JG Summit diversifies into logistics, inks P60M venture with DHL

JG Summit Holdings Inc. is entering the logistics business under a joint venture with global logistics giant Deutsche Post Beteiligungen Holding GMBH (DHL).

JG Summit, DHL, and financial services firm ACCRAIN Holdings Corp. have signed an agreement to invest in a joint venture—DHL Summit Solutions Inc. (DSSI), the conglomerate said in a regulatory filing submitted by corporate secretary Rosalinda Rivera on Tuesday.

DHL Summit is in the business of providing domestic transportation, logistics, warehousing and distribution of cargoes, and other supply chain management activities, JG Summit said.

It is expected to start commercial operations in June 2020. The joint venture shall be managed by a board of directors composed of five members, with JG Summit and DHL each nominating two directors and ACCRAIN nominating the fifth board director.

JG Summit, DHL and ACCRAIN have agreed to invest approximately P60,000,000.00.

“This collaboration combines the experience, vision and financial capability of JGSHI, 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,” JG Summit said.

The joint venture is subject to board approvals of JG Summit, DHL and ACCRAIN and the execution of share subscription agreements, shareholders agreement. and other related transaction documents.

“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,” JG Summit president and CEO Lance Gokongwei said.

“With our diverse business portfolios and local networks, we are committed to help homegrown and international companies in the Philippines achieve their next phase of growth. 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,” Gokongwei said.

The proposed joint venture is not expected to have any adverse effect on the business, financial condition and operations of JG Summit, the Gokongwei-led conglomerate said.

“We are seeing greater investment by the government on enhancing infrastructure such as setting up integrated logistics and industrial parks, and customers can count on our expertise in this aspect to serve their needs,” said Terry Ryan, CEO of DHL Supply Chain – Asia Pacific

“Our global network and local expertise puts us in good stead as the most reliable logistics partner they need, to fully capitalize on market opportunities,” he added. —Ted Cordero/VDS, GMA News