SHANGHAI: Dutch postal services group TNT announced yesterday it will focus on express and postal services in China after it agreed to sell its logistics arm.

The company agreed on August 23 to sell its logistics unit to Apollo Management, a US-based investment fund company, for US$1.9 billion. But the company will keep the night delivery service and freight management business of its former logistics unit, potentially integrating them both into its express division.

"The deal will enable TNT to integrate its efforts in express and postal services. It also reduces the complexity of our business in China to sharpen our competitive edge in the rapidly developing market," the company said yesterday.

"The express and postal business will generate more revenue than the logistics business for TNT," said Chen Yanhong, an analyst with InterConsulting, a Shanghai-based consulting firm. "After TNT sells its logistics services it will become more focused on its core business including the express and mail service in China."

TNT CEO Peter Bakker said in a statement that TNT was strongly committed to China.

"TNT aims to establish China as the second home market after Europe," said a TNT China spokesperson who preferred not to be named.

TNT China, with its regional headquarters in Shanghai, already operates in around 500 Chinese cities with 4,600 employees.

The company also announced a significant change in its management in Asia yesterday to facilitate further expansion in the region.

Michael Drake, the current regional managing director of TNT Southeast Asia, will take charge of TNT's business in China on September 8.

Ken McCall, the current chief executive officer of TNT China, will be promoted to monitor the company's Asia business.

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