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In an interview with InsiderPH [link], the CEO of AC Logistics (ACL), Erry Hardianto, said that it took the “opportunity to basically reset [ACL’s] strategy” and will be closing down Air21. This comes after it already completed the wind-down of Entrego in 2024. As for ACL’s new strategy, Mr. Hardianto said that its focus will now be “revolving around the customers”, and that it will deploy P5 billion to P8 billion over the next three to four years to expand both organically (building new facilities) and through acquisitions (buying other companies). Mr. Hardianto said that it is looking to actively acquire companies in the cold storage space, as ACL considers cold storage the common denominator in the “tangle between incoming goods, the storage of the goods, and the distribution of the goods.” The ACL CEO said that they’re not aiming to be #1: “My objective is to be a significant player, but we also want to be the highest quality provider in the country”.
MB bottom-line: As I commented on Twitter, I feel like this interview was a validation of everything that I’ve been saying about the Zobel Family’s approach to logistics, and especially to its “just add more pallet positions” approach to cold storage. What I’ve been saying for years (since COVID) is that a significant move in the cold storage space will require acquisitions, and that any talk of organic expansion to compete is just PR fluff. The established private players are all land-rich in good locations. I’ve also been saying that, unlike the dry warehouse market, the cold storage market is dominated by service quality and the reputation that develops through the handling (at commercial scale) of perishable food products in the tropical heat. Being “the best” cold storage isn’t just a matter of putting up random buildings with compressors, staffed with entry-level workers. Top-quality clients require top-quality organizational knowledge, systems, and execution. Those clients aren’t going to be impressed by sheer size. I’m glad to see ACL acknowledging the need to change strategies, but I’m overall still concerned that the Zobel Family’s scattered logistics approach isn’t going to be suddenly fixed by ACL’s newfound direction. Operating assets are spread out across several legal entities, and it’s not clear if uniting these under one standard is part of the family’s long-term strategy or not. Seems like a challenging environment to win the best customers from the best incumbents.
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