JG Summit turns to infra, power businesses

Manila Times.net

By Krista Angela M. Montealegre, Reporter

AFTER shedding its telecom business, JG Summit Holdings Inc. said it will venture into the power and infrastructure industry, as well as firm up its naphtha cracker plant project.

“We want to participate in PPP [public-private partnership] projects of the government in relation to power projects [and] airports so there’ll be many things to do with the government encouraging a lot of infrastructure projects,” said James Go, JG Summit chairman and chief executive, in a briefing.

Lance Gokongwei, JG Summit president and chief operating officer,
refused to disclose specific projects that the company will bid for under the government’s public-private partnership scheme, saying they are “still under review.”

“Our main focus will be our petrochemical and exploring and developing the infrastructure initiatives. I see a lot of opportunities to invest there,” he, however, said.

With its telecom business maturing and its airline business more financially independent, it is time for the parent company to re-deploy cash to grow its remaining businesses such as food and beverage, real estate, airline, banking and petrochemicals, Bach Johann Sebastian, JG Summit senior vice president, said.

“We’ve invested in minority projects before as a minority. We may need to partner with someone or develop the technical capability ourselves,” he added.

JG Summit, through its unit JG Summit Petrochemicals Corp., is spending $700 million to put up a naphtha plant in Batangas.

The detailed-engineering plant is almost complete with some of the equipment to be delivered in the third quarter.

The petrochemical firm is expected to make marginal contributions in the next three years during the project’s construction. Its losses fell by 80 percent to P102.1 million from P511.10 million in its last fiscal year on lower cost of sales and foreign exchange gains.

“After the naphtha plant is built, that’s the only time it will be very significant,” said Sebastian.

Originally registered with the Board of Investments in 2005, the project has suffered delays because of capital problems.

The Philippine Stock Exchange has imposed a one-day trading halt on JG Summit and Digitel. JG Summit shares were last traded at P24.50 on Monday.