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By Arra B. Francia
THE logistics unit of Metro Pacific Investments Corp. (MPIC) hopes to break even this year, as it continues its expansion to become a leading player in the country.
The listed infrastructure conglomerate said that its logistics and systems group, which includes MetroPac Movers, Inc. (MMI), recorded a net loss of P642 million in 2018.
“They’re targeting to break even this year, so maybe next year they can be profitable,” MPIC President and Chief Executive Officer Jose Maria K. Lim told BusinessWorld on the sidelines of the company’s press briefing last week.
“At this time it’s still generating losses because it’s already building up it’s organization for full service but it hasn’t got enough contracts to sustain their bottomline.”
MPIC initially entered the logistics sector in 2016, when it acquired the assets of midsized corporate logistics provider Basic Logistics. MMI was established in partnership with the shareholders of Basic Logistics to provide shipping, freight forwarding and e-commerce services.
MMI has since acquired more than 400,000 square meters (sq.m.) of land in Cavite and Bulacan, which will be developed into covered warehouse spaces.
Mr. Lim said during a press briefing last week that MMI has increased its clients to 70 accounts from just six when they started out. These clients are mostly in the fast-moving consumer goods sector.
The logistics unit reported that average warehouse dispatch climbed by 3% to 60.2 million cases in 2018, as it focused on increasing its clients and broadening its services.
MMI’s strategy includes the construction of mega distribution centers and having a trucking fleet to support them.
“That would include cold storage capability. They’re midway through the strategy to get a larger chunk of the business from their existing clients,” Mr. Lim said.
“Because clearly the margins in that business are very competitive. They need to get a larger share to make it worthwhile for them,” he added.
While MMI’s operations are currently centered in Luzon, Mr. Lim said they would also like to expand to Mindanao. The company earlier said it is studying plans to purchase a 10-hectare lot in Davao City.
MPIC has also been expanding its logistics unit by acquiring existing firms, such as Ace Logistics in 2017 and Air21 in 2018.
The conglomerate booked a core net income of P15.1 billion in 2018, seven percent higher than the P14.1 billion it generated in the previous year. It attributed the increase to its expanded power portfolio alongside steady volumes from its toll road and water businesses.
MPIC is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being PLDT, Inc. and Philex Mining Corp. Hastings Holdings, Inc. — a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc. — maintains interest in BusinessWorld through the Philippine Star Group, which it controls.