Macao's Nam Kwang Closes Merger Deal with China Travel Service

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Last updated at: (Beijing Time) Thursday, July 17, 2003

Macao's Nam Kwang Closes Merger Deal with China Travel Service

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Macao's oldest Chinese-funded enterprise, the Nam Kwong (Group) Co. Ltd, has closed its merger deal with the China Travel Service (Macao), a subsidiary of the China Travel Group, to enter the tourist industry.

Macao News Daily's sources with Nam Kwong said Wednesday that the company has acquired an approval from concerned state departments on the merger, which became effective on Tuesday.

Founded in 1949, Nam Kwong has been one of the major conglomerates in the Macao Special Administrative Region (SAR), which is mainly specialized in retail and wholesale business as well as hotels and international trade. The merger was seen as itsstrategic step to march into the tourist industry.

Insiders here also believed that the merger was a result of thestate-owned enterprise reform in the Mainland, which has led to separation of commercial management of the service industry from the administrative bondage.

Although affiliated to the China Travel Service Group, the Macao Branch as the largest travel service provider in Macao sinceits founding in 1961 was itself a large conglomerate owning over 20 outlets in the Region and setting up nine representative offices and hotels in the Mainland, Hong Kong and Canada.

Lao Pun-Lap, secretary of the Macao Economic Study Society, said that since the merger was largely a strategic move rather than an acquisition on the assets, it has not caused a big change in the management structure so far, but it can surely enhance the competitiveness of the Chinese-invested firms in Macao.

After the merger, the China Travel Service Macao has become oneof Nam Kwong's four subsidiaries, along with the Nam Kwong Petro Chemical, Nam Kwong Trade and Nam Kwong Industrial Development.

The deal is important for Nam Kwong's future development since tourism has been designated as Macao's pillar industry contributing the bulk to the Region's gross domestic product (GDP),said Lao.

The company had a great boom at the start of the 1990s, when the annual sales volume once reached 1.6 billion US dollars. But the business lost its luster and went into debt due to the unfavorable market environment and mismanagement. Nam Kwong went through an assets reshuffle, which helped it basically overcome the debt problem, after Macao's return to the motherland in December 1999.

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