TOKYO -- Japanese logistics company Sankyu will launch a joint venture in China's Shandong Province with Chinese textile producer Qingdao Jifa Group in early August.
The 50-50 venture will be capitalized at some 200 million yen ($1.94 million). It will build on the outskirts of Qingdao a large distribution center that will begin operating in December.
The logistics center will initially have 13,000 sq. meters of floor space and be expanded as volumes rise. The employee count will also increase from the initial 60 or so to around 140 in one to two years.
In addition to warehousing locally produced clothing, the new center will offer third-party supply chain services, such as quality inspection and pick-and-pack services, primarily to major Japanese apparel retailers.
Currently, most of those services are typically performed after products are exported to Japan. By moving such labor-intensive work to China, the company aims to shorten delivery times and reduce costs for supply chain services, inventory management and trucking.
Sankyu has eight local subsidiaries in China, but this marks its first time teaming up with a Chinese manufacturer. Using the new location as a base, it expects related sales of around 1.5 billion yen a year.