IPO-bound North Star Meat eyes network of micro-hubs
North Star Meat Merchants Inc., the largest end-to-end fresh frozen meat retailer in the country, is beefing its war chest to build a massive network of micro-hubs nationwide as it gears up for the rapid growth of the food and retail industry in a post-pandemic Philippines.
In an interview with The STAR, North Star founder and CEO Anthony Ng said it is embarking on a P4.5-billion initial public offering (IPO) to raise capital for expansion, particularly to build microhubs in future growth areas in the country.
“First, we need a war chest to run after the aggressiveness of the clients, not just the SM Group but anyone who will come along such as supermarket chains because our style is synergistic,” Ng said.
North Star operates in all SM Markets such as SM Supermarket, Hypermarket and Savemore; 7-Eleven, WalterMart and Alfamart across the Philippines, supplying frozen meat and other meat products.
Thus, the company will be present in its clients’ growth areas such as in different areas outside Metro Manila including the fast growing South Luzon area.
“The way to be prepared is to have micro-hubs. We call it micro-hubs because we are not cold storage,” he said.
North Star’s micro-hubs include a hybrid of cold storage for all the frozen meat, an area for carcasses, a pick-and-pack area and an expansive room for dispatch of new supply. Sizes may range from 5,000 square meters to two hectares.
An investment for one micro-hub can start from roughly P200 million, Ng said.
Asked how many of these micro-hubs North Star plans to put up, Ng said it would depend on where the concentration of the expansion of the company’s clients will be. One client is already looking to have 5,000 new outlets outside Metro Manila.
“We’re not there for rent. We will be there to be more efficient in serving the outlets that we already have. So it will be dependent on the direction of SM and other clients such as Alfamart, 7-Eleven, etc. Where they go, we will go,” Ng said.
On the planned initial public offering and the company’s value proposition, North Star CFO Jed Tan said, “We are a consumer essential company.”
Thus, Tan said that if one looks at other similar consumer stocks in the market, these companies are not affected even during crises with sales even going up.
Ng added that food is essential and people stock up on these products whether or not there is a crisis but especially when there is a crisis as seen during the COVID-19 pandemic.