[photopress:logistics_grand_power_1.jpg,full,alignright]Grand Power Logistics has entered into an agreement to sell, on a private placement basis, a minimum of $5 million and a maximum of $10 million worth of shares.
Historically, almost all of the Company’s revenues have been from air freight co-loading, which grew by 68% to $99.6 million in revenues for the year ended December 31, 2007 and is expected to continue its strong growth in 2008
Grand Power intends to use a portion of the net proceeds to open new sales offices and hire experienced local sales people in Chinese cities with major airports, by increasing air freight capacity (including charter flights) and by signing additional airline partnerships.
Grand Power believes it has now has reached a critical mass in the scale of its operations at which point it can attract volume discounts and make long term commitments on the air cargo space it purchases.
Grand Power intends to use the remainder of the net proceeds to initiate the building of a domestic express network in China.
A domestic express network is a small package door-to-door express courier service within China which targets small and medium sized enterprises.
[photopress:china_5_big_1.jpg,full,alignleft]In 2007, China’s domestic express network market generated revenues of approximately US$5.9 billion. Management believes the market is highly fragmented, with over 30,000 companies operating in the space.
Despite its scale and fragmentation, the domestic express network market in China is experiencing rapid growth, having grown at a compound annual growth rate of over 28% since 2004. The illustration gives a simplistic graphic demonstration of that growth.
Source: CNW Group
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