March 6, 2007
Kanematsu Corporation is pleased to announce today that it has reached an agreement to sell a 55% share in Kanematsu Textile Corporation (KTC), its wholly owned subsidiary, to the investment arm of Li&Fung (1937) Limited, a Hong Kong based privately held Group owned by Dr Victor Fung and Dr William Fung. Li&Fung (1937) Limited is also the controlling shareholder of Hong Kong listed Li & Fung Ltd, one of the leading consumer goods supply chain management companies in the world, Integrated Distribution Services Group Ltd, Asia’s foremost integrated-distribution services provider specializing in manufacturing, logistics and marketing and Convenience Retail Asia Ltd, the fastest-growing convenience store chain in Hong Kong and China. The combined turnover and profit of the three publicly listed companies totalled US$8,207 million and US$253 million respectively in 2005.
Kanematsu Corporation, a multinational trading and investment group was founded in 1889 with textiles as its core business. Today, its subsidiary KTC, is one of Japan’s leading textile and apparel companies serving the domestic market with a consolidated annual turnover in 2006 of over US$450 million.
“During the past year we have been discussing a strategic partnership that will bring significant advantages to our customers” commented Mr Tadashi Kurachi, Chairman of the Kanematsu Corporation. “With changes in the Japanese apparel market, we want to strengthen KTC’s ability to better support the increasingly complex and time-sensitive needs of our customers by improving product development and international sourcing capabilities” he said.
Li & Fung has a sourcing network of over seventy offices covering forty plus countries and territories across North America, Europe and Asia observed Mr Kurachi. “This extensive international resource combined with Li & Fung’s ability to manage all aspects of the supply chain will create new solutions for our customers” he said.
Mr Kurachi added that the Fung brothers had been seeking a well-positioned local Japanese operation to invest in and further participate in the world’s second largest consumer market.
To facilitate a smooth transition, the Kanematsu Corporation will provide continuity and fully support the business of KTC to ensure seamless services for all its customers. KTC will retain its name and its management will continue to be led by Mr Hiroshi Ishikawa, who will maintain his role as President and Member of the Board of Directors. Dr Victor Fung will become Chairman of the Board of Directors of KTC.
“Our goal is to maximise the business opportunities between KTC and all our group companies, and in particular, exports to the Japanese market conducted through Li & Fung Limited” commented Dr Fung. “We will work closely with the management of KTC to forge a strong partnership over time to meet the changing needs of our customers in Japan” said Dr Fung.
“Japan represents great potential and our development of this important market through KTC’s well established presence and very capable management team will be thoughtfully planned to ensure that both businesses derive the maximum benefits” concluded Dr Fung.
The new ownership structure is expected to commence in April 2007.
About Kanematsu Textile Corporation ( www.kanematsu-textile.jp )
Kanematsu Textile Corporation is a leading Japanese apparel and textile company. From material to apparel, from OEM to brand, the company’s innovative marketing approach enables it to create value and respond quickly and flexibly to meet customer requirement.
About Li & Fung (1937) Ltd
Founded as an export trading company in Canton (now Guangzhou) in the PRC in 1906, Li & Fung (1937) Ltd was later established in Hong Kong in 1937 and remains a privately held investment group whose principal shareholders are Dr Victor Fung and Dr William Fung. Li & Fung (1937) Ltd is the controlling shareholder of private and publicly listed businesses involved in export sourcing, integrated distribution, retailing and property. Its public companies include Li & Fung Limited, the world's leading buying agency for consumer goods that manages the supply chain for retailers and brands worldwide through a sourcing network of over 70 offices in 40 countries and territories; Integrated Distribution Services Group Limited, Asia’s leading integrated-distribution services provider specializing in manufacturing, logistics and marketing. Convenience Retail Asia Limited, the fastest growing convenience store chain in Hong Kong and China. The Group has an investment arm which in 2006, acquired the Trinity Group of companies, a leading manufacturer and retailer of menswear in the greater China market, selling well-established brands, such as Kent & Curwen, Cerruti, Gieves & Hawkes and D’Urban amongst others through more than 300 retail locations.
The Li & Fung Group has a staff of over 25,000 worldwide. The Group’s publicly listed companies recorded combined turnover of US$8,207 million and combined profits of US$253 million in 2005.
