Biz Buzz: Four Bs: Booming big bike business

BIZ BUZZ

It’s no surprise that vehicle sales in the Philippines were down last year, no thanks to the record-breaking economic contraction caused by the COVID-19 pandemic.

And it’s no surprise, too, that this year is a challenging one for these same vehicle manufacturers and sellers, not just here, but all over the world.

But wait. There’s one sector that seems to have defied this malaise.

Biz Buzz learned recently that the small niche sector of luxury big bikes has done exceptionally well in 2020, even at the height of the public health crisis.

In fact, the chief of one of the largest distributors of highend motorcycles in the country says the entire industry is experiencing an unprecedented boom because of the pandemic. Say what?

That’s right. Luxury motorcycles—which sell from anywhere between P300,000 for the entry level models to around P2.5 million for the most exotic ones—are hot commodities nowadays, even as the broader motorcycle industry in the Philippines recorded its first sales decline in seven years in 2020.

Note that the de facto industry group called Motorcycle Development Program Participants Association Inc. said that sales were down 33 percent at end-September of 2020, and that they were expecting to see a 30-percent decline by the end of the year.

That means only around 940,000 motorcycles were sold in the country last year, compared to the 1.4 million units in 2019, amid the long lockdown imposed by government in a bid to ward off the pandemic.

But those numbers don’t apply to luxury big bikes. Our source says the local industry’s sales for this niche market grew by anywhere between 10 percent and 12 percent as a conservative estimate.

These players include the likes of Ducati, Triumph, Harley Davidson and BMW Motorrad.

BMW Motorrad, in particular, had a banner year with sales growth in 2020 far outstripping the previous year’s number of units sold despite being open for business for only a few months because of the lockdown.

The publicity shy firm is keeping its sales numbers secret, but suffice it to say that head honchos Ramon Ang and Spencer Yu and the company’s execs back in Germany are very happy with last year’s record-breaking performance.

More importantly, many of these big bike owners gas up at Petron stations where many biker groups assemble before heading out on their weekend out of town trips. Talk about having a win-win situation, eh? — DAXIM L. LUCAS

Onboard Monde Nissin

After recently retiring as long-time chief financial officer (CFO) of infrastructure holding firm Metro Pacific Investments Corp. (MPIC), Australian expat David Nicol, 61, has joined the board of a Philippine multinational firm that will soon go public.

We are talking about food manufacturing giant Monde Nissin Corp., which is planning to sell as much as P72.45 billion worth of shares through an initial public offering (P63 billion of which will comprise primary shares), which could be the largest in local stock market history.

At the maximum price of P17.50 per share, the company behind food brands such as Lucky Me! noodles, Skyflakes crackers, Fita crackers, Monde baked goods and Quorn meatfree products will have a market capitalization of about P314 billion—bigger than Universal Robina Corp.’s P289 billion, but smaller than San Miguel Food and Beverage’s P394.15 billion. It will be more valuable than some of the companies that currently form part of the Philippine Stock Exchange index.

As to whether the valuation is justified, it’s up to arrangers UBS, Citi, Credit Suisse, JP Morgan, BDO Capital, BPI Capital and First Metro Investment Corp. to convince the market.

Nicol is no stranger to the food and beverage business, having previously served as CEO and chief financial officer of Thai conglomerate Berli Jucker PCL.

During his tenure as CFO of MPIC, Nicol received recognitions and awards from various parties including Finance Asia, Institutional Investor and Corporate Governance Asia. Following his retirement last Nov. 30, he also agreed to remain advisor to the board for the next 12 months to ensure a smooth transition of management.

Meanwhile, Monde Nissin will have Delfin Lazaro, Nina Perpetua Aguas and Elaine Teo as independent directors.

Lazaro is a well-respected businessman who sits on the board of a number of companies, including Ayala-led firms such as Ayala Corp., IMI, Globe Telecom and Manila Water. He was formerly CEO of Globe Telecom.

Before becoming the first woman CEO of Insular Life, veteran banker Aguas was a trailblazing executive. She was the first female country manager at Citibank Philippines and first female managing director at ANZ Retail Bank and then later Private Bank in Asia Pacific.

Teo, a capital market veteran, is a director of Mapletree Investments Pte Ltd. She previously chaired Capital International Research Group and was managing director of Capital International Inc. Asia.

INQ