Philippine conglomerate Metro Pacific Investments Corporation (MPIC) is entering the logistics business through a joint venture company and making an initial investment of P2 billion.
MPIC is partnering with Pasig-based Basic Logistics Corporation to form a joint venture company called MetroPac Movers, Inc. (MPMI) that will provide logistics, shipping, freight forwarding, and e-commerce services, MPIC president Manuel Pangilinan said in a briefing on May 4.
MPIC will initially own a 76% interest in MPMI, but will eventually trim it down to 51% once the foreign partner enters the joint venture. Basic Logistics will hold the remaining 24% and will continue to manage the business.
The initial investment will be expanded to P5 billion over the next five years to beef up Basic Logistic’s land transportation fleet and warehousing capacity.
Pangilinan said the deal was set to be completed last week.
In a disclosure to the Philippine Stock Exchange (PSE), MPIC said “the execution of the transaction with Basic Logistics Corp. and its related entities is subject to completion of certain conditions precedent, including the assignment of certain contracts in consultation with key customers, which are still in the process of being fulfilled.”
Pangilinan noted the strong demand for logistics services in the country, as the geography of the Philippines requires “very good logistics.” He added that the industry is “less regulated” compared to tollways and water services, which the group is also into.
However, he acknowledged the intricacies of the logistics industry, noting that Basic Logistics will be MPIC’s core investment into it.
“In a way it will be an (educational) journey for us to learn about the intricacies of the logistics and distribution business because it is a fairly complex business,” Pangilinan added.
Moreover, he said the logistics operations will address the requirements of MPIC’s other businesses such as Manila Electric Co. and Philippine Long Distance Telephone Co.
