Chelsea logistics sees growth in shipping business

Chelsea Logistics Corp.(CLC), a unit of the Udenna group of Davao businessman Dennis Uy, is optimistic about the prospects of the local shipping industry and intends to continue investing to take advantage of this growth.

"With a lot of islands, we really need to move from one place to another. And not everyone can afford to fly, so that's a growth area," said Dennis Uy, Chelsea Logistics chairman.

Uy said the industry's growth is anchored by the strong fundamentals of the economy that has been posting consistent growth in the past several years.

"There is growth. Seven percent a year in the past five years," Uy noted, as he revealed plans to "right-size" and "modernize" the company's fleet of ships, specially after it has acquired a stake in listed logistics firm 2Go, Inc.

Last Thursday, Chelsea Logistics formally signed a $220-million bridge loan with the Bank of China, as it works toward a bigger role in the country’s transportation and logistics industry and subsequently in the economy.

Bank of China granted the loan under the initial $3-billion financing package it committed, during the state visit of President Rodrigo R. Duterte to China in October last year, to help sustain the Philippine economy’s growth.

“We look forward to investing more in the development of infrastructure and other strategically important industries in the Philippines to further unlock the potential of the economy,” Bank of China Country Head Deng Jun said.

CLC earmarked proceeds from the bridge loan for its acquisition of a substantial stake in publicly listed integrated transport solutions provider 2GO Group, Inc. through an affiliate.

“Efficient shipping and logistics are a key component to creating a globally competitive economy. We believe that synergies between Udenna and 2GO will bring together a stronger and more efficient shipping and logistics industry for the country," Deng said.

“Our investment in 2GO aligns with our commitment to contributing to our economy’s growth story by facilitating more efficient trading within and outside the archipelago,” Uy said.

CLC continues to expand organically and through other acquisitions to become the prime mover of goods and passengers in the Philippines. It looks to raise R8 billion from an initial public offering of shares.

The company has become the country’s largest shipping group since starting its business through Chelsea Shipping Corp. to support the operations of affiliate Phoenix Petroleum Philippines, Inc. in 2006.