JG Summit Holdings, Inc. is building a logistics business that’s worth P60-million through a joint venture. A unit of Deutsche Post DHL Group, a known global courier, will be involved in the making. As per the company, the joint venture agreement with Deutsche Post Beteiligungen Holding GmbH and a local firm ACCRAIN Holdings Corporation has been signed and is going to form DHL Summit Solutions, Inc. This is the first attempt of JG Summit to enter into logistics. Well, as far as logistics is concerned, we may have noted a big increase in demand for transporting goods here in the Philippines. Surely, the company sees a bigger picture than just creating a new company.
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The formed corporation will provide services that include domestic transportation, warehousing, logistics, supply chain management activities, and distribution of cargoes. The disclosure also said that it will start its operations by June next year. Three different companies that are capable to bring in resources will be responsible for this—JG Summit, DHL, and ACCRAIN. It is such a good option that the collaboration will combine the experience, financial capability, and vision of these companies. JG Summit said that the collaboration will bring together local market and international expertise and it will target the improvement of transport and supply chain efficiency and customer service in the country.
Before the logistics business is totally formed, the board of JG Summit, DHL, and ACCRAIN should approve the said transactions. After that, each party will sign share subscription agreements, shareholders’ agreement, and other documents that are related to the transaction. The new corporation will be led by a five-man board of directors. Two will come from JG Summit, two from DHL, and one from ACCRAIN. These companies will nominate their directors. The profit sharing will be tailored based on the shareholdings of each company.
The Philippines is a place where logistics is expanding. JG Summit gave a statement that this new investment will play an important role in the diversification plans of the company to keep up with the growing economy of the country. The company is well-aware that the Philippine economy will grow by 6% year-on-year and businesses will need to form world-class logistics and warehousing services in order to get ahead of the competition. Bringing DHL in the group is ideal for the company as it leverages its global footprint and use its expert knowledge to provide world-class services.