Kerry Logistics Network to Develop 50,000 sq m Bonded Logistics Centre in Hainan FTP to Tap into the Growing Duty-free and Inbound e-Commerce Market

HONG KONG SAR�- Media OutReach - 16 December 2020 - Kerry
Logistics Network Limited (‘Kerry Logistics Network’; Stock Code 0636.HK)
announced today the development of a bonded logistics centre in the Haikou
Integrated Free Trade Zone (‘Haikou FTZ’) in the Hainan Free Trade Port
(‘Hainan FTP’) to support the Chinese government’s new policy. The 50,000 sq m (538,200 sq ft) facility, expected to complete in 2023
Q1, will contain 10,000 sq m (107,600 sq ft) of cold store. Kerry Logistics
Network is the first international 3PL to invest and build a premium bonded
logistics centre in the Hainan FTP.

 

China’s State Council announced the “Master Plan for the Construction of
Hainan Free Trade Port” in June 2020, intending for it to be a
globally-significant free trade port by 2050 and the largest free trade zone in Mainland China. To support the development of the tourism,
e-commerce and logistics industries in the Hainan FTP, a zero-tariff regime
will be established for the trade of goods in which certain categories of
imports are entitled to zero-tariff treatment. In the future, imported goods
bought by Hainan residents will be exempt from import tariffs,
value-added tax and sales tax. Imported goods with over 30%
value-added processing in the FTP will be exempt from tariff when sold to other
areas in Mainland China.

 

Since July 2020, Hainan Island’s annual tax-free shopping quota has been
increased from RMB 30,000 per person per year to RMB 100,000 per person per
year, which drove up the duty-free sales in that month by 234.2% year-on-year.
Total amount of duty-free sales during Mainland China’s National Golden Week in
October 2020 has risen by 148.7% year-on-year to RMB 1.04 Billion.

 

Kerry
Logistics Network is well-positioned to capture this growth as it has been the
logistics partner of two existing duty-free shopping centres in Hainan since
2011 and has recently been contracted to provide logistics services to three
newly-registered duty-free shopping centres. It has a long-established presence
of over three decades in Hainan, having set up the Hainan branch in 1987 and
commanding significant market share as the largest freight forwarder in Hainan.
The Hainan branch has been accredited with Customs AEO Advanced Certificate and
is a Top National Customs Brokerage Company in Mainland China as well as the
only National Standard Implementation Demonstration Unit for the “Customs
Brokerage Service Specification” in Hainan.

 

William Ma, Group Managing Director of Kerry Logistics Network, said,
“We are confident in the prospects of duty-free consumption in Hainan.
Leveraging Hainan province’s geographical advantage in South China and its
proximity to Southeast Asia, the Hainan FTP will be an important gateway to
handle the fast-growing duty-free and inbound e-commerce cargoes. Our new
bonded logistics centre in Haikou FTZ will be instrumental in helping our existing customers to expand into the Hainan
duty-free sales channels and capture new business opportunities. As the logistics
partner of Hainan’s five duty-free shopping centres out of six in total, our
new bonded logistics centre will significantly boost our capability to seize
the tremendous opportunities presented by this new free trade zone and serve as
a powerful engine to propel our growth.”

About Kerry Logistics Network Limited (Stock Code 0636.HK)

Kerry
Logistics Network is an Asia-based, global 3PL with a highly diversified
business portfolio and the strongest coverage in Asia. It offers a broad range
of supply chain solutions from integrated logistics, international freight
forwarding (air, ocean, road, rail and multimodal), industrial project
logistics, to cross-border e-commerce, last-mile fulfilment and infrastructure
investment.

 

With a
global presence across 59 countries, Kerry Logistics Network has established a
solid foothold in half of the world’s emerging markets. Its diverse
infrastructure, extensive coverage in international gateways and local
expertise span across China, India, Southeast Asia, the CIS, Middle East, LATAM
and other locations.

 

Kerry
Logistics Network generated a revenue of over HK$40 billion in 2019 and is the
largest international logistics company listed on the Hong Kong Stock Exchange.