Conglomerate JG Summit Holdings, Inc. (JGSHI), global logistics company Deutsche Post Beteiligungen Holding GMBH (DHL), and ACCRAIN Holdings Corporation have signed a joint venture agreement (JVA) to invest P60 million in the creation of a new transportation and logistics company.
The joint venture corporation, to be named DHL Summit Solutions, Inc. (DSSI), will enter the business of providing domestic transportation, logistics, warehousing and distribution of cargoes, and other supply chain management activities.
DSSI is expected to start commercial operations in June 2020, JGSHI said in a disclosure to the Philippine Stock Exchange.
JGHSI said the collaboration combines the three parties’ experience, vision and financial capability to “bringing together local market and international expertise, with the aim of improving transport and supply chain efficiency and customer experience in the Philippines.”
“The Philippines economy is expected to grow by 6% year-on-year and businesses will need to invest in world-class logistics and warehousing services to stay ahead of the competition,” JGSHI president and CEO Lance Gokongwei said in a statement.
“With our diverse business portfolios and local networks, we are committed to help homegrown and international companies in the Philippines achieve their next phase of growth. Working with DHL is the ideal move for us, as we leverage their global footprint and tap onto their expert knowledge to provide integrated industry-leading services,” Gokongwei added.
DHL Supply Chain Asia Pacific CEO Terry Ryan, for his part, said: “We are seeing greater investment by the government on 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. Our global network and local expertise puts us in good stead as the most reliable logistics partner they need, to fully capitalize on the market opportunities.”
Profit sharing will be according to the shareholding of each party. DSSI will be managed by a board of directors composed of five members, with JGSHI and DHL each nominating two directors, and ACCRAIN nominating one director.
The joint venture is subject to the board approvals of JGSHI, DHL and ACCRAIN, and the execution by the parties of the share subscription and shareholders’ agreements, and other related transaction documents.
