Cosco group strengthens foothold in Central Luzon

MANILA, Philippines–Retail magnate Lucio Co has strengthened his foothold in Luzon with the acquisition of nine supermarkets and five commercial properties outside Metro Manila.

In a disclosure to the Philippine Stock Exchange (PSE) on Wednesday, Co-led Puregold Price Club Inc. said the company had acquired nine supermarkets in Cabanatuan, Nueva Ecija; San Jose, Nueva Ecija; Baliwag, Bulacan; Baler, Aurora, and Santiago, Isabela, from NE Inc.

Puregold’s parent conglomerate Cosco Capital, in a separate disclosure, announced the acquisition from NE of five commercial properties—land with buildings and improvements—at the following addresses: Zulueta St., Cabanatuan City; San Jose City, Nueva Ecija; San Juan Accfa, Cabanatuan City; Baler, Aurora, and Santiago City, Isabela.

“Three of these we plan to develop into community malls—the ones in San Jose City, Baler and Cabanatuan,” Leonardo Dayao, president of both Puregold and Cosco, said in a phone interview.

For Puregold, the acquisition of the nine supermarkets was intended to expand its net selling area and grow revenue base. Dayao added that the anchor tenants in these commercial properties bought by the group were a retailing brand called NE Bodega.

“We plan to operate them in their present brand name since they are very well known in the province. We’ll capitalize on their existing customers and their existing brand name,” Davao said.

The additional stores would make Puregold the dominant retail player in the province of Nueva Ecija, the disclosure said.

“We have only one Puregold (store) in the whole of Nueva Ecija and now we’re adding very immediately. We will have the most number of chained stores in Nueva Ecija,” Dayao added.

For its part, Cosco said its acquisitions were meant to grow its revenue and income bases as well as to increase its rental selling space.

The seller is not related to Puregold and Cosco or any of their directors or affiliates, based on the disclosure. Dayao said the seller was the name group that earlier sold to Cosco its NE Pacific Mall, the first large commercial mall in Cabanatuan City with a gross floor area of more than 35,000 square meters.

The acquisitions were priced at about eight to 10 times projected earnings, Dayao said.

Once a purely oil, gas and mining firm called Alcorn Gold Resources Corp., Cosco was transformed by the Co family into a holding firm for the bulk of its businesses.

The assets injected into this company consisted of a majority stake in grocery operator Puregold, an array of liquor distribution companies, a portfolio of commercial real estate companies and an oil storage business (Pure Petroleum Corp.)

For its part, Cosco is expanding into specialty retail as differentiated from its heavy engagement in the food retail as represented by Puregold. Cosco earlier acquired Office Warehouse and is looking to acquire or develop other retail formats.–Doris C. Dumlao