SBS Philippines buys Coca-Cola’s warehouse

SBS PHILIPPINES Corp. is taking over a warehouse facility owned by a subsidiary of multinational beverage giant The Coca- Cola Corp. to improve its distribution capability and generate gains from operational enhancements and diversification of income streams.

SBS, in a disclosure to the stock exchange, said its subsidiary Lence Holdings Corp. (LHC) entered into a binding commitment with The CocaCola Export Corp. ( TCCEC)-Philippine Branch for the acquisition of warehouse facilities and property lot at the Silangan Industrial Park in Calamba, Laguna for P520 million.

The deal, expected to close this month, involves a 4.7-hectare warehouse facility complex with ambient and cold storage facilities, machinery and other building improvements.

SBS will use the property for its warehouse and distribution operations that will serve as a key distribution hub for regional market customers south of Metro Manila.

“(T)he south depot will allow greater opportunities for customers cut down on their logistics and sourcing organization, integrate the Corporation’s procurement and logistic capabilities in their business processes, and promote collaborations for supply chain optimization to simplify their operations,” SBS said.

The logistics facility presents a good investment opportunity to broaden its asset base, the company said, noting that it can also lease or use the other areas for additional business building projects of the group.

To facilitate the transaction, LHC entered into a share purchase agreement with TCCEC — a Delaware-registered company licensed to do business in the Philippines as a branch and the Bank of the Philippine Islands in trust for the Coca-Cola Affiliated Companies in the Philippines Retirement Plan — for the purchase of 100% interests in Benesale Land, Inc. (BLI).

BLI owns the parcel of land on which the facility is located. LHC separately entered into an asset purchase agreement with TCCEC for the assets within the property.

LHC, which was incorporated in November, is 65% owned by SBS. SBS Holdings and Enterprises Corp. controls 25% and the Sytengco family holds the remaining 10%.

A chemical trader and distributor, SBS diversified into the property and investments business last year to offset some of the fluctuations in the chemical trading business and, at the same time, provide a new income source for the company.

Shares in SBS added 18 centavos or 3.21% to close at P5.78 apiece on Wednesday.