Cathay Capital invests $20m in China cold chain company

ZM Logisitcs was set up in 2011 following the integration of the logistics business of Zhengming Group and Shanghai Zhengming Transportation, which was established in 1994. The company specializes in cold chain logistics, auto-part logistics, fast-moving consumer goods logistics and logistics in pharmaceuticals.

The business has 40 subsidiaries with a sales network covering 90% of China's major cities and a fleet of nearly 1,000 vehicles, 600 of them modern cold chain transport vehicles. The firm moves more than 5,500 tons of cold chain cargo a day and 9,500 tons of other cargo. Its clients include McDonald's, Mengniu Dairy and Haagen-Dazs.

According to the Wall Street Journal, the commitment comes from Cathay's $200 million Sino-French fund, which was launched last year with investments from French state-owned bank Caisse des Depots Group and the state-owned China Development Bank.

The fund targets investments in small and medium-sized French companies that can expand into China or Chinese businesses that could benefit from Western expertise.

Cold storage logistics is another way in which investors are able to tap into food safety concerns among Chinese consumers.

This week CITIC Capital was part of a consortium that invested in domestic courier SF Express, which has a cold chain business. Last year Baird Private Equity took a stake in Henan Bingxiong Refrigerated Truck, a Chinese company that makes refrigerated trucks.

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• Topics
• Greater China
• Expansion
• Support services
• China
• Logistics
• Cathay Capital Private Equity
• Growth capital