MVP eyes majority stake in Air21

MANILA, Philippines -  The MVP Group wants a majority stake in Air21 as it sees the highly lucrative and less regulated logistics industry as the emerging battlefront among conglomerates.

 “As in most of our acquisitions, we’d like a majority stake,” a source within the group of tycoon Manuel V. Pangilinan said over the weekend.

In a separate briefing on Friday, Metro Pacific Investments Corp. (MPIC), the Pangilinan-led infrastructure and tollways conglomerate, said the acquisition process is still ongoing.

“We are now in the middle of due diligence,” MPIC president and CEO Jose Ma. Lim said.

MPIC has informed the Philippine Competition Commission (PCC) of the planned acquisition which industry sources said would run in “billions of pesos.”

Lim said aside from Air21, MPIC is looking at other logistics companies which it can acquire.

“There are other discussions,” he said.

Having Air21 in its portfolio would enable MPIC to have a last-mile company, which refers to a service provider that is able to bring goods to their final destination.

This last leg of the supply chain is often the most tedious and less efficient and comprises 30 percent of the total cost to move goods.

In May last  year,  MPIC  through MetroPac Movers Inc. (MMI) made its foray in logistics and invested P2.2 billion to acquire the business and assets of a group of logistics service providers including Basic Logistics Inc., a local mid-sized company.

Earlier this year, MMI announced it signed an agreement to acquire certain assets and business of Ace Logistics Inc. (Ace) for P280 million.

When asked if MPIC also wants to expand in the logistics business in the region, Pangilinan said the group is still learning the ropes and intends to focus on the country first before considering an overseas expansion.

“At this time we will focus first on the Philippines. We’re learning the business,” he said.

Lim said the conglomerate’s plan for logistics is continuously being refined. “We’re taking a wider look on the dimensions of this industry, both in terms of where we want to focus on – verticals or customer focused or whether we want to focus on the different parts of the supply chain,” he said.

“We’re trying to complete the picture as to what kind of resources are needed,” he added.

Lim said it’s difficult to say how much the investment would be because they are still trying to identify the opportunities.

“The more complex the logistics arrangement are, the higher the value,” he said, adding that they are hiring consultants to help them identify where the opportunities lie both in terms of the industry they need to serve and the supply chain components.

MPIC said in May it has raised its spending plan for its logistics business to P8 billion over the next two years from P5 billion previously but this may now change, depending on the opportunities they would identify.

What is certain, Pangilinan said, is that a more efficient logistics system translates to cost savings for companies.

“And there are other reasons why companies would like to have an efficient logistics system including simple customer experience. If customers know that these products will be delivered on time, customer experience is different. You can have a larger market or have new markets,” Lim said.