Conglomerate JG Summit Holdings Inc. is spending P87.5 billion this year mainly to fund the expansion of its petrochemical, airline, property and food businesses.
JG Summit president Lance Gokongwei said in an interview following the annual stockholders’ meeting Thursday the company would spend P32 billion this year for the expansion of its petrochemical plant in Batangas.
The $1-billion naphtha cracker facility, which will be completed by 2020, will increase the production capacity to 480,000 tons from 320,000 tons.
Gokongwei said the expansion would maximize the value from the cracker and polymer product portfolio, and potentially double the profitability in the following years.
The company is spending P27 billion for the airline business as it takes the delivery of new aircraft in line with an overall fleet modernization program.
The group is earmarking P18 billion for the property business, which is expanding its office, malls, retail, and hotels businesses.
JG Summit will also spend P9 billion for the expansion of the food business, including turnaround the coffee category by launching new products to regain dominance in the white space, as well as reinvest in brand building to effectively reach target customers.
Gokongwei said banking unit Robinsons Bank would continue to strengthen its account acquisition and product conversion while focusing on geographic expansion by increasing its branches from 160 to 200.
Robinsons Bank is focused on expanding its corporate banking, loans and retail segment, increasing credit card base through marketing and merchant acquisition, as it aims to become a universal bank in the next five years.
Gokongwei said the group would remain on the lookout for potential investments while strengthening its diverse businesses to achieve balanced sources of profitability.
“We anticipate better macroeconomic environment in 2019 on the back of stabilizing peso, inflation and oil prices. This should aid the recovery of our cyclical businesses while we aim to sustain the growth momentum of our property and banking units,” Gokongwei said.
“Nonetheless, we remain watchful of various risks in and outside the Philippines, including competition, geopolitical tensions, and rising interest rates,” he added.
