Vulcan’s transformation into retail play seen in Q1 ’14

National Book Store, the country’s largest books and office supplies chain, is set to complete its backdoor listing via Vulcan Industrial & Mining Corp., by the first quarter of 2014, which will pave the way for Vulcan’s transition from a minerals explorer into a “pure” retail play.

Adrian Ramos, director and treasurer at Vulcan, told reporters that auditor SGV and Co. was helping in structuring the deal with National Book Store and other financial advisers. Vulcan and National Book Store are both owned by the Ramos family.

Vulcan, which has been unsuccessful in getting its various mining projects off the ground, partly due to regulatory issues facing the sector, obtained the approval of shareholders on Wednesday to allow the entry into the company of the National Book Store Group, the increase in its capital from P600 million to P4 billion and the change in its primary focus to retail.

Shareholders also approved the spin-off and possible sale of Vulcan’s mining assets.

“The main reason we really want to divest of the mining assets is that people want a clean retail story,” Ramos told reporters at the sidelines of the company’s meeting on Wednesday.

What will emerge will be the only book store chain to be listed on the Philippine Stock Exchange.

The Ramos family is betting that continued economic growth will likewise boost the business of National Book Store, which has more than 160 stores nationwide. It ended 2012 with sales of about P10 billion, up 5 percent year on year, Ramos said.

“There is huge potential for us to be able to grow this business in accordance with the growth of the country,” Ramos said, estimating that sales of National Book Store may grow by about 10 percent this year.

The company derives about 60 percent of its sales from office and school supplies, with the remainder coming from books. The latter segment, however, is being threatened in other parts of the globe as consumers turn to digital products like e-books.

Ramos said National Book Store was preparing its own “digitization” strategy although he declined to give specific details.

“We believe that in the near future there will still be a need for the traditional form of books. However, we continue to explore our own entry into digitization as may be required by the business,” he said.