North Star Meat Merchants Inc., which recently shelved a planned P4.5 billion initial public offering, has expanded its business to include last-mile logistic services for retailers such as the Alfamart convenience stores.
North Star founder and CEO Anthony Ng said the company has clinched a deal with Alfamart, a unit of the SM group, as one of its so-called last-mile delivery firms.
Initially, North Star will service all Alfamart’s stores north of Metro Manila as the retailer still has existing contracts with logistics providers servicing other parts of the country.
Alfamart operates 1,500 stores nationwide with a large concentration of stores in Cavite.
Ng said providing logistics services to third parties allows them to maximize the use of their existing cold storage facilities and distribution capacity.
“We already have the cold storage facilities, the refrigerated delivery vans, and the software so we just need to add the items of our new logistics customers to our existing routes,” he said.
The items includes meat products they supply retailers, mainly the SM group, as well as frozen products their customers buy from other suppliers delivered to North Star for distribution to their retail outlets.
Ng said North Star already has distribution network from as far north as Aparri to Zamboanga in the south. Its biggest customer for meat products is the SM Retail’s supermarket chains.
Ng said the meat business remains strong in the first quarter and the hope is to sustain the strong sales experienced during the pandemic when people cooked at home and bought meat from grocery stores. Sales was strong at North Star during the period, he said.
Ng said the reopening of the economy meant people are dining out more often and doing less cooking at home.
Also, because of inflation, supply issues and the African swine fever, margins are not as good as in previous years even though sales are thus far keeping up.
The Philippine Stock Exchange earlier approved North Star’s proposed P4.5 billion IPO and
planned to use the proceeds to expand its cold chain infrastructure, improve its operating cycle and expand product lines and research and development work.
