Business World Online
Posted on March 29, 2011 09:48:47 PM
GOKONGWEI-LED conglomerate JG Summit Holdings, Inc. is now training its eyes onto power generation and public infrastructure like many of its peers after the firm’s telecommunications and airline businesses have reportedly matured, officials yesterday said.
“We intend to participate in public-private partnership especially relating to power projects and provincial airports,” James L. Go, chairman and chief executive of JG Summit, said in a briefing.
“Now that the telecommunications business matured in our portfolio and our airline business has also become more financially independent... that allows us some ability to look into other industries,” Bach Johann M. Sebastian, senior vice-president and head of corporate planning of JG Summit, said.
This comes after JG Summit yesterday announced that it will swap its 51.55% stake in telecommunications arm Digital Telecommunications Philippines, Inc. (Digitel) in exchange for a 12.8% stake in Philippine Long Distance Telephone Co.
So far, the firm’s forays into the energy business have been limited to taking minority stakes in projects.
“We need to partner with someone or develop the technical capability,” Mr. Sebastian said.
The Gokongwei group will end up competing with subsidiaries of conglomerates like San Miguel Corp., Aboitiz Equity Ventures, Inc., First Philippine Holdings Corp. of the Lopezes and DMCI Holdings, Inc. of the Consunjis that are already into power generation.
Pangilinan-led Metro Pacific Investments Corp., Filinvest Development Corp. of the Gotianuns and Ayala Corp. meanwhile have similarly announced their interest to enter into the power business.
“We are sort of newcomers so we need to study it,” Mr. Sebastian said.
Astro C. del Castillo, managing director of brokerage firm First Grade Holdings, Inc., for his part noted that San Miguel had begun diversifying into power via joint ventures to gain expertise.
“San Miguel also had no expertise then. But [JG Summit] can always venture with other technical partners,” Mr. del Castillo said in a phone interview yesterday.
“There still is a huge demand. The private sector is needed to inject capital,” Mr del Castillo added.
Last year, Visayas and Mindanao suffered from several power outages given the supply gap, which was aggravated by the El Niño phenomenon that dried up hydropower plants.
Mr. Sebastian went on to note that plans for the long-stalled naphtha cracker continue to firm up with some equipment expected to be delivered by the third quarter.
Gokongwei-led subsidiary JG Summit Olefins Corp. is behind the P32.883-billion investment, which will annually produce 925,537 tons of polymer-grade ethylene and propylene, pyrolysis gas and other by-products by January 2014.
The project proposal has been revised three times since it has first been docked with the Board of Investments, an incentive-granting agency, in 2005.
The project is expected to directly employ 500 workers and support services should bloat that number to 2,000.
JG Summit and Digitel yesterday requested a trading halt for their shares amid several speculations.
Shares in the companies were one of the most actively traded stocks in the local bourse since last week.
JG Summit almost doubled its consolidated profits to more than P16.32 billion last year amid record performance in its operating units. -- Neil Jerome C. Morales
“Now that the telecommunications business matured in our portfolio and our airline business has also become more financially independent... that allows us some ability to look into other industries,” Bach Johann M. Sebastian, senior vice-president and head of corporate planning of JG Summit, said.
This comes after JG Summit yesterday announced that it will swap its 51.55% stake in telecommunications arm Digital Telecommunications Philippines, Inc. (Digitel) in exchange for a 12.8% stake in Philippine Long Distance Telephone Co.
So far, the firm’s forays into the energy business have been limited to taking minority stakes in projects.
“We need to partner with someone or develop the technical capability,” Mr. Sebastian said.
The Gokongwei group will end up competing with subsidiaries of conglomerates like San Miguel Corp., Aboitiz Equity Ventures, Inc., First Philippine Holdings Corp. of the Lopezes and DMCI Holdings, Inc. of the Consunjis that are already into power generation.
Pangilinan-led Metro Pacific Investments Corp., Filinvest Development Corp. of the Gotianuns and Ayala Corp. meanwhile have similarly announced their interest to enter into the power business.
“We are sort of newcomers so we need to study it,” Mr. Sebastian said.
Astro C. del Castillo, managing director of brokerage firm First Grade Holdings, Inc., for his part noted that San Miguel had begun diversifying into power via joint ventures to gain expertise.
“San Miguel also had no expertise then. But [JG Summit] can always venture with other technical partners,” Mr. del Castillo said in a phone interview yesterday.
“There still is a huge demand. The private sector is needed to inject capital,” Mr del Castillo added.
Last year, Visayas and Mindanao suffered from several power outages given the supply gap, which was aggravated by the El Niño phenomenon that dried up hydropower plants.
Mr. Sebastian went on to note that plans for the long-stalled naphtha cracker continue to firm up with some equipment expected to be delivered by the third quarter.
Gokongwei-led subsidiary JG Summit Olefins Corp. is behind the P32.883-billion investment, which will annually produce 925,537 tons of polymer-grade ethylene and propylene, pyrolysis gas and other by-products by January 2014.
The project proposal has been revised three times since it has first been docked with the Board of Investments, an incentive-granting agency, in 2005.
The project is expected to directly employ 500 workers and support services should bloat that number to 2,000.
JG Summit and Digitel yesterday requested a trading halt for their shares amid several speculations.
Shares in the companies were one of the most actively traded stocks in the local bourse since last week.
JG Summit almost doubled its consolidated profits to more than P16.32 billion last year amid record performance in its operating units. -- Neil Jerome C. Morales
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