Last Updated:2018-11-01
Florence and Roger Tong, the Chinese founders of Australian logistics group
Wiseway Group, will list their 13-year old group on the Australian Stock
Exchange on Wednesday. The freight forwarding company is raising $26 million to raise capital to expand its fresh food offering into China.
Geoff Raby, the company's chairman and Australia's former ambassador to China, said the opportunities for companies, which can transport goods from Australia to China efficiently and quickly, were enormous.
"They have invested to capture the growing fresh food trade. They can deliver fresh milk into Chengdu [in central China] within 24 hours from the farm gate in Australia. They are shipping mangos and salmon from Tasmania. We see the real growth potential from the business in fresh food," Mr Raby told The Australian Financial Review.
Mr Raby, who will be in China for Shanghai's major import-themed trade fair next week, said the
company was the No.1 air freight consignor to China and had strong relationships with many of the Chinese airlines now flying to Australia. Taking the company public also raises its credibility with Chinese carriers, which see an ASX-listing as a sign of trust and good corporate governance.
The couple, who are originally from China, started the business in Australia 13 years ago. It makes 95 per cent of its revenues from air freight forwarding, owns depots in most Australian capital cities and has a fleet of 75 trucks.
While the company has specialised in dry cargo, like powdered milk and vitamin supplements, it has been expanding to capture the booming growth in fresh food trade with China.
Mr Raby, who runs a Beijing-based business advisory firm, said he was attracted to the firm for
its growth potential, business model and its founders. The company employs a group of graduate students who allocate the freight in real time online, which means the company can more efficiently allocate goods as soon as the capacity is available.
"Like any business with China you have to have scale and agility and speed. And that is the secret to the business.
"This represents the scale of China and massive growth. It is all tied in to the growing middle class and high-value consumption story. People will pay premiums for their clean, green, made- in-Australia products."
The company is offering 52.1 million shares at 50¢ per share to raise $26.1 million. The offer is over-subscribed. The company will list on the ASX on Wednesday.
Wiseway is expected to generate $103.4 million of revenue in the 2019 financial year.
The company provides air freight, sea freight, import services, domestic transportation, warehousing and customs clearance services, to about 700 customers. Its cargo includes infant milk formula, vitamins and health related products, while perishables cargo includes dairy products, meat, seafood and fresh produce.
