Cosco Capital, Inc. and Siam Global House PLC have decided to mutually terminate their joint venture agreement entered into on 17 June 2022, which aimed to establish a retail business in the Philippines focusing on building materials, home improvement products, and construction tools.
The termination follows a strategic review of current market conditions, prompting both companies to reassess the feasibility of the venture.
Siam Global House, a Thai public limited company known for its extensive network of 76 stores across Thailand, specializes in selling construction and home improvement goods.
Cosco Capital, a diversified Philippine-based conglomerate, had intended to partner with Siam Global to capitalize on the growing demand for construction materials and home decor in the Philippines. Under the original agreement, Cosco was to hold a 45 percent stake in the venture, with Siam Global owning the remaining 55 percent.
Despite the initial optimism surrounding the partnership, both parties decided that the timing was no longer favorable to proceed with the venture. This decision effectively halts plans to incorporate a new joint venture company within the next few months. Although the planned joint venture had been expected to contribute significantly to Cosco’s business expansion, the mutual termination indicates a shift in strategy for both firms amid current market dynamics.
The termination of the agreement comes after an initial planned investment of P500 million, which would have seen profit-sharing based on equity participation in the new company. Cosco’s management emphasized that the decision aligns with its broader strategy to focus on more immediate opportunities and future projects. Despite the setback, Cosco remains committed to expanding its business portfolio through alternative avenues.
