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Sun 31 Jan 2010 12:38 PM

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Aramex in talks over Chinese expansion plan

Fadi Ghandour also said he was optimistic about his firm's first quarter results.

Dubai-based logistics firm Aramex is in talks with a Chinese company to finalise a joint venture deal, as it looks to expand in one of the world's fastest-growing economies, its chief executive said on Sunday.

Fadi Ghandour also said he saw indications of a rebound in global trade activity, which left him optimistic about first quarter results.

Aramex shares were up 1.23 percent to AED1.64 at 0814 GMT.

Aramex beat analysts expectations on Saturday, after posting a better-than-expected 28 percent rise in fourth-quarter profit, and said it was looking to focus on expansion in 2010.

"China is the core of our strategy," said Fadi Ghandour. "We have studied the market and feel this is the right time for us to expand."

The company operates in China through its Shanghai office, but plans to expand into Beijing and Shenjing after it concludes the joint venture, said Ghandour.

"We are in talks with a Chinese company for a joint venture and expect to announce this in the first quarter, if not then the second," he said, declining to name the company.

Aramex, which competes with global giants such as Fedex and DHL, reported an increase in net profit to AED49.5 million ($13.5 million), beating the most optimistic analysts forecasts.

Ghandour said fourth-quarter profit increase was a result of the company's low debt level and business model, which allowed it to shift its cost base.

"Airline, shipping and sea freight costs did go down and that effectively has trickled down to the bottom line," he said.

"We are still trying to feel our way, but with Q4 positive results gives us an indication that we'll have similar growth." when asked about the first quarter. (Reuters)

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