COLD storage logistics specialist Haisan Resources Bhd will begin discussions with Walls China, the ice-cream and confectionary division of Unilever, at the end of this month on the possibility of taking over storage operations of dry and temperature-controlled food in Beijing, said managing director Ong Chin Yet.

The discussion is expected to materialize in three to six months if “the terms are agreeable”, according to Ong.

If granted the contract by Walls China, the possible investment that Haisan is looking at is 5,000 pallets for temperature-controlled food and 4,000 pallets for dry warehouse in Beijing. (One pallet is equivalent to one tonne).

Ong told Starbiz in an interview in Port Klang that Walls China had even approached Haisan on the possibility of managing the storage of its ice-cream products in Shanghai and Wuhan.

“At the moment, we are taking things one step at a time,” he said, adding that it was crucial to evaluate all terms and conditions set forth and the business cultures in different states.

Haisan set up operations in Guangzhou, China, early this year by incorporating a wholly-owned subsidiary Iglo (Guangzhou) Co Ltd when Walls China awarded a five-year contract to Haisan to manage its ice-cream product for total temperature-controlled logistics services. The Guangzhou plant began its operations in March.

Haisan has since invested RM9mil to acquire the land, plant and equipment in Guangzhou. It has completed phase one of its plant there, comprising 1,700 pallets, with a 95% to 98% take-up rate by Walls China.

Ong said he was expected to pump in RM10mil on phase two to build an additional 4,000 to 5,000 pallets. This phase is expected to be completed by the second quarter next year.

The expansion is due to Haisan’s strategic plans to source for opportunities to manage temperature-controlled logistics for multinationals involved in the food industry in Guangzhou.

Ong said he was currently in early discussions with a few fast-food players.

He said to stay ahead of competition; Haisan’s focus was to invest in new technology by providing a total food supply chain value to his customers. “It would mean utilizing technology on better ways to inform our customers on the status of their logistics.”

Ong is bullish on his prospects in China due to the country’s 1.28 billion population, which will give Haisan a strong base for its logistics business. China’s gross domestic product in the first half of this year grew 8.2%.

He said the pick-up in outsourcing trend would provide ample opportunities for Haisan.

The global value of third party logistics is projected to reach US$100bil this year, according to a report by research and consultancy house McKinsey & Co.