MANILA, Philippines - Hengda Group Holdings Corp., the parent firm of Chinese sportswear maker Mingyi Shoes and Garments Co., Ltd., is purchasing a 40 percent stake in Sporteum Philippines, Inc. to distribute sporting goods here.
In a press conference yesterday, Sporteum Philippines chairman Philip Go said Hengda Group’s purchase of a 40 percent stake in Sporteum is part of the memorandum of understanding (MOU) signed by the two parties yesterday to distribute Vobu, a Chinese brand of sports footwear, in the local market.
He declined to say how much investment Hengda Group is making in Sporteum, citing that due diligence is ongoing.
“We expect the transaction to be done in three months,†he said.
Under the alliance forged by the two companies, the parties would work to repackage Vobu as a more attractive and appealing concept for the Philippine market which is dominated by international sports footwear brands.
Vobu is currently being distributed in over 20 provinces in China.
Go said the plan is to launch Vobu shoes in the local market before the end of the year.
Apart from the introduction of Vobu sports shoes, he said the alliance also provides opportunities for Sporteum to use Hengda Group’s manufacturing and design capabilities as well as its distribution network in China to bring homegrown sports footwear, apparel and accessories brand Accel there.
He said the production of Sporteum’s Accel shoes is currently outsourced in factories in China, while the firm’s other products are manufactured locally.
Hengda Group chairman Ding Jianming said in the same event they decided to enter the Philippine market given growth prospects and opportunities here amid improving economic conditions.
“The strong growth in the retail segment is driven by growing affluence of the burgeoning middle class as well as their changing purchasing patterns and brand preferences,†he said.
Go said Sporteum aims to capture seven to 10 percent of the market within 18 months from the introduction of Vobu shoes here to add to the estimated 10 to 15 percent share currently held by Accel shoes.
The introduction of Vobu shoes, he said would complement Accel and not compete with it.
Hengda Group, which was registered with the Securities and Exchange Commission in December last year, plans to list in the Philippine Stock Exchange (PSE).
Should regulators approve the firm’s application to list in the local bourse, it would be the first foreign firm to be publicly traded in the PSE.