International Container to start logistics JV with Prime Alta
International Container [ICT 183.00 unch] [link], the port operator owned by Enrique Razon, disclosed that its board has voted to approve a joint venture with Prime Alta to “operate, engage in and carry on the business of domestic and international ocean, air and land freight forwarding and logistics”.
The JV partners intend to call the new company Fortune Logistics Corp (Fortune). ICT will own 51% of the shares, with Prime Alta holding the remaining 49%.
ICT said that it intends to use Fortune to “reduce costs” and “improve operational efficiency” related to the “processing of cargo” at ICT ports in the Philippines.
MB BOTTOM-LINE
That’s a pretty wide mandate for Fortune that could encompass everything from international ocean freight to last-mile delivery.
My feeling is that this is ICT’s attempt to capture some downstream value for services that occur after the cargo enters the country through one of ICT’s many ports.
Fortune could be an in-house, value-added service offered to clients to move products and cargo out of ICT ports and into other warehouses or destinations across the country.
As more clients opt-in to this service, it might also give ICT a greater degree of control over the movement of goods in and around its ports, which could potentially reduce congestion and other challenges that have pinched the flow of containers through ICT’s ports in the past few years.
I think this move is interesting, but as you can see from my naked speculation, we need a lot more information about FLC to get a better idea of the intended depth/breadth of Fortune's potential footprint in the local logistics space.
--
Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
- Latest
