(Source: Manila Bulletin | February 9, 2018)
Mulgrave Corp. B.V., a Dutch retailer, is now the majority owner of Cebu-based drugstore chain Rose Pharmacy as it increased its ownership to 51 percent from 49 percent.
The Board of Investments has already approved Mulgrave as a registered foreign retailer under Republic Act No. 8762 or the Retail Trade Liberalization Act.
Rose Pharmacy was founded by the Lim family in 1952. It is now one of the country’s largest pharmaceutical retailers with 252 branches nationwide.
Mulgrave Corporation B.V. is a wholly-owned subsidiary of Bermuda-based Dairy Farm International Holdings Ltd. (DFIHL) and together with other DFIHL associates, joint ventures and subsidiaries, they formed the Dairy Farm Group which operates supermarkets, hypermarkets, health and beauty stores, convenience stores, home furnishing stores, and restaurants around Asia.
The Group carries well-known brands like Wellcome, Giant, Cold Storage, Jason’s Marketplace and Maxim’s. It also operates 7-Eleven and Ikea stores in Asia.
In the Philippines, aside from Rose Pharmacy, the Group owns 66 percent of Rustan’s Supercenters, Inc., which operates Rustan’s Supermarket, Shopwise and Wellcome.
Other health and beauty stores under Dairy Farm include Mannings, Guardian and GNC (General Nutrition Center) Live Well.
“This reflects the sustained confidence of foreign investors in the country’s economy,” said Trade Undersecretary and BOI Managing Head Ceferino Rodolfo, adding that the company is likewise seriously considering shelling out additional capital placements and set the stage for additional acquisition and expansion of retail outlets in the future given the growing domestic demand.
“The BOI is seeing increasing interest of foreign investors in the Philippines to access the expanding domestic market” said Undersecretary Rodolfo.
The government is keen in opening the domestic retail sector by substantially reducing the $2.5-million paid up minimum capital requirement to $200,000, a move strongly opposed by local retailers and the Philippine Chamber of Commerce and Industry.
The easing up in the foreign equity requirement for foreign retailers was meant to hopefully improve the country’s foreign direct investments (FDI).
The country’s FDI level has been growing but it still remained low compared to its ASEAN neighbors.
Data from the Bangko Sentral ng Pilipinas showed that net FDI inflows reached $2.017 billion in October, 2017, a threefold increase from $670 million in the same month in 2016. Net equity placements also paced the FDI inflows with $1.529 billion in October, 2017 or 25 times more than the $60 million registered in October 2016.
FDI inflows has already reached $7.9 billion from January to October, 2017, up by 20.5 percent from $6.5 billion the previous year. A sizeable portion of additional equity went to the power sector although other industries such as manufacturing, construction, wholesale and retail trade got capital boost as well.
The BSP has also said that the upsurge in FDI validates the bullishness of foreign investors in the country’s solid macroeconomic fundamentals and growth opportunities.
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