Warehouse giant welcomes chance to grow, participate

In May 2017, the Liverpool-based warehousing company Henry Bath challenged its 70 employees to maximize the amount of walking they do each day.

The workforce took up the challenge enthusiastically, and, within two months, had racked up combined steps of 9,200 kilometers－equivalent to the distance from Liverpool to Shanghai.

The Henry Bath team was competing with a team of the same size at its parent company, China Materials Storage and Transportation Development Company.

The Chinese team matched their United Kingdom counterparts.

The team-building challenges were not just fun, and great ways to promote fitness and interaction between colleagues, they were also ways for the employees to understand from first-hand experience the physical distance of the Belt and Road trade route that has the UK at one end and China at the other.

"Our employees loved it. We helped our employees to reflect on how the Belt and Road grows international connectivity, while doing something to get fit," said Graham Hawkins, CEO of Henry Bath.

Henry Bath, a British company with 223 years of history, experienced a major internationalization boost in 2016, when China's biggest warehousing company, CMST, paid $60 million for a 51 percent stake in the company. The remaining 49 percent of Henry Bath stays with its previous owner, the Geneva-based Mercuria Energy Trading.

In the same year, Henry Bath, CMST, Mercuria and the London Metal Exchange signed an agreement to develop new warehouses in countries within the area covered by the Belt and Road Initiative, so metals traded across the region can be stored.

CMST will invest in the new warehouses, which will carry the Henry Bath brand.

The London Metal Exchange, which is also known as LME, will certify the warehouses, offering a stamp of approval that shows confidence in their quality and security.

"Over time, infrastructure investment into countries along the Belt and Road will drive economic growth and demand for metals," Hawkins said. "Infrastructure connectivity also makes the process of transporting metals in and out of these Belt and Road countries easier. Those are key factors behind our strategy to invest in new warehouses in Belt and Road countries."

Henry Bath is the fifth largest holder of total metal volume traded on the LME. It is one of LME's founding members, and in 1883, issued the first-ever LME warrant, which effectively allows the owner of a batch of metal to go to a warehouse to inspect their metal.

What made Henry Bath an attractive investment target for CMST is both its established brand and its international network of around 60 warehouses across 17 cities globally.

Some of these warehouses are located in countries in the Belt and Road area, including Malaysia, Singapore and South Korea.

In March, CMST and Henry Bath will together open a new warehouse in Shanghai, which supports China's growing commodities trade with economies in the Belt and Road area.

Aside from metals, the new Shanghai warehouse will house cocoa beans, which Chinese traders typically buy from African countries including Ghana and Nigeria.

Henry Bath worked out the best way to transport, pack, store and maintain cocoa after perfecting the techniques at its warehouses in Rotterdam and Antwerp.

It is teaching CMST what it knows.

"We've decided to focus on cocoa, in the expectation that Chinese chocolate makers' demand for cocoa beans will grow as the Chinese consumers become increasingly wealthy," Hawkins said.

Hawkins, who has worked in the commodities market for more than two decades, said he sees the B&R Initiative as the next big driver for the industry.

"Commodities trade is, by nature, a global business, and trade along the Belt and Road will, in time, grow. That's why we are preparing ourselves early, to make the most of the opportunities," he said.