By Denise A. Valdez, Reporter
JG SUMMIT Holdings, Inc. is forming a P60-million logistics business through a joint venture with a unit of global courier firm Deutsche Post DHL Group.
In a disclosure to the stock exchange yesterday, the Gokongwei-led conglomerate said it signed a joint venture agreement with DHL Group’s wholly-owned subsidiary Deutsche Post Beteiligungen Holding GmbH and local firm ACCRAIN Holdings Corp. to form DHL Summit Solutions, Inc.
The resulting corporation will offer services such as “domestic transportation, logistics, warehousing and distribution of cargoes, and other supply chain management activities.” It is targeted to start operations by June 2020.
“This collaboration combines the experience, vision and financial capability of (JG Summit), DHL and ACCRAIN, bringing together local market and international expertise, with the aim of improving transport and supply chain efficiency and customer experience in the Philippines,” the listed firm said.
The transaction will need to be approved by the boards of JG Summit, DHL and ACCRAIN, after which the parties must sign share subscription agreements, shareholders’ agreement and other relevant documents.
DHL Summit will be led by a five-man board of directors, where JG Summit and DHL will each nominate two directors and ACCRAIN will have one. Profit sharing will be aligned with the three companies’ shareholdings.
In a statement, JG Summit President and Chief Executive Officer Lance Y. Gokongwei said the investment is part of the company’s diversification plans to keep up with the economic growth of the country.
“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… 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,” he was quoted as saying.
Prior to the DHL partnership, JG Summit was operating cargo services through its airline unit Cebu Air, Inc.
For DHL Supply Chain’s Terry Ryan, chief executive officer in Asia Pacific, the joint venture with JG Summit is a timely investment as the Philippine government increases its spending on infrastructure projects.
“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,” he was quoted in the statement as saying.
Shares in JG Summit at the stock exchange went up 0.40 points or 0.51% to P79 each on Tuesday.