Posted: February 1, 2014 |  AUTHOR: KEN FOX | CONTACT ME


The words “ trading company” conjures up thoughts about “trading posts” in the old (USA) west, where settlers or American Indians would trade animal pelts for food supplies. The term also reminds us of the Dutch East India Company chartered in 1602 whose mandate was “to carry out colonial activities in Asia.” From 1602 to 1796, the Dutch East India Company had 4,785 ships that carried more than 2.5 million tons of Asian trade. That company went bankrupt and was dissolved in 1800. There was also a smaller, British East India company, chartered in 1600, which was dissolved in 1874.


Hutchinson Whampoa must have copied some ideas from these earlier trading companies. This massive trading conglomerate is based in Hong Kong and headed, by billionaire, 85 year old, CEO Li Ka-shing (pictured above). Li is dubbed “Superman” in Hong Kong because of his financial record. He has built a fast growing empire from a plastic flower business started in the 1960’s which grew into Hutchison Whampoa in 1977. The company had world-wide revenues of U.S.$32.3 billion in 2012.

Hutchison Whampoa Limited (OTC: HUWHY) is truly global. Their 2012 revenue was derived by region as follows:

Screen Shot 2014-01-30 at 2.54.06 PM

The company operates in 52 countries, with about 250,000 employees. It operates in six core businesses:
1 Ports and related services-The division is called Hong Kong International Terminals or HIT, which was started in 1969. It represents one of the largest privately owned container terminal operators in the world, holding interests in 52 ports (countries), comprising 276 berths in 26 countries. Their ports handled 76.8 million TEUs (twenty foot equivalent units) in 2012. They also engage in river trade, cruise terminal operations and port related logistical services.


2 Property & Hotels-The company invests in leading real estate projects, from office buildings to luxury residential properties. Their investments are mainly in Hong Kong but also include joint ventures in mainland China and select overseas markets. They also hold ownership in eleven premium hotels in Hong Kong, mainland China (including the Grand Hyatt Beijing and Great Wall Sheraton) and the Bahamas.


3 Retail-A.S. Watson is one of the world’s largest health and beauty retailers. The store chain has over 11,000 stores in 30 countries worldwide. Watson’s generated worldwide revenue of U.S.$19.2 billion in 2012. Watson is the personal care market leader in China, with 1,438 stores. Its diverse retail empire includes health and beauty products, luxury perfumeries and cosmetics, supermarkets, consumer electronics, electrical appliances and airport (duty free) retailing.watsons

Hutchison owns many health and personal care retail brands in Europe, including: Drogas, Kruidvat, Rossmann, Savers, Spektr, Superdrug and Trekpleister. They also own ParknShop, one of two dominant supermarket chains in Hong Kong, Macau and Southern China.

Li Ka-shing is expected to take Watson public this year, launching the world’s biggest retail IPO. He wants to use the funds raised to expand his health & beauty business in China. This Chinese market segment is expected to grow about 40% and be worth U.S.$186 billion by 2015.

4 Infrastructure-This division is called Cheung Kong Infrastructure, which acts as a leading investor on various projects in: Hong Kong, the UK, mainland China, Australia New Zealand and Canada. Ventures include: waste management, water, transportation and energy, including power transmission.

5 Energy-This division mainly operates under a public Canadian company Husky Energy, Inc.(Toronto Exchange: HSE). Investments include oil well drilling, natural gas discovery, production and storage. It mainly includes investments in Canada, the U.S., mainland China, Greenland and Indonesia.hutchison

6 Telecommunications-The company is a leading global operator of mobile telecommunications and data services. They are also a major owner and operator of fixed line networks in Hong Kong. The company claims to serve as a key telecommunications gateway to Mainland China.

Assuming Watson’s goes public, along with Alibaba (see October 1, 2013 blog), 2014 will showcase two of the largest Chinese company’s IPOs in history. Hutchison Whampoa exemplifies the mindset of a large conglomerate, quietly and consistently acquiring and partnering around the globe. Most of us, especially outside of Asia do not fully understand its reach and influence on global business. Assuming there is a succession plan in place to follow the elder Mr. Li Ka-shing, he will be a tough act to follow. The company’s proximity, experience with and understanding of the Chinese market assure them of continued growth. Hutchison Whampoa will continue to be a gateway to this expanding and complicated market. This positive reputation should also bode well for other growing Southeast Asia markets, especially Myanmar and Indonesia.

Hutchinson Whampoa Annual Report, 2012
Watson’s IPO to Allow Li Ka-shing to expand in China, South China Morning Post, October 23, 2013
Hutchison Considers Retail IPO, Wall Street Journal on-line, October 20, 2013

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