By Neil Jerome C. Morales (The Philippine Star) Updated November 07, 2012 12:00 AM
MANILA, Philippines - Property giant Ayala Land Inc. (ALI) is entering the convenience store business in partnership with Japanese conglomerate Itochu Corp.
The development will allow the Ayala-led firm to provide a retail format in its mixed-use communities, the company said.
“ALI, through SIAL CVS Retailers Inc., signed a shareholders’ agreement with FamilyMart Co. Ltd. and Itochu for the development and operations of FamilyMart convenience stores in the Philippines,” the firm said in a disclosure to the stock exchange.
SIAL is a joint venture between ALI and the Rustan’s Group’s Stores Specialists Inc., one of the largest specialty retail firms in the Philippines.
“This partnership, which combines ALI’s expertise in developing mixed-use developments and its partners’ proven track record in the retailing business, will enable ALI to provide a retail format that will support its mixed-use communities,” the property firm said.
ALI is into residential and office development, and shopping mall and hotel operations.
The convenience store business will also grow its recurring income portfolio, ALI said.
The entry of FamilyMart in the Philippines will provide a challenge to dominant players MiniStop of the Gokongweis and global franchise brand 7-Eleven.
FamilyMart and parent firm Itochu are listed at the Tokyo Stock Exchange.
To date, FamilyMart is the second largest convenience store retailer in the world with more than 20,000 stores in eight countries including Japan, South Korea, Thailand, China and the US.
Itochu, for its part, is one of the biggest trading conglomerates in Japan. It is into domestic and overseas trading of various products like textile, machinery, metals, minerals, energy, chemicals, food and construction.
In the Philippines, Itochu is engaged in the liquefied petroleum gas business through Solane, under a joint venture with the Delgados’ Citadel Holdings Inc.
ALI has earmarked P37 billion for its capital spending this year – its highest capital expenditures ever – mostly to go to residential projects, followed by shopping centers and hotels.
ALI maintained its upward trajectory in the first half this year with net earnings rising 28 percent to P4.33 billion on steady growth across all product lines.
Its consolidated revenues climbed 18 percent to P25.02 billion, bulk of which or P23.82 billion came from real estate and hotels, which represented an increase of 19 percent from the previous level.