In its latest annual report, Ayala said it booked close to P3 billion in losses as a result of asset write downs last year while it winds down the business in 2024.
Entrego’s current network and business operations will be integrated within Ayala’s subsidiary AC Logistics Group, in particular, with those of its majority-owned business Air21 Group, the conglomerate said.
A notice on Entrego’s website showed it has stopped express and courier operations as of April 1, 2024 as these have been outsourced to Air21.
Ayala and other leading business groups have identified logistics as a high-growth sector crucial for enhancing the effectiveness of supply chains in an archipelago like the Philippines.
SM Investments Corp., another major conglomerate owned by the Sy family, is also aggressively expanding in the segment via 2GO Group Inc. and Airspeed.
Ayala established AC Logistics in 2021 as its primary holding company in the sector.
Entrego was established in 2013 as the logistics arm of e-commerce giant Zalora Philippines.
In 2018, Ayala saw an opportunity to expand in the space and acquired a 60 percent stake in the business.
At the time, Ayala chair Jaime Augusto Zobel de Ayala said the venture “unlocks opportunities for its real estate, banking, telecom, health, automotive, and industrial manufacturing businesses and paves the way for new business models.”
Ayala also committed P580 million to grow Entrego into major logistics player in the country.
Entrego was successful in meeting surging demand for online shopping. In 2018, it covered over 1,500 Philippine cities and municipalities and touted a 99 percent on-time delivery rate nationwide.
Years later, large e-commerce companies shifted away from third-party services to focus on building their own logistics capabilities, prompting the company to pivot to the smaller business-to-business segment.
Ayala began winding down the business in November last year “due to continuing challenges on the profitability of Entrego”.
“AC Logistics started the process of integrating the operations, businesses, and hub network of Entrego under the Air21 Group in order to maximize the logistics assets of both entities,” the conglomerate said.
It was unclear how many employees were affected. We have reached out to Ayala and will update this article after they have responded.
The conglomerate’s push in the sector will focus on Air21, which offers cross-border and international freight forwarding, customs clearing, warehousing, domestic freight forwarding, nationwide express delivery, and domestic warehousing services.
It said Air21 is also ranked among the top 3 in international air freight cargo and is among the top 5 players in the domestic express delivery market in the Philippines.
In March 2023, Ayala raised its original 60 percent stake in Air21 to 80 percent.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
