April 28, 2024

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CJ Logistics' global distribution center in Incheon (CJ Logistics)

CJ Logistics, the nation’s largest logistic firm, affiliated with retail giant CJ Group, is speeding up its overseas expansion this year, according to industry sources on Monday.

Its Indian subsidiary, CJ Darcl Logistics, aims to make its stock debut in the first half of the year, while the company plans to start construction of three massive distribution centers in the US later this year.

CJ Logistics, commanding 45 percent of the domestic parcel delivery market, has been steadily expanding its presence to 34 countries and 271 cities worldwide in its push for global expansion. Out of total sales of 11.8 trillion won ($8.86 billion) last year, overseas revenue accounted for 4.2 trillion won.

Key global markets for this year include the US, India and Saudi Arabia.

The North American project, with an investment of about 600 billion won in collaboration with the Korea Ocean Business Corp., is slated for phased completion starting from the first half of 2026. The project will see the establishment of distribution centers at three locations -- two in Chicago and one in New Jersey -- owned by CJ Logistics America, a subsidiary of CJ Logistics.

Spanning some 360,000 square meters collectively, equivalent to the size of 50 standard international soccer fields, these centers are strategically located near major airports and logistics hubs to provide integrated logistics services linking various modes of transportation.

The planned Chicago sites border the BNSF Railway, the largest US freight rail company, and O'Hare International Airport, a premier cargo hub. The New Jersey facility is adjacent to Port Newark and John F. Kennedy International Airport.

Upon completion, the North American logistics centers will facilitate the entry of Korean products to the North American market. They will also support logistics activities for the construction of three US battery plants, following a 300 billion-won contract acquisition from Korean companies.

Meanwhile, Indian affiliate CJ Darcl Logistics aims to finalize its listing process by June at the latest, after submitting a preliminary listing request to the Securities and Exchange Board of India in September last year. CJ Darcl Logistics currently operates 187 bases across India and provides logistics services to over 2,900 business clients.

In Saudi Arabia a global distribution center is under construction at Riyadh’s Special Integrated Logistics Zone, which was set by the Saudi government at the King Khalid International Airport under aims to position the kingdom as a logistics hub by 2030.

With an investment of 60 billion won, the project features daily processing capacity of 15,000 boxes, and is expected to start operating in the latter half of this year.

In November, CJ Logistics inked a memorandum of understanding with Saudi Arabia's Nesma Group, the entity overseeing the Saudi global distribution center construction. The initiative is anticipated to open avenues for CJ ICM, CJ Logistics’ Middle Eastern subsidiary, particularly in the field of heavy goods logistics and inland transportation.

By Kim Hae-yeon (hykim@heraldcorp.com)