AYALA Corp. is dreaming to become one of the country’s leaders in logistics, after the acquisition of the last-mile delivery system of Zalora and transform it into a full-service courier and freight-forwarding firm.
Jose Teodoro K. Limcaoco, Ayala’s chief finance officer, said the logistics firm called Entrego will start accepting clients outside of Zalora, such as Ayala-led firms Globe Telecom Inc., the country’s second-largest telecom company, and lender Bank of the Philippine Islands.
“Hopefully, it should be one of the leading three players in the country. That’s the ambition. Entrego not only looks at last mile, but they’ll do contract logistics. They’ll do fulfillment and everything else. The full logistics value chain,” Limcaoco said at the sidelines of the Aboitiz Foundation Inc.’s summit on corporate social responsibility.
Incidentally, the Abotiz family once owned 2Go Group Inc., a local logistics firm that competed with the local courier arms of Germany’s DHL group and US firm FedEx Corp.
2Go, alongside with the entire fleet of roll-on, roll off vessels and logistics business of the Aboitiz family, was bought by Negros Navigation Co. led by businessman Sulficio O. Tagud in 2008.
Less than a decade later last year, 2Go was sold to Davao businessman Dennis Uy, while the SM group bought in a 35-percent stake.
At the moment, the local arms of DHL and FedEx still lorded the logistics industry in the Philippines, while freight forwarding is composed of several other smaller players.
“We think it’s the industry that needs to be transformed. We think it’s an industry the country needs, and we think that’s an industry with a lot of potential and underserved issues,” Limcaoco said.
“The country has 7,100 islands. You need a logistics business to thrive. Logistics are important at any local economy. You need very good logistics. This is an industry ripe for disruption that I’m sure the other conglomerates also see,” he said.
Entrego, established in 2013, was carved out of Zalora Philippines, their in-house logistics platform.
Last month Ayala, through its wholly owned unit AC Infrastructure Holdings Corp. formed a holding company with German firms Brilliant 1257 GmbH and Co. and Vierte Verwaltungs Kg for this logistics venture.
Ayala owns 60 percent of the venture, with the rest by its partners. Brilliant is an affiliate of Zalora.
Limcaoco did not divulge the company’s investments in Entrego.
“If you think about it, the success of the logistics business, especially last mile, is about improving delivery density. The more you can deliver in a certain area, the better. We hope Zalora already provides another density. But we have external clients who are part of the Entrego platform already,” Limcaoco said.
Ayala is playing catch-up in the logistics business. The group of Metro Pacific Investment Corp. has already invested in its own logistics business, buying warehouse facilities and new delivery trucks as it expands its operations nationwide.