Panalpina agreed to acquire the Argentinian perishables specialist Newport Cargo S.A., subject to conditions.
On Wednesday, Swiss forwarder Panalpina released news of a new deal to acquire Argentine logistics company Newport Cargo S.A. in a move that will bolster its orientation toward the growing Latin American perishables market.
Newport Cargo handles 24,000 tonnes of freight exports per year, consisting mainly of U.S.-bound fish and berries.
Following the merger, the cargo will flow northbound through Panalpina’s charter network, stopping at its U.S. facility in Huntsville, Alabama, before being distributed through other North American hubs.
The Swiss forwarding giant’s investment in the region is a response to a growing demand for Latin American perishables.
According to the International Air Transport Association (IATA), net profit from airfreight in Central and South America is projected to grow 80 percent to US$900 million between the end of 2017 and next year.
Latin America is one of the world’s high-production regions for fresh produce, said Stefan Karlen, CEO of Panalpina.
The two companies will merge into one location in Buenos Aires, Argentina’s capital, doubling Panalpina’s presence in the country.
Headquartered in the centre of Buenos Aires and with offices at the Ezeiza International Airport, Newport Cargo claims its handling of 24,000 tons of air freight exports per year, makes it the market leader in Argentinian air freight exports. It primarily moves fish and berries to the US, where the company has a strong customer base and an office in Miami, while Panalpina traditionally imports high tech and consumer goods into Argentina.
The company says that cargo flows from South America northbound can be connected with or integrated in the Panalpina Charter Network with its gateway in Huntsville, Alabama.
Stefan Karlen, CEO of Panalpina, explained, “Panalpina’s perishables activities originated in Latin America, which is one of the world’s high-production regions for fresh produce. By acquiring Newport Cargo, we are not only gaining control over Argentinian perishables exports but from neighbouring countries too. Fish, fruit, and seeds for example, are trucked from various regions across the border to Argentina and flown out of Buenos Aires. So with this acquisition, we are expanding our perishables footprint in an entire region and again strengthening our global end-to-end capabilities for perishables.”
The company’s 42 staff, who serve 150 customers, and the 60 employees of Panalpina Argentina will be joined under one roof in Buenos Aires. Once the deal is closed, Newport Cargo’s CEO Federico Calvo will join Panalpina and be responsible for the company’s Air Freight operations in Argentina.