Cebu-based Chiongbian group’s Fast Logistics has forayed into the cold-chain business, sinking in some P500 million in investments in what it called an intelligent cold-chain facility in the northern part of Cebu province to serve meat producers, farmers and pharmaceutical companies.
William B. Chiongbian II, president and CEO of Fast Logistics, said the facility, called Fast Coldchain Hub, will have more than 10,000 pallet positions to serve fresh meat processors, importers, local producers, fruits and vegetable retailers, quick service restaurants, pharmaceuticals and vaccines and even those in e-commerce.
Chiongbian said the company designed the facility to serve the needs of both small and medium enterprises as well as big firms.
The said launching follows its July announcement for a rented cold-chain hub in Cavite for Luzon cold chain requirements.
“These two hubs, plus the ones we manage for our principals, will bring our cold-chain footprint to at least 30,000 pallet positions. This is an expansion to our warehouse management footprint of more than 1.2 million square meters for dry storage. We’re studying several other sites to realize the vision of a leading presence in cold chain nationwide,” Chiongbian said.
His grandfather, William Chiongbian, was the “W” in the defunct WGA Shipping lines, famous in the 80s through the 90s for the operation of roll-on/roll-off passenger and cargo vessels.
The younger Chiongbian, however, said the company may not return in the operation of running its own shipping vessels, but it may expand deeper into the logistics business, mainly on last mile deliveries and may go to national operations.
“We are considering an IPO [initial public offering] but not in the immediate future. Proceeds of which will support the expansion of our logistics business,” he said.
The company’s goal, Chiongbian said, is to reach 100,000 pallet positions maybe in about two years. It may spend about P2 billion for its expansion plans as it wants to put up one to two more cold-chain facilities in Luzon, two in Mindanao and two more in the Visayas, one each for the eastern and western part.
“Over the last 10 years, our group has served the cold-storage requirements of some of our principals in ice cream, fast-food chain and pharmaceuticals. But the idea of getting into the cold chain in a bigger way was first conceived a few years ago. And at that time, it seemed to us in Fast as the next logical thing to do,” he said.
Anthony Dizon, president of Cold Chain Association of the Philippines, said the cold-chain industry will continue to grow nationwide at a rate of 8 percent to 10 percent annually over the next five years, largely driven by population growth, shifting consumer preferences for frozen products and access to regional export markets with the opening of the Asean economic community. Dizon said that at the moment, the industry has about a capacity of 550,000 pallet positions or about 550,000 tons.
“The uncertainties of the situation we have been in for almost two years have brought about observable changes in the supply chain landscape which have had significant effects among the stakeholders in the food industry, from manufacturing to logistics and distribution,” he said.