Media and entertainment giant ABS-CBN Corp. is diversifying in new businesses outside the media space in a move seen as a possible preparation in case its franchise will not be renewed next year.
ABS-CBN announced through separate disclosures to the Philippine Stock Exchange yesterday three major investments that would see the company venture into the food and beverage, customer and merchant e-wallet services, and cosmetics production sectors.
The company said it is investing in a wholly owned subsidiary, The Chosen Bun Inc., to raise, process, manufacture and package all kinds of food products, as well as establish, operate, manage and maintain restaurants, coffee shops, and refreshments parlors, and serve, arrange and cater refreshments and other food or commodities.
The Chosen Bun will initially have an authorized capital stock of P1 million, of which P250,000 will be subscribed by ABS-CBN.
“ABS-CBN Corp. aims to provide consumers with new food products that are healthy and affordable,” the company said.
Aside from its food and beverage venture, ABS-CBN is also making an investment in the customer and merchant e-wallet/e-market services business through a joint venture with information technology services company iBayad Online Ventures Inc.
The media giant and IBayad Online Ventures will organize, invest in, and operate a joint venture corporation for purposes of engaging in the business of customer and merchant e-wallet/e-money services and other related services, as well as advertising, producing, distributing, and marketing products and services that are connected to the operations of said business.
The joint venture company will initially have an authorized capital stock of P100 million, of which P51 million will be subscribed by ABS-CBN.
“The joint venture will enable the provision to customers and merchants of e-wallet and e-money services and other related services,” the listed firm said.
ABS-CBN is also teaming up with Ever Bilena Cosmetics Inc. to invest in a joint venture firm that will engage in the business of manufacturing, production, trading and sale, on wholesale or retail cosmetics, including purchase and importation of raw materials, finished goods, packaging materials and machinery and equipment necessary for said business.
The joint venture corporation will initially have an authorized capital stock of P10 million, of which P1.25 million will be subscribed by ABS-CBN.
The joint venture corporation will have its own management, with Ever Bilena providing support in product development, logistics and retail distribution.
From conceptualization to commercial launch, the parties have agreed to complete and execute all agreed milestones from a period of 54 to 76 weeks.
“The two industry leaders aim to provide consumers with cosmetic products that are affordable and with good quality. Leveraging the strengths and resources of both companies where expertise of Ever Bilena on production development, logistics and distribution and expertise of ABS-CBN on marketing promotions and talent development are utilized to launch a cosmetics brand,” ABS-CBN said.
ABS-CBN, home to the Philippines’ top-rating TV programs, box-office films, and best-selling books and music, is rapidly transitioning into an agile digital company with a growing list of digital properties.
The company, however, is in danger of not having its franchise renewed when it expires next year following repeated threats from President Duterte himself.
Duterte has said several times that he is personally against the renewal of franchise of the media and entertainment giant.
Eagle Equities Inc. head of research Chris Mangun said it is possible that these new investments being undertaken by ABS-CBN are in preparation should it fail to have its franchise renewed.
“It is quite surprising that they are starting to venture into other business outside of the media space. Food, beverage and cosmetics are highly profitable sectors and the e-market services sector is starting to take off,” Mangun told The STAR.
“So yes they may be covering their bases in case their franchise is not renewed,” he said.
https://www.philstar.com/business/2019/03/30/1905644/abs-cbn-diversifies-food-cosmetics-e-market
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