Cosco buys Office Warehouse

Cosco Capital Inc., the holding firm of Chinese-Filipino businessman Lucio Co, is taking over office and school products supplier Office Warehouse Inc. as part of its expansion into non-food specialty retailing.

In a disclosure to the Philippine Stock Exchange Tuesday, Cosco said it had signed a deal to acquire 100 percent of the share capital of Office Warehouse, which has 47 stores. Office Warehouse is the biggest retailing platform of the Lorenzana family.

“It’s part of our expansion into the specialty retail as differentiated from our heavy engagement in the food retail represented by Puregold,” Cosco president Leonardo Dayao said in an interview. “We look at this as an expansion in the customer base that we are servicing. This is basically the office and business requirements of offices and schools. This is basically catering to the small- and medium-scale offices so as business grows there are opportunities for Office Warehouse to grow.”

Cosco said Office Warehouse already had “substantial” annual turnover but had the potential to grow further both in sales revenues and distribution network. At present, he said most of its stores were in Metro Manila while a handful were in Cavite, Laguna and Rizal.

“We have to look very closely at the market. These are not very big store spaces, just a maximum of 200 square meters so I think there’s still a lot of opportunity for growth in greater Metro Manila area, especially with rising business activities,” Dayao said.

“We have the seed for expansion for the future,” he added.

Once a purely oil, gas and mining firm called Alcorn Gold Resources Corp., Cosco was transformed by Co as a holding firm for the bulk of his businesses. The assets injected into this company consisted of the following: 51-percent stake in the country’s second-largest grocery operator Puregold Price Club Inc., an array of liquor distribution companies, a portfolio of commercial real estate companies and an oil storage business (Pure Petroleum Corp.).

While reducing its interest in the mineral extraction industry, Cosco has stated as a policy direction that it was increasing its focus on consumer-related businesses such as “non-food” specialty retailing such as pharmacy and construction/hardware materials distribution.