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Wellex in talks for property dev’t

Posted on September 13, 2012 09:58:15 PM [ BusinessWorld Online ]

GATCHALIAN-LED holding firm Wellex Industries, Inc. hopes to close by yearend a deal with a major real estate firm for the development of its sprawling Valenzuela City property into a mixed-use complex, an official said recently.

“We are still exploring for a JV (joint-venture) partner to develop our Plastic City property. We are targeting to close the said deal by the end of this year after a thorough review to get the best partner so we can get the best value for this property,” Weslie T. Gatchalian, Wellex Industries president and chief executive officer, announced in a speech at the company’s annual stockholders’ meeting at One Corporate Center in Ortigas Center, Pasig City yesterday.

“The Philippine real estate market is enjoying prolific growth especially in residential and commercial [segments]. This continued uptrend in real estate has fueled our desire to look actively for a JV partner to develop the prime property of the company and temporarily shelve our mining plans,” Mr. Gatchalian added.

Wellex Industries -- which lists mining and property as its primary and secondary purposes, respectively, but has no significant operations in either -- has been scouting for strategic local or foreign partners the development of its idle 50-hectare Plastic City property in Valenzuela City, the company’s 2011 annual report had read.

Asked to elaborate on the impending development deal, Mr. Gatchalian told reporters following the stockholders’ meeting: “We are now in exploratory talks with some of the country’s biggest property firms, around five. One in particular has already shown keen interest in transforming our prime asset.”

He declined to identify the developers Wellex Industries was speaking to.

If the company’s planned partnership were to push through, Wellex Industries would remain land owner while its partner would be contracted to develop and unlock the values of one of the largest properties in north Metro Manila, he said.

“The plan is to build the biggest integrated township complex in Valenzuela [City] which will cater not only to locals, but also to neighboring cities [sic] like Malabon, Caloocan, Obando, Meycauayan, and Marilao,” Mr. Gatchalian noted during the meeting.

“This will be a mixed-use urban complex that will include educational campuses, office buildings, residential condominiums and commercial areas.”

Last December, rumors surfaced that Wellex Industries was in talks with listed Ayala Land, Inc. for a possible joint-venture deal for the development of the former’s Plastic City property, but Ayala Land officials refused to comment.

Wellex Industries was incorporated in 1956 as Republic Resources and Development Corp., a mining and exploration firm, according to information posted on the Philippine Stock Exchange Web site.

It became a manufacturing-oriented holding firm in 1997 following the entry of the Gatchalian-controlled Wellex Group, Inc. in 1994.

It currently has two dormant subsidiaries: plastics manufacturer Plastic City Industrial Corp. and packaged foods and beverages firm Philfoods Asia, Inc., which both ceased operations in 2002.

It now earns from the lease of warehouses formerly operated by Plastic City, the company’s annual report stated.

The company narrowed its net loss by 8.01% to P18.94 million from in the first half from last year’s P20.59 million as lower expenses offset the decline in revenue for that period.

First-half rental income fell 9.55% to P8.71 million from P9.63 million in the same comparative periods due to a decrease in the number of the company’s tenants, while direct costs and expenses shrank 34.5% to P3.93 million from P6 million.

Wellex Industries shares yesterday ended trades unchanged at 32 centavos apiece. -- Franz Jonathan G. de la Fuente
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