Rudd-backed eCargo takes $11m bite of Met­cash ex­port arm

The Weekend Australian - - BUSINESS - GLENDA KORPORAAL

The Jes­sica Rudd-backed eCom­merce com­pany eCargo is buy­ing 85 per cent of the ex­port busi­ness of su­per­mar­ket and gro­cery com­pany Met­cash, in­clud­ing its China-based Asian busi­ness, in a deal worth more than $11 mil­lion.

Rudd is a di­rec­tor and share­holder in the boom­ing ASX-listed eCargo Hold­ings which spe­cialises in sell­ing Aus­tralian food, wine and health care prod­ucts into the China mar­ket on e-com­merce plat­forms such as Alibaba.

The Bris­bane-based Rudd be­come a di­rec­tor of eCargo af­ter sell­ing 45 per cent of her Chi­nafo­cused e-com­merce busi­ness, Jes­sica’s Suit­case, to eCargo, in Jan­uary. eCargo also an­nounced this week it would be buy­ing the out­stand­ing 55 per cent stake in the busi­ness.

The deal will merge eCargo’s on­line busi­ness sell­ing Aus­tralian goods into China with Met­cash’s China busi­ness which sells Aus­tralian prod­ucts on­line as well as through its dis­tri­bu­tion arms with super­mar­kets and re­tail groups in 11 provinces across China.

“We are ex­cited to con­tinue to bring Chi­nese con­sumers the best Aus­tralia has to of­fer,” Rudd said from Shang­hai where she is tem­po­rar­ily based.

Rudd said she would also con­tinue her role as a life­style am­bas­sador for Chi­nese e-com­merce gi­ant Alibaba which launches its lat­est Sin­gles Day an­nual shop­ping event in China to­mor­row, an event which has be­come the big­gest shop­ping day in the world.

Met­cash chief ex­ec­u­tive Jeff Adams said the deal would al­low the com­pany to have a stake in a grow­ing China busi­ness.

“China con­tin­ues to pro­vide a good op­por­tu­nity for growth,” he said. “We be­lieve this ar­range­ment, which in­cludes re­tain­ing part own­er­ship, fits well with our strate­gic di­rec­tion.”

Met­cash opened an of­fice in China a few years ago to help with sourc­ing goods for super­mar­kets in Aus­tralia which in­clude IGA and Camp­bells Whole­sale Group.

But the busi­ness ex­panded into sell­ing goods from Aus­tralia, in­clud­ing food and health and beauty prod­ucts to the China mar­ket on e-com­merce plat­forms in­clud- ing Alibaba’s TMall Global and JD World­wide, and then di­rectly to super­mar­kets and re­tail­ers across China in many third, fourth and fifth tier ci­ties.

John Lau, ex­ec­u­tive chair­man of eCargo, said the deal with Met­cash sup­plied “a miss­ing piece of the puz­zle”.

“While we are good at lo­gis­tics, the Met­cash sup­ply agree­ment gives us ac­cess to qual­ity Aus­tralian prod­ucts at com­pet­i­tive prices,” he said. “It also gives eCargo ac­cess to key off­line whole­sale dis­tri­bu­tion channels in China, par­tic­u­larly out­side the tier 1 and tier 2 ci­ties.”

Will Zhao, the head of Met­cash’s China op­er­a­tions based in Shang­hai, will be­come the in­terim chief ex­ec­u­tive of eCargo, fol­low­ing the res­ig­na­tion of Eva Zhang.

He will be sup­ported by Haiyun Chen, Met­cash’s head of China ex­port devel­op­ment, who will be ap­pointed to the Syd­ney based role as eCargo’s di­rec­tor of in­ter­na­tional sup­ply chain.

In a sep­a­rate an­nounce­ment, eCargo said that it would also be buy­ing the fi­nal 55 per cent of the shares in Jes­sica’s Suit­case.

This fol­lows a deal in Jan­uary where eCargo bought a 45 per cent stake in Ms Rudd’s busi­ness which sells prod­ucts in­clud­ing Pen­folds wines, health prod­ucts and food to the Chi­nese con­sumer mar­ket.

Jes­sica Rudd

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