BIZCHINA / Center
Joint agreements the best choice for multinationals
(chinadaily.com.cn)
Updated: 2007-05-08 16:55
After China entered the World Trade Organization (WTO), more top 500
enterprises are seeking expansion in China through cooperation.
Mcdonald's Corp together with China Petroleum & Chemical Corporation
(Sinopec), one of China's three largest oil and gas firms, opened the
first of two dozen drive-through restaurants in January this year,
Beijing Youth Daily reported.
The restaurant is located at Sinopec's Shahe East gas station in
Beijing's Changping District. It is 1,710 square meters and has dual
access routes for cars. The routes are located off Badaling Highway.
The drive-through on Beijing's northwestern outskirts is McDonald's 16th
in China, but its first venture with Sinopec. It is also the first to
open next to a Sinopec gas station, the result of a cooperation contract
signed in June last year between the two mega companies, both among the
top 500 enterprises in the world.
"The potential is enormous," said Jeffrey Schwartz, chief executive
officer of McDonald's China. He said the alliance with Sinopec, which has
some 30,000 petrol stations around China and adds around another 500
every year, could become a "powerful platform" for McDonald��s to build
its business.
Another top 500 company, Mitsui & Co Ltd, which set up an office in
Beijing in 1980, signed an agreement with Baosteel Group, China's largest
steel maker. The two sides established Shanghai Bao-Mit Steel
Distrubution Co Ltd in 2002 with a total investment of US$12.25 million.
Baosteel holds a 65 percent stake in the joint venture and Mitsui holds
the remainder.
The joint venture concentrates on the processing, sales, distribution and
storage of high-grade cold-rolled sheets, silicon steel and
surface-treated sheets, and mainly targets automotive plants and
household electric appliance manufacturers.
As a prominent world steel distributor, Mitsui has advantages in global
purchasing and sales network, while Baosteel has a strong domestic steel
sales network.
In the retail sector, Bertelsmann Direct Group and Carrefour signed an
exclusive agreement last year. In the contract, Carrefour will not allow
other book retailers to set up stalls in its supermarkets, while
Bertelsmann won't enter other supermarkets. By the end of this year,
China will have more than 30 Bertelsmann bookshops in Carrefour
supermarkets in Beijing, Tianjin, Shanghai, Shenzhen, Xiamen, Guangzhou,
Shenyang, Chengdu and Chongqing.
Carrefour said the better brand image of Bertelsmann will attract more
high-end consumers for Carrefour. The two sides are also in negotiation
to cooperate on other aspects of the business including book promotions
and marketing activities.
Another win-win cooperation is between Metro Group, one of the world's
largest trading companies, and China National Foreign Trade
Transportation (Group) Corp, a leading logistics service provider in
China.
Sinotrans has won a strategic cooperation deal with Metro Jinjiang Cash &
Carry, a subsidiary of the retail giant Metro Group. Under the deal,
Sinotrans will become Metro Jinjiang's sole dry-food and non-food
logistics operator in China. This will mean Sinotrans will deliver goods
from some 1,000 suppliers to Metro's 33 retail outlets across China.
The Sinotrans contract win has ended a month-long bidding race between
multinational and local logistics providers to become the company's
dry-food and non-food deliverer in China. The contract term is for an
indefinite period. Metro Group Logistics has developed a tailor-made
logistics program for retail operators called Procurement Logistics. It
has already proved successful in Germany, Poland, the Netherlands,
Turkey, Russia and Spain, and will now be introduced to China and
operated by Sinotrans.
(For more biz stories, please visit Industry Updates)
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