JG Summit, 2 firms to invest P60M in JV

LISTED JG Summit Holdings Inc. and two other companies are investing P60 million in a joint venture (JV) that will engage in logistics and supply chain management.

In a disclosure on Tuesday, the Gokongwei-led conglomerate said the joint venture it planned to set up with Deutsche Post Beteiligungen

Holding GMBH (DHL) and Accrain Holdings Corp. — to be called DHL Summit Solutions Inc. (DSSI) — would also engage in domestic transportation, warehousing and cargo distribution.

DSSI would be managed by a five-man board of directors: two each from JG Summit and DHL and one from Accrain. The joint venture is expected to begin operations next June.

The “proposed joint venture is not expected to have any adverse effect on the business, financial condition and operations” of JG

Summit, it said.

“Working with DHL is the ideal move for us, as we leverage their global footprint and tap [ into] their expert knowledge to provide integrated industry-leading services,” JG Summit President and Chief Executive Officer Lance Gokongwei said.

The joint venture is seen to help enhance transport and supply chain efficiency in the country, given the expertise and financial capability of the three firms.

“We are seeing greater investment by the government [ in] enhancing infrastructure, such as setting up integrated logistics and industrial parks, and customers can count on our expertise in this aspect to serve their needs,” DHL Supply Chain-Asia Pacific CEO Terry Ryan said.

JG Summit owns Cebu Pacific operator Cebu Air Inc., which also provides cargo services.

The conglomerate saw its consolidated net earnings increase by 42.7 percent to P30.83 billion in the first nine months of 2019 from P21.6 billion in the same period last year on the back of its core businesses.

JG Summit shares climbed by 40 centavos or 0.51 percent to end at P79 each on Tuesday.