Companies: ADSL   

Asia Distribution Solutions (ADSL) is growing its drinks distribution network to capitalise on increasing affluence and thirst for foreign products in China as well as the demand from manufacturers to improve current channels.

ADSL, established by British entrepreneurs Michael Kingshott and John Ullmann with Hong Kong accountant Paul Chow, believes multi-national drinks groups are hindered by ‘complex regulations, diverse distribution networks, widely scattered consumer demands centres and a diverse range of local taste preferences’. The company is establishing a ‘more efficient’ and ‘international standard’ platform to import and distribute brands throughout the most populous and affluent areas of China.

Arriving on the market last November at 29p, having bought established Shanghai distribution outfit Panda for £1m and canning and bottling facility Vitality for £400,000 in shares, it added another two more distributors, one in Chengdu and another in Shanghai, in January. Chairman Kingshott, who has ‘been in China for six years’, explains that the Chengdu deal has added a ‘virtual monopoly’ in the coconut juice market in South China.

ADSL, which has also set up its own ‘wine mall’ to sell to trade and small retailers, has agreements to supply labels such as Tiger and Heineken beer, Cadbury Schweppes’ Snapple fruit drinks, and wines from certain US and Chile vineyards. Kingshott says the profits of the distribution businesses will be transformed by the introduction of these brands as well as ADSL’s supply agreements with domestic and international supermarket chains, such as Wal-Mart and Carrefour.

Currently looking to raise funds of between £1m and £2m, Kingshott promises further acquisitions ‘soon’ and, with experienced China hands on the ground, the strategy has promise, although the shares are for speculators only for now.

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Asia Distribution Solutions	AIM	£7.67m	24.00p	12.00p
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Asia Distribution Solutions			15/02/2008
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