June 6, 2018 / 7:27 AM / in a year

Alibaba's Cainiao JV to invest $1.53 billion in Hong Kong logistics hub

FILE PHOTO: A logo of Cainiao Smart Logistics Network Ltd is seen outside its industrial park in Jinhua, Zhejiang province, China March 29, 2017. Picture taken March 29, 2017. REUTERS/Stringer

SHANGHAI (Reuters) - Alibaba Group Holding Ltd’s (BABA.N) logistics affiliate said on Wednesday that it would lead a joint venture to invest $1.53 billion in a new logistics center at Hong Kong’s airport as part of its efforts to expand its global delivery network.

Cainiao Smart Logistics Network will take a 51 percent stake in the joint venture, while Chinese state investment firm China National Aviation Corp (Group) and courier YTO Express (600233.SS) (6123.HK) will each hold 35 percent and 14 percent, respectively, Cainiao said in a statement.

It said that the center, which will cover an estimated gross floor area of 380,000 square meters, is expected to be able to handle 1.7 million tonnes of cargo per annum at full capacity after it opens in 2023.

“The Hong Kong hub will be yet another milestone on our way to achieving our goal of 72-hour global delivery,” Cainiao President Wan Lin said.

Chinese e-commerce giant Alibaba took control of Cainiao last September and pledged to spend 100 billion yuan ($15 billion) over five years to build out a global logistics network.

Cainiao already has three fulfillment centers in Hong Kong and last week said that it planned to open logistic hubs in Dubai, Hangzhou, Kuala Lumpur, Liège in Belgium and Moscow.

Reporting by Brenda Goh; Editing by Amrutha Gayathri

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