UAE group ramps up PH logistics expansion

LuLu Group International, a diversified firm based in United Arab Emirates (UAE), is investing $100 million this year for its expansion in the Philippines and committed to ramp up to $100 million in purchases of local food and merchandize over the next two years for the export market.

LuLu Group Chairman Yusuff Ali Ma told reporters at the inauguration of its logistics and export center under its local subsidiary MAY Exports Philippines, Inc. in Calamba Premier International Park that the $100-million initial investment already includes its logistics and export center and its expansion into retail as the company also intends to put up LuLu supermarkets in the country.

Charito B. Plaza, director-general of the Philippine Economic Zone Authority (PEZA), said that LuLu’s local subsidiary MAY Exports has been approved by PEZA with investment of 152 million ($1 million) for its logistics and export center.

For its local purchases, Yusuff Ali also tasked his local team to fulfill his directive to ramp up procurement to $100 million in two years.

At present, LuLu has been importing Philippine goods, which find their way into the LuLu chain of supermarkets in 151 stores in various countries, including the Middle East countries, India, Indonesia and Malaysia, among others.

LuLu’s annual local sourcing from the Philippines has been steadily increasing, reaching between $25 million to $35 million annually.

With the group’s increasing importation, Yusuff Ali finds it practical to set up a logistics and export facility for its local procurement.

The entire LuLu network has employed 8,000 overseas Filipino workers.

In approving the project, Plaza said that LuLu was granted four years of income tax holiday and duty-free importation of capital equipment. The company will also be entitled to 5 percent tax on gross income earned after the four year ITH.

“As a registered export enterprise, LuLu will buy Philippine products particularly food to supply its chain of Kuku supermarkets in the Middle East, India, and Malaysia,” she said.

In addition to the logistics and export center and retail expansion, Plaza said that LuLu is also expected to invest in an agro industrial zone and halal hub most probably in Mindanao.

Since this would require huge track of lands, running to more than a thousand for crop production and food processing, the economic zone and halal hub maybe located in the ancestral domains in Mindanao.

Plaza said the LuLu Group will make a decision once PEZA has already identified the ecozone location.