SMIC sees logistics, renewables as its next growth areas
SM Investments Corp. (SMIC) is betting on its logistics and renewable energy businesses to be the next potential growth sectors for the country’s largest conglomerate as it remains confident about its prospects this year.
Frederic DyBuncio, SMIC president and CEO, said in an interview with CNA News on Friday that all their businesses would continue to grow and expand, especially since the economy was improving.
“For SM … each consumer has a touchpoint on each of our businesses,” DyBuncio said. “So as the economy continues to grow and consumers continue to earn, they continue to spend, each of their spending will actually benefit the whole SM Group’s businesses.”
Better economic conditions in the Philippines were attributed to the unemployment rate falling to 3.7 percent in June from 3.9 percent the previous month, entailing more spending power for Filipinos. Inflation also cooled to 0.9 percent in July, the slowest in nearly six years.
SMIC—which is involved in retail, real estate and banking