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Logistics provider AAI to sell ‘minority’ stake

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AAI Worldwide Logistics
http://www.aai.com.ph/

By Krista Angela M. Montealegre, National Correspondent

LOGISTICS solutions provider AAI Group of Companies is taking in a strategic investor to fund an aggressive expansion program aimed at riding the e-commerce wave ahead of a possible initial public offering (IPO) by 2020.

In a briefing late Thursday in Makati City, AAI Worldwide Logistics, Inc. President Arnie R. Brizuela said the group is in talks with a private equity firm for capital infusion and a Filipino strategic partner that will generate synergies for the business for the sale of a “meaningful minority” stake in the holding company this year.

Proceeds from the share sale will enable its new courier unit Black Arrow Express to scale up and boost its share of revenues to 50% by 2020 when revenues would have ballooned to P12 billion from the current P2 billion.

“We’re playing catch up so we have to focus,” AAI Group Chairman Rico V. Brizuela said.

The expansion of AAI Group comes at a time when competition in the highly fragmented logistics sector is heating up, as conglomerates like SM Investments Corp., Metro Pacific Investments Corp. and Ayala Corp. venture into this space.

Even Chelsea Logistics Holdings Corp. of businessman Dennis A. Uy, who has teamed up with SM to wrest control of 2GO Group, Inc., went public in August to beef up its war chest.

The entry of an investor will allow AAI Group to accelerate its expansion, setting the stage for its listing in the local bourse by 2020, or even earlier, through an IPO of as much as P5 billion, the company’s chairman said.

By that time, AAI Group wants Black Arrow Express to be “number one in logistics,” and “match or surpass” LBC Holdings, Inc. as the household name in courier services. Black Arrow handles an average of 17,000 transactions per day compared to the 150,000 transactions of LBC.

“It’s not bad to dream,” the younger Brizuela said.

Black Arrow Express has been operating for only 18 months, but now accounts for 30% of AAI Group’s business. Bulk of the revenues still comes from the traditional freight-forwarding business under AAI Worldwide, but that is expected to change given the rapid growth of e-commerce.

“How we see it, that is the future of the business,” the younger Brizuela said.

Black Arrow Express reached its millionth delivery this July, with more than 97% of its volumes coming from e-commerce. It is on its way to hit the three millionth delivery milestone by the end of the year.

Black Arrow Express offers clients “same day, next day” delivery fulfillment using its mixed fleet of motorcycles, vans and trucks. Its clients include Shopee, ABS-CBN TV Plus, Bench Online, among others.

Aside from Black Arrow Express, AAI+Peers will be one of the key pillars of the group with its services for moving large scale equipment such as specialty rigging and cranes seen benefiting from the government’s infrastructure push.

AAI Group offers the full range of logistics solutions from large-size and volume shipments, storage and handling, all the way to retail express delivery across the Philippines.