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Business

North Star readies Palawan, Iloilo distribution hubs

Catherine Talavera - The Philippine Star

MANILA, Philippines — Leading pork and beef vendor North Star Meat Merchants Inc. is ready to construct distribution hubs in Palawan and Iloilo this year, which will be funded by proceeds from its planned initial public offering (IPO).

In an interview with reporters, North Star founder and chief executive officer Anthony Ng said the company has acquired properties in the two provinces for the distribution hubs.

“We already procured the land, so we’re ready (to start development). We already have the plans with us. We already know what it will look like, what are the facilities needed there. So pretty much we’ve already taken the initial steps, getting the land, the design,” Ng said.

He said the planned distribution hubs would be a hybrid of cold storage and pick and pack facilities for frozen food.

Ng cited Palawan as a strategic area for the company, emphasizing the province’s potential from tourism.

“Palawan should be very strategic for us in terms of putting up a facility, and a mixed use at that. Not just a cold storage facility, but one that can also do value adding services,” he said.

The company official said the development of distribution hubs in Palawan and Iloilo is in line with the company’s goal of investing in underserved areas in the country.

“The main goal is to be the backbone of cold chain in the Philippines. So we’re going to put up as many as it takes, as many as needed,” Ng said when asked how many more distribution hubs are targeted to be constructed.

He stressed that the company needs to consider factors such as the number of meat stores that need their services in the area.

“We’re also looking at tourism activity and the likes. So we should also be very prudent in investing, and putting up these facilities,” he added.

“We’re also looking at the activity of our expansion of clients, partners. It’s very critical if they’re going to open in that area. Remember it’s not just servicing hotels, restaurants and whatever, but really the core is to service the meat concession counters, the shops,” he said.

Operating for 20 years, North Star is a leading supplier of fresh and frozen meat to key retail partners such as SM Markets and Waltermart Group.

The company is the meat concessionaire in 360 retail outlets and its meat is served in more than 1,251 groceries, stores, and restaurants nationwide.

“So we have active deals right now that will probably give us more reasons to open in Iloilo and Palawan, not only with SM there, but there are other companies,” Ng said.

Apart from the construction of distribution hubs in various parts of the country, Ng said the company will also use the proceeds from its planned P4.5 billion IPO for the increase of working capital for improved cost of inventory by contract, spot, and bulk purchasing of inventory; and expansion of product lines to take advantage of its national distribution network.

Last month, North Star filed with the Securities and Exchange Commission (SEC) a preliminary prospectus for the offer and sale of up to 392 million common shares with an oversubscription option of up to 58 million secondary shares. The offer shares will be offered at a maximum price of P10 each.

The company said it plans to start the offering in June and expects to list before the end of the first half.

“North Star seeks to become the most efficient meat supplier in the industry. We aim to be an industry leader in delivering and distributing fresh frozen products. As we grow and strengthen our operations, we put ourselves in a position where we become one step closer to our goal of being the cold chain backbone of the country. As such, part of the use of proceeds of this IPO goes to strengthening our cold chain infrastructure,” Ng told The Star.

Currently, North Star has 8.09 million kilograms of company-owned cold storage capacity nationwide and can deliver up to 120,000 kilograms of meat daily using company-owned reefer vans.

IPO

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