FAST Logistics Group, a leading domestic logistics firm owned by the Chiongbian family, is setting a P2-billion capital expenditure over the next two years to support its goal to achieve a leading nationwide presence in the cold chain service sector.
William B. Chiongbian II, group president & CEO of FAST Logistics Group, revealed the investment plan at the inauguration of the company’s two new cold chain hubs in Cebu and Cavite under its brand “FRESH”.
According to Chiongbian, the company hopes to further expand its footprint in the country over the next two years with plans to establish additional one or two hubs in Luzon, two in Mindanao and one in west Visayas and another one in East Visayas. This should bring its cold storage capacity to over 100,000 pallet positions from the current 30,000 pp at 1.2 million square meters of dry storage.
Funding for the capex, Chiongbian said, is expected to come from a combination of debt and equity. He also said that a public initial offering is also part of the company’s plan to raise funds to support a nationwide service coverage. This is to support further expansion in e-commerce and last mile logistics in the country, he said.
Anthony Dizon, president of the Cold Chain Association of the Philippines, said there is still adequate cold storage capacity in urbanized areas but there is also observed need for new facilities in remote areas to unlock economic growth. Its latest study showed total cold chain capacity of 550,000 pp, equivalent to holding capacity of 500,000 tons of various food products.
For its foray in the cold chain business, the FAST Group invested P500 million for the Cebu hub while the Cavite hub is a partnership where the facility is under a lease arrangement.
Chiongbian is optimistic of its cold chain expansion, which is also seen to contribute 12 percent of the company’s total revenue.
Chiongbian, however, said there is no plan for backward integration in its logistics business into shipping operation. He stressed that the Chiongbians’ long history in the shipping business has enabled them to maintain very good relations with the shipping firms in the country. The Chiongbians have roots in Cebu where they also established their shipping business -- William Lines.
At the virtual press conference for the launch of “FRESH by Fast”, Chiongbian noted that the choice of Cebu as its first major investment in the cold chain is of no accident given their many decades of history in Cebu.
“The Group considers Cebu our home, where our businesses in shipping and logistics took root many decades past,” he said. Aside from that, he said, Cebu is growing fast where businesses are in need of cold chain facility support.
The North Cebu hub is the first intelligent cold storage facility in the country today, he said. It is an integrated facility with more than 10,000 pallet positions. It is now available to serve those who are in the business of fresh meat processors, importers, local producers, fruits and vegetable retailers, quick service restaurants, pharmaceuticals and vaccines, and even those in e-commerce. “We have designed this to be flexible so it can serve the big brands as well as the SMEs whose growth we champion,” he said.
Meantime, the FAST Cold Chain Hub Cavite will serve the Luzon cold chain requirements. The two hubs, plus the ones the FAST Group manages for its principals, will bring its total cold chain footprint to at least 30,000 pallet positions. This is an expansion brings its 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,” he said.
The end-to-end logistics and supply chain provider in the Philippines was founded by the Chiongbian Family in the 1970s. Fast has a workforce of 11,000+, spread across 53 branches nationwide, over a million square meters in warehouse footprint, and a distribution network of close to 90,000 stores. Throughout 47 years, Fast has served a whole spectrum of enterprises, from the largest multinational companies and Filipino conglomerates to tens of thousands of sari-sari stores and neighborhood groceries. Today, the Group is present in transport logistics, warehouse management, selling distribution, toll manufacturing, and value adding supply chain services.