Friday, February 22, 2008

The Local - Kalmar's Chinese market put on ice

The Local - Kalmar's Chinese market put on ice: Kalmar's Chinese market put on ice
  • Published: 10 Dec 07 16:10 CET
  • Online:

Plans for a giant Chinese wholesale market in Kalmar have been put on ice. Chinese company Fanerdun, the driving force behind the project, has agreed to give back half of the proposed site to Kalmar council amid concerns about the project's financing.

Building work was brought to a formal halt after a meeting on Sunday between Kalmar council and the owners of Fanerdun, Sveriges Radio reports.

Helge: We've a ten times smaller China Center in Kouvola, Finland. It opened its doors 20.9.2007. The center started with 30 instead of planned 150 shops, but expects to get more shopkeepers to open 2008.

Some 40 of the 130 construction workers who came to Sweden from China three months ago have already been sent home, with the rest set to follow. They are owed 10 million kronor in unpaid wages.

Helge: I've no information on that in Finland. The shop in shop keepers are however waiting for Finnish and European distributors to show up.

Fanerdun CEO Jinxing Luo told Sveriges Radio that he was unhappy with building firm Xin Xin and was looking for a replacement. He also said that currency exchange red tape had delayed the introduction of major investment, but he was confident that the issue could be resolved in the near future.

Helge: The project in Kouvola continues. The major of the city of Kouvola visited China in the beginning of February 2008 to clear out some of the visa problems for Chinese employees.

The Sweden-China Commodity Wholesale Market aims to match up thousands of Chinese exhibitors with European retailers who wanted to get a piece of China's growing, and cheap, consumer product market.

Helge: The goals of several thousand visitors per day is a huge if not an impossible goal.

"This is going to be a trading place between China and Europe. China is a large market, and there's a huge demand for Chinese products," the chief executive of the Swedish division of Fanerdun, Peter Fust, told AFP in an interview earlier this year.

Helge: Trading place, yes, perhaps.

The main exhibition hall – a former chocolate factory – was intended to offer 1,400 stands or 21,000 square metres (226,000 square feet) of exhibition space when completed in March 2008.

Helge: March 2008 is just around the corner.

A later phase was to see the construction of another 1,400 stands, providing a total of 80,000 square metres of exhibition space or the equivalent of 13 football pitches.

Helge: Huge!

Fanerdun hoped the project, also known as the China Europe Business and Exhibition Centre (CEBEC), would ultimately draw some 2,000 visitors a day, or several hundred thousand buyers a year.

Helge: Maybe, maybe not? Ideapark in Lempäälä has as a goal to get 1 million visitors.

But minor scandals have dogged the project from the beginning. In addition to delays, the Chinese construction workers were not paid their wages and safety regulations were not initially followed at the site.

Helge: Culture shock!

Fanerdun's chief executive, Jingxing Luo, also promised Chinese investors both work and residency permits if they signed on to the project – a claim Swedish authorities immediately denied.

Helge: Same as in Finland.

But all of that was eventually sorted out, and Kalmar's councillors are hoping the market will bring an economic boom to a town which has seen industry after industry shut down.

It was Fanerdun's chief executive, Jingxing Luo, who chose the south eastern town and approached local officials, who jumped at the idea.

Jingxing had selected Kalmar because of its nearby airport, railroad, harbour, and motorway, the fact that the risk of unrest was low in Scandinavia and he was impressed with the low level of corruption and corporate taxes in Sweden.

Helge: Logistics! for product shipment isn't enough. They need to reach buyers, clients, business to business people, shopkeepers.

The city sold land to Fanerdun for 18 million kronor, and had earmarked 9.5 million kronor for marketing of CEBEC.

Helge: The city didn't loose anything yet in Sweden. I read about it in HS. Doubt exists >>

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