MANILA, Philippines - Cosco Capital Inc. of Lucio Co expects better contribution from its non-retail businesses that are set for expansion this year, a top company official said.
Cosco Capital president Leonardo Dayao, however, noted that the retail business, through grocery chain Puregold Price Club Inc., would still account for bulk of the conglomerate’s revenues as it grows its footprint nationwide.
“Of course we will have Puregold that will account for bulk of the revenues but its percentage going down,†Dayao said.
As of end-March, Puregold contributed 61 percent of Cosco Capital’s total revenues, dropping from 90 percent last December given the infusion of the real estate, liquor and petroleum storage businesses.
“In the near term, the liquor distribution could contribute quite substantially.†“The same goes for the commercial real estate sector given our expansion program,†Dayao said.
Late last month, Cosco Capital raised P16.8 billion in fresh capital from the sale of existing and new shares to investors. Half of which will be used to expand the selling area of Puregold-anchored commercial real estate properties and increase the oil and petroleum storage of Pure Petroleum, Dayao said.
Around 20 percent of the proceeds had been allotted for the acquisition of non-food retail businesses like hardware and pharmacies. Another 20 percent would be used to pay down debt and the remaining 10 percent to improve the groups distribution network.
For the liquor business, Dayao said Cosco Capital wants to compete in the mass market by selling brands at less than P100 per bottle.
Cosco Capital claims to be the country’s leading importer of liquor with exclusive distribution rights for some of the world’s top brands such as Cuervo, Jim Beam, Fundador, Absolut Vodka, Johnny Walker, Chivas Regal and Alfonso.
The non-food retail business, on the other hand, will start to contribute in a couple of years, Dayao said.
In March, the Co family acquired Cebu-based drug store chain ThreeSixty Pharmacy, which has 70 branches located in Masbate, Cebu and Bohol, is under incubation period to improve its scale and efficiency prior to being folded into Cosco Capital.
The Co family injected into Cosco Capital its 51-percent stake in Puregold and several liquor distribution companies, commercial real estate firms and an oil storage business.
In the first quarter, Cosco Capital’s net income surged to P801 million from P193 million a year ago. Revenues surged 51 percent to P17.1 billion on the back of a 50 percent sales in growth for the retail business, 116 percent gain on real estate, 33 percent for liquor and 100 percent for oil storage.