BUSINESSMAN Lucio Co’s retail holding company Cosco Capital Inc. is allotting P7.2 billion for capital expenditures (capex) this year for the expansion of its supermarket, liquefied petroleum gas (LPG) and real-estate businesses.
In an interview after the firm’s annual stockholders’ meeting, Cosco President Leonardo Dayao said the biggest share of the capex, amounting to P3.25 billion, will go to Liquigaz as it expand its facilities to maintain its position as the second-largest LPG retailer in the country.
Supermarket operator Puregold Price Club Inc. will invest P2.6 billion for the expansion of its various brands, P1.3 billion will be spent by Cosco’s real-estate units, while Office Warehouse will be spending P60 million.
Dayao said Liquigaz will spend P300 million to acquire gas-refilling stations, adding that margins are better at the downstream of the LPG business, while profits are smaller when they sell wholesale to refillers.
“Liquigaz will also buy new gas cylinders worth P200 million, rehabilitate a storage tank for P500 million; build a new storage tank for P1.5 billion; and construct a new jetty for P750 million,” he said.
Dayao said the new jetty and storage tanks will be in Sariaya, Quezon, for them to better serve Southern Luzon, since it takes a lot of time and costs more to transport LPG from Bataan to this area.
The Sariaya jetty and rehabilitated storage tank will be operational within the year, while the new storage tank will be completed by 2017, Dayao said.
Puregold will be spending P1 billion to put up 25 stores; P1 billion for two S&R Memberships stores; P150 million for 10 S&R quick-service restaurants; and P450 million for 75 Lawson convenience stores, Puregold Vice President for Investor Relations John Marson Hao said.
The two new S&R branches will be opened within the year in Iloilo and Cagayan de Oro cities.
S&R is planning to open two stores a year with the aim of having 20 stores by 2020, from the current 10.
Dayao said they will be opening more S&R branches both in Metro Manila and the provinces, noting that Greater Metro Manila remains underserved, and they are, thus, scouting for new locations “with sizable upscale consumers.”
For Cosco’s real-estate business, Dayao said they will be spending P1.1 billion for new Cosco malls, while allotting P200 million for the rehabilitation and expansion of recently acquired malls.