Conglomerates place bets on logistics, e-commerce

Conglomerates are placing bigger bets in the lucrative and less regulated logistics and ecommerce industries as part of plans to grow even bigger.

Industry sources said some of the country’s biggest companies are eyeing a stake in existing last mile players, but officials declined to comment.

In industry parlance, a last mile company refers to a service provider that is able to bring goods to their final destination. This last leg of the supply chain is often the most tedious and less efficient and comprises 30 percent of the total cost to move goods.

The conglomerates simply said if there are opportunities, they are willing to take a look.

Metro Pacific Investments Corp. (MPIC), the tollways and infrastructure conglomerate chaired by Manuel V. Pangilinan, for instance, earlier disclosed that on top of investments already made into the logistics business, it would pour in an additional P2.5 billion over a five-year period to support growth.

“There is strong demand for logistics services and the lightly regulated sector offers the prospect of attractive returns,” MPIC said early this month.

In May last year, MPIC through MetroPac Movers Inc. (MMI) made its foray in logistics and invested P2.2 billion to acquire the business and assets of a group of logistics service providers including Basic Logistics Inc.

Earlier this year, MMI announced it signed an agreement to acquire certain assets and business of Ace Logistics Inc. (Ace) for an aggregate purchase price of P280 million.

“We are always on the lookout if there are opportunities,” MPIC director Ray Espinosa said in a chance interview.

Just recently, a holding company led by businessman Dennis Uy and other local investors have also successfully acquired a stake in the logistics company 2Go Group after months of being caught in a legal battle.

Last September, Uy’s holding company, Udenna Corp., the parent

and majority stockholder of Phoenix Petroleum Philippines Inc. obtained shares from Netherlands-based KGL Investment B.V. which owns about 60 percent of KGLINM.

KGLI-NM controls Negros Navigation Co. (Nenaco) which owns 88.31 percent of 2Go.

2Go chairman Francis Chua said aside from Uy, other local investors also bought into the fund.

Last February, during the company’s board meeting, Uy was elected as a director of 2Go, successfully gaining entry into the company. Also elected to the board were Uy’s associates Elmer Serrano, Jose Amor Morado and Joseph Tan.

Commenting on the logistics business in general, Ayala Corp. chief finance officer TG Lim- caoco said in a recent briefing the business is lucrative and is less regulated compared to other industries.

Limcaoco also said the oldest conglomerate, for its part, would remain on the lookout for opportunities in the digital and e-commerce space and could invest up to $100 million.

The Ayala Group has recently acquired a 49 percent stake in online fashion retailer Zalora Philippines.