San Miguel ventures into industrial estate

Conglomerate San Miguel Corp. is venturing into industrial estate development with a 2,000-hectare property in Davao del Sur province.

San Miguel is now inviting potential investors from diverse business sectors to locate their facilities in the 2,000-hectare industrial estate, which the Philippine Economic Zone Authority approved.

San Miguel said its venture into the industrial estate business was part of a commitment "to develop second-tier cities as growth engines for the Philippines through infrastructure development along with investment and employment generation."

San Miguel said in an advertisement published in a national newspaper its Davao Industrial Estate offers strategic site with easy access through the Davao City and General Santos City international airports and Davao seaport.

It also offers low long term lease rate, growing skilled workers, a 20-meter deep international port to accommodate container vessels, and a private airport.

A 600-megawatt coal-fired power plant in Malita, Davao Occidental, owned by San Miguel, is also expected to partially go on stream by the second quarter of 2016.

Several property developers like Ayala Land Inc. and Megaworld Corp. in 2014 ventured into industrial estate development, while existing industrial estate developer expanded their land bank on rising demand and a pick-up in manufacturing activities.

Property consulting firm Colliers Philippines earlier said the demand was mostly coming from companies engaged in light manufacturing, accounting and logistics.

Several foreign investors are also looking for alternative sites due to rising wages in China.

San Miguel is broadly exposed to the Philippine economy through its diverse range of businesses spanning the beverage, food, packaging, fuel and oil, energy, infrastructure, telecommunications, property and banking industries.

San Miguel said it was well-positioned for significant future growth as its established businesses in beverage, food and packaging continued to provide stable cash flow, while new businesses enabled the company to expand its ability to generate higher returns.

San Miguel in 2015 posted a 26-percent increase in consolidated net income, before foreign exchange adjustments, to P38.2 billion.

Operating income surged 41 percent to P78.7 billion, driven mainly by the robust performance of the food, beverage and packaging units, along with higher margins from Petron Corp., the result of stabilizing crude oil price environment.

Consolidated sales revenues, however, declined 13 percent to P674 billion due to the steep drop in crude oil prices from $111 per barrel in 2014 to $31 per barrel toward the end of 2015.

Source: The Standard

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