About Li & Fung Limited ( www.lifung.com )
Li & Fung Ltd (SEHK stock code: 494) is the world’s leading buying agency and the export trading arm of the Li& Fung Group, managing supply chains for major brands and retailers worldwide. Headquartered in Hong Kong, the Group services its customers globally through a sourcing network of over 70 offices in 40 countries and territories, across North America, Europe and Asia.
In addition to the wide range and variety of consumer products available through its sourcing network, Li & Fung also leverages its strengths in custom product design and development to provide complete global sourcing solutions for its customers.
With a growing network of nearly 10,000 international suppliers, Li & Fung explores the world to find quality-conscious, cost-effective manufacturers in order to provide the highest-quality goods, exceptional value and reliable, on-time delivery. Committed to the highest standards, its 8,000+ staff around the world give Li & Fung the global reach and local presence to conduct strict quality assurance testing through factory evaluations, lab testing, on-site production monitoring and multiple inspections. The professionals at Li & Fung act as an extension of customers' own businesses to manage all aspects of the global supply chain.
About Integrated Distribution Services Group Limited ( www.idsgroup.com )
The IDS Group ("IDS"; SEHK code: 2387) is a leading integrated-distribution and logistics services provider in Asia covering the three core businesses of Marketing, Logistics and Manufacturing. The Group focuses primarily on serving brand owners of consumer and healthcare products who wish to penetrate the Asian market. IDS Manufacturing produces branded goods under license, IDS Logistics provides in-country and international logistics services and IDS Marketing sells and distributes products on behalf of brand owners. Headquartered in Hong Kong, IDS operates many countries in Asia offering a full menu of integrated-distribution and logistics services to 370 customers including an array of multinational brands. The Group manages over 60 distribution centers covering over 6 million square feet of space. The IDS Group is a member of the Li & Fung Group.
About Convenience Retail Asia Limited ( www.cr-asia.com )
Convenience Retail Asia Limited ("CRA", SEHK stock code: 8052), a member of Li & Fung Retailing, is engaged in the operation of one of the leading convenience store chains in Hong Kong under the brand name of Circle K. The Circle K store chain in Hong Kong comprises 250 company-owned-and-managed stores as of 31 December 2006.
In October 2002, CRA established Convenience Retail Southern China Limited in joint venture with Guangzhou Grain Group Limited and Shanghai Shenhong Corporation to develop the South China market. As of 31 December 2006, 52 Circle K stores were in operation in Guangzhou and eight stores in Dongguan and two stores in Shenzhen. In Macau and Zhuhai, there were a total of 22 sublicensed Circle K stores are in operation. Excluding Hong Kong, there were 84 stores in the Pearl River Delta Region.
About Dr. Victor Fung and Dr. William Fung
Dr Victor Fung is the Group Chairman of the Li & Fung group of companies. He also is Chairman of the Greater Pearl River Delta Business Council, the Hong Kong Airport Authority and the Hong Kong University Council.
Dr Victor Fung is the Vice-Chairman of International Chamber of Commerce, a member of Executive Committee of the Commission on Strategic Development. He also is Chairman of Hong Kong - Japan Business Co-operation Committee. From 1991 to 2000, he was Chairman of the Hong Kong Trade Development Council, and from 1996 to 2003, he was the Hong Kong representative on the APEC Business Advisory Council.
Dr Victor Fung is Chairman, Asia Advisory Board of Prudential Financial Inc. and a non-executive Director of Bank of China (Hong Kong) Limited, Baosteel Group Corporation, PCCW Ltd, Orient Overseas (International) Ltd and Sun Hung Kai Properties Ltd.
Dr William Fung is Group Managing Director of Li & Fung Ltd. Dr Fung is a non-executive director of various companies within Li & Fung Group including Convenience Retail Asia Limited and Integrated Distribution Services Group Limited.
Dr William Fung is past Chairman of the Hong Kong General Chamber of Commerce, the Hong Kong Exporters’ Association and the Pacific Economic Cooperation Committee. He is a member of the Trade Development Council and also both Court and Council member of HKUST and Chinese University of Hong Kong.
He is an independent non-executive director of HSBC Holdings PLC, CLP Holdings Limited, VTech Holdings Limited.
In November 2006 the Fung brothers were featured in TIME Magazine’s special issue on 60 Years of Asian heroes and were identified as Hong Kong’s masters of global manufacturing. They have been reported in leading publications including Business Week, Fortune and Forbes for organising production on a global scale and for developing a unique supply chain management model - from product design and development, through raw material and factory sourcing, production planning and management, quality assurance and export documentation, to shipping consolidation.