Victory Group earmarks P2.5B for expansion

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North Distribution Center 2 is almost complete and has been recently turned over to lessee FAST Logistics. Photo courtesy of Victory Group of Companies.
  • Victory Group of Companies is spending P2.5 billion this year to build two warehouses and expand another
  • The investment by the end-to-end supply chain solutions provider aims to increase warehousing capacity by another 300,000 pallet positions by 2025
  • For construction are the North Distribution Center 3 and Mindanao Distribution Center while NDC 1 will be expanded
  • VG is currently completing the P1.5-billion NDC 2, which it recently turned over to lessee FAST Logistics
  • VG also targets to grow its fleet to almost 1,000 transport units from the current 600 and employ 250 truckers from 150

Victory Group of Companies (VG) is spending P2.5 billion this year to build two warehouses and expand another, group president and chief executive officer Enrique Castillo told PortCalls in an interview.

The end-to-end supply chain solutions provider aims to add 27 hectares and increase warehousing capacity by about 300,000 pallet positions in 2025, excluding leased warehouses that the group operates for various customers, which have a total of 280,000 pallet positions.

Castillo said the group aims to lease another 30 hectares of warehouses or 28,000 pallet positions next year.

VG offers synchronized end-to-end solutions through its operating unit—VG Supply Chain, Inc.

While operations of domestic shipping unit Victory Star Shipping Lines are on hold, a resumption is now being studied.

The VG executive is bullish for 2024, describing it as a “kick-off” year as it embarks on various warehouse expansion projects and systems improvement.

The group positioned 2023 as a “positive reset”, achieving a billion pesos in sales and turning in a healthy EBITDA of about 20%.

The P2.5-billion investment will entail construction of North Distribution Center (NDC) 3 and Mindanao Distribution Center (MDC), and the expansion of NDC 1. The projects will be started within the first quarter of the year.

NDC 3, in Meycauayan, Bulacan, will have a capacity of 20,000 pallet positions while NDC 1, located on a 33-hectare site also in Meycauayan, will be expanded by another 10,000 pallet positions from its current 35,000 pallet positions.

The eight-hectare MDC will be located in Davao with a capacity for 35,000 pallet positions. It will feature a cold storage facility to accommodate agricultural produce in the region.

The construction of MDC is a testament to the group’s belief in the country’s growth potentials, Castillo said.

Aside from the three projects, VG is completing NDC 2, which it recently turned over to lessee FAST Logistics.

READ: Victory Group building P1.5B distribution hub for FAST Logistics

The P1.5-billion, 4.4-hectare multi-client facility located in Meycauayan, Bulacan will have a capacity of 80,000 pallet positions. It broke ground in March 2023 and will be leased by FAST Logistics for 10 years.

VG also acquired a 20,000-pallet position warehouse in a prime property in Cupang, Muntinlupa, now the site of the company’s headquarters.

Bigger fleet, more truckers

In terms of transport operations, VG targets to grow its fleet to almost 1,000 units from 600 currently, supported by 250 truckers from 150.

In tandem with the expansion of its warehousing portfolio is the hiring of additional personnel and the improvement of the group’s systems.

Castillo said VG is upgrading its warehouse management system and putting in place this year an ERP (enterprise resource planning) software.

The group also just completed its in-house human resources system, and installed IT security.

Adding value to customer’s business

For this year, Castillo said the country’s supply chain industry will continue to be about adding value to a customer’s business.

“I have always said – any supply chain organization – whether you are an LSP (logistics service provider) or a principal – should bring their businesses and their customers’ businesses to the future,” Castillo explained.

He ruled the shortage of talent in the industry and said that “whoever secures or develops the talent will have the major edge now and in the coming years.”

On this score, VG is well positioned in the market as it has been built on the foundations of value, talent, and consolidation, Castillo said.

“When we entered this market, we said customers value consolidated space in the north of Manila so we built NDC 1; customers were longing for more conveyance capacity, so we invested in a fleet of VG-operated trucks; and even in a domestic carrier. We’ve assembled logistics talents to allow us define and execute the [VG] value proposition – putting us in a better position to understand what are of value to our customers. As we secured years of operating experience, we were then able to consolidate a network of supply chain resources and solutions to continue delivering the value sought after by customers,” Castillo concluded. – Roumina Pablo