Posts Tagged ‘Shanghai’

  • PaperlinX pushes diversification with Shanghai operation

    PaperlinX is pushing its diversification strategy with the opening of a new operation in China, with a new Shanghai office set to serve as a sales office for its international trading business and as an Asian sourcing and procurement base.

    The company’s decision to open a China-based operation forms a key part of its ongoing diversification strategy, designed to minimise its dependence on the global paper market and work to become a leading materials merchant while expanding revenue streams beyond its traditional commercial print offering.

    With a renewed focus on growth, PaperlinX is targeting expansion in non-paper products such as industrial packaging, and sign and display. The strategy has already seen it purchase two additional businesses in the past year – Canterbury Packaging in New Zealand, which it picked up for AU$2 million, and Swedish sign and display company, Cadorit, which it acquired for AU$1.1 million in June.

    Globally, the company has put in place a series of measures to simplify its organisational structure, revitalise and improve efficiency; moves that underpin its commitment to drive performance improvements, strengthen the balance sheet and restore profitability.

    The diversification strategy follows the complete turnover of the company’s board along with much of its management, record losses in the financial year ending 2012 and the subsequent sale of many of its businesses in the USA, parts of Europe and other global regions.

    Early this year, PaperlinX reported a statutory loss of A$57.3 million for the six months ending December 2012, although its earnings in the local region was up by $2.1 million from the previous year’s results to $7.8 million.

    PaperlinX says that the decision to consolidate its merchanting brands and trade throughout the UK and Europe has eliminated duplication in many areas and leveraging the power of one brand is, according to executive director, Andrew Price (pictured), helping the company to maximise its buying power.

    “Within our ANZA businesses, we source significant volumes of product from China,” says Price. “Opening an office in Shanghai gives us the opportunity to leverage our procurement power globally; this will further enhance the Group’s supply chain efficiency and better fits with a Group-wide commitment to streamline processes, as well as eliminate both cost and inventory duplication.”

    The company says that, in addition, having a single point of contact in China will encourage better collaboration between individual countries, facilitate information sharing and provide the PaperlinX group with access to a wider gamut of sales and sourcing options. According to the company, this resource will also fully support the bespoke branded web storefront initiative recently launched to the group’s UK customers and which will shortly be rolled out across Europe.

    PaperlinX intends to expand the existing 500-strong product offering in direct response to customer demand and will, in order to achieve greater cost efficiency and supply chain efficiency, source new lines via the Shanghai base.