standards of Japanese manufacturing quality) and the ITOCHU Group (with its value chain in China covering everything from materials to brand-related business and its solid network of powerful local partner corporations), ITOCHU, in cooperation with other partners, will aim to achieve accelerated growth and expansion of operations for the “Descente” brand in the Chinese market.
Corporate profile of new joint venture company
|Main business||Import, licensed manufacture, direct retail store operation and wholesale of the Descente brand in China (excluding Hong Kong and the Macao Special Administrative Region)|
|Capital||250 million renminbi (RMB)|
|Investment ratios||Andes: 60%, DGR: 30%, ITS: 10%|
Corporate profile of Anta
|Company name||ANTA SPORTS PRODUCTS LIMITED|
|Head office||Jinjiang, Fujian province, China|
|Main business||Manufacture and sale of sportswear and sporting supplies including shoes, apparel and accessories in China.|
|Capital||242.579 million renminbi (RMB)|
|Established||February 8, 2007|
Corporate profile of DGR
|Company name||DESCENTE GLOBAL RETAIL LTD.|
|Head office||Seoul, South Korea|
|Main business||Retail and wholesale sales of the Descente brand worldwide.|
|Capital||10 billion South Korean won (KRW)|
|Investment ratios||DESCENTE LTD.: 60% DESCENTE KOREA LTD.: 40%|
|Established||January 16, 2015|