Biz Buzz: Aiming for the leader
How does a logistics company overtake a rival many times its size and reach?
Why, a partnership of course.
This appears the case with Black Arrow Express, the budding “last mile” service provider of the AAI Group of Companies. Readers might not be familiar with this logistics group, but they might soon be should it reach its goal of listing in 2020 via an initial public offering worth as much as P5 billion.
Anyway, back to Black Arrow, which started last year and has done well in the e-commerce space via internet marketplace Shopee as well as deals with ABS-CBN TV Plus and apparel giant Bench. Still, it’s nowhere near the last mile business of the LBC Group, apparently an industry benchmark.
As one AAI/Black Arrow executive puts it, the goal is “to be LBC … by not being LBC.”
While LBC has a significant physical presence, Black Arrow wants to do the same by partnering with a company with an extensive footprint around the country. By extensive, we mean down to the smaller municipalities and barangays as well as a high volume of transactions done with a significant slice of the population—sometimes on a 24/7 basis.
You might be thinking the money transfer sector and that’s about accurate. Such a business combination here made sense, since cash transactions are handled anyway. Why not add a logistics component to it?
Black Arrow is considering a partner with about 2,000 locations. With that alone, a few prominent names come to mind. We heard an agreement could be reached within the year. Until then, it’s simply another case of abangan! —MIGUEL R. CAMUS
COMP changing of the guard
Apart from recently retiring as president and chief executive officer of mining firm Benguet Corp. for health reasons, mining veteran Benjamin Philip Romualdez is likewise bowing out as president of the Chamber of Mines of the Philippines (COMP).
We heard that there will also be some changes in the leadership structure of COMP, with the association leaning toward the creation of two working vice chairs while some new names have been mentioned as potential new members of the 15-member board.
As to who will replace Romualdez, this will be determined in COMP elections that will come very soon, although the buzz is that Gerard Brimo, president and CEO of Nickel Asia Corp., is a leading contender.
According to the grapevine, former presidential candidate and Arroyo era defense secretary Gilbert “Gibo” Teodoro, who now chairs Sagittarius Mines, is seen infusing new blood to COMP’s 15-member board.
There are also two other new names coming out as potential new members of the board, namely Nickel Asia senior vice president Dennis Zamora and Macventures Holdings president Isidro Alcantara.
Now, while the mining industry has overcome one of the greatest storms ever, with staunch environmentalist and anti-mining advocate Gina Lopez failing to secure her appointment as environment secretary, the industry isn’t over the hump as many of the policies believed to be disadvantageous to the mining industry have yet to be reversed. So the work load facing the next COMP board isn’t any less challenging.
Meanwhile, the mining industry’s nemesis Gina Lopez isn’t just about to fade into oblivion. She may next reinvent herself as a legislator, based on popular theory. Watch out for Philippine senatorial elections 2019! —DORIS DUMLAO-ABADILLA
Tieza’s new thrust
There was a time when getting appointed to head the Tourism Infrastructure and Enterprise Zone Authority (Tieza) was just another cushy government job in a redundant agency whose role was never really clearly defined.
Or worse: An agency whose only role was to add to the aggravation of travelers by making them queue up for precious minutes to pay travel tax at the airport, all while hoping that your airline’s check-in counter will not close in the meantime.
But all that may change with new Tieza chief Pocholo Paragas, who has set in motion a number of ambitious initiatives that—if they work as planned— will result in a more effective tourism campaign for the country.
Biz Buzz caught up with Paragas recently and the former information technology professional clearly showed his expertise in the field by making the reform of the hated travel tax counters his top priority.
In particular, the Tieza chief explained that local travelers flying overseas would soon be able to forget about those queues, thanks to travel tax payments being integrated into the cost of the airline ticket at the point of purchase. For now, these airline partners, which will collect travel taxes on behalf of the government, are Air Asia, Air China, Cebu Pacific, China Eastern Airlines, Delta Airlines, Etihad Airways, KLM Royal Dutch Airlines, Lufthansa, Malaysia Airlines, Philippine Airlines, Qatar Airways and Silkair.
Naturally, more carriers are expected to follow since they want their passengers to have a better and more efficient check-in experience.
And just in case passengers continue to grumble about the P1,620 travel tax they pay (first class passengers pay P2,700), Tieza points out that only 50 percent of this amount goes to the agency and is spent on improving the country’s tourism infrastructure. The Commission on Higher Education receives 40 percent of what travelers pay while 10 percent goes to the budget of the National Commission on Culture and the Arts.
But this is only one of five pillars that Paragas wants to implement at Tieza.
The official told Biz Buzz that he has also initiated a program called “Project DREAMS”, which is (as expected) an acronym for “Destination, Restoration, Eco sustainability, Agritourism, Medical assistance, and Security and accessibility”.
In short, Tieza wants to create more tourist sites for the country that could attract foreign travelers by partnering with local government units to create these attractions. While Tieza had similar programs in the past, with limited success, Paragas envisions a more proactive relationship with LGUs by providing them with a tourism template that local officials must comply with. Failure to provide basics like clean restrooms or adequate security, for example, will result in the loss of Tieza funding for LGUs.
Paragas also wants to leverage underutilized Tieza assets to draw in more tourists from here and abroad. Little known assets of the agency include the Balicasag Island Dive Resort in Bohol (who knew?) and the Banaue Hotel in Ifugao (again, who knew?), which could be further improved through potential partnerships with private investors.
Tieza is also pushing for the establishment of more Tourism Enterprise Zones across the country. TEZs are basically tourism-oriented versions of special economic zones that allow locators—hotels, resort operators, casino firms, theme park companies, etc.—to enjoy fiscal perks in exchange for setting up shop in designated tourism areas around the country.
Finally, Paragas wants Tieza to spearhead the setting up of the proposed Manila Cruise Terminal —a sprawling facility at the edge of Manila Bay that will cater to mega cruise ships and the thousands of travelers they carry. The project is envisioned to be similar to Hong Kong’s Harbor Center facility, which, apart from being a cruise terminal, also has hundreds of retail establishments, dining facilities and hotels.
But like many plans before it, laid out by many other government agencies in snazzy PowerPoint presentations, the proof of the pudding will be in the eating. For Tieza, the ultimate test will be its ability to execute these plans.
Will the new agency chief succeed where others have failed? Abangan! —DAXIM L. LUCAS