SBS Philippines Corp., a chemical trader led by the Sytengco Group, on Monday said it will add new warehouse facilities to expand its inventory of food ingredient products.
In its disclosure, the company said it will use part of the P588.77-million gain from the sale of its unit, Lence Holdings Corp., to develop additional warehouses for its growing food ingredient raw material product line and to meet increasing demand for Halal certified logistics and distribution facility. “This development is also aligned with the direction of SBS to improve operational efficiency by constructing the new facilities in its head office located in Quezon City,” the company said. The first warehouse will feature a multi-level racking system with a capacity of up to 1,800 pallet location, SBS said.
The said facility will be outfitted with semi-automated shuttle carts to improve operational efficiency by capitalizing on technology.
SBS had disposed of its 65-percent stake in loss-making unit Lence Holdings, a company that has warehouse facilities in the southern part of Metro Manila. It sold the company to Royal Cargo Inc. for P585.03 million. “The sale of Lence shares will result in substantial cash flow to the company and sales proceeds will be used for its investment in warehouse expansion within Metro Manila for improved operational efficiency, installation of solar energy source for its operation and reduction of outstanding debt,” SBS said in its previous disclosure.
In 2017, SBS formed Lence, which was supposed to serve as the acquisition vehicle for the investment in warehouse facility complex.
Lence, which has been reporting losses, is a holding company with investment assets consisting of buildings, improvements and machineries. It also owned subsidiary Benesale Land Inc., which has no operations other than owning a 4.7-hectare parcel of land at Silangan Industrial Park on which the facility is located.
“Management considered it to be appropriate time to divest and sell its shareholdings in Lence Holdings Corp. to unlock the share’s maximum value and realize a gain from the transaction. The divestment is aligned with company’s direction to improve operational efficiency through expansion of additional warehouses in its head office located in Quezon City, instead of developing Lence’s property,” SBS said.
SBS reported a net loss of P20.8 million in the first quarter, a reversal of last year’s profit of P6.4 million.