By Tu Lei (chinadaily.com.cn)
Updated: 2007-11-15 16:10

Watts (Ningbo) International Trading Co Ltd, a Watts Water Technologies member, decided to launch its distribution center in Ningbo Bonded Logistics Zone, Ningbo City of East China's Zhejiang Province, in January this year.

After less than one year's development, the zone has brought the firm much more than was expected, said company's general manager James Jiang when interviewed on November 14.

James Jiang, general manager of Watts (Ningbo) International Trading Co Ltd, explains the distribution process in Ningbo Bonded Logistics Zone, Ningbo City of East China's Zhejiang Province on November 14, 2007. [chinadaily.com.cn]

"Our supply chain's lead time has dropped 15 days here, and transportation costs have been cut a lot," said Jiang, who declined to give the exact figures of cost saving, but said they were "huge" compared with that of factories in the United States.

The firm is expected to realize a general purchasing value of 100 million yuan in 2007, and plans to open a second distribution center in Tianjin Municipality, another costal city in North China, said Jiang.

Watts is not alone. There are more than 500 enterprises, including Ningbo Chi Mei Optoelectronics, conducting business via this bonded logistics zone in order to reduce costs.

Zone's effect has expanded to more regions such as Shanghai Municipality, Jiangsu, Fujian and Shandong provinces.

The zone features functions including international transferring, international distribution, international and domestic purchasing and simple circulation processing, said an anonymous official at the logistics bureau of the Ningbo Free Trade Zone (NFTZ) on November 14.

Moreover, the logistics zone has favorable policies, said the official, explaining firms within can claim tax rebates for their merchandise after custom clearance, and merchandise circulates free of VAT and consumption tax.

At the same time, the containers have no time limitations on length of time stored in the port, and its customs clearing is more efficient, said the official.

Figures from Customs show the freight traffic in the zone totaled 254,000 tons and was worth US$1 billion yuan in the first ten months of this year, while the growth rate of the third and fourth quarter last year was 146 and 137 percent respectively.

As of the end of this October, there were 18 firms with a registered capital of 226.80 million yuan in the zone.

With a planned area of 0.95 square kilometer for its phase 1, the zone was established with the approval of the State Council in August 2004.

The logistics zone belongs to the 6.25-square-kilometer NFTZ in Ningbo City, and NFTZ will welcome its 15th birthday on 19 November this year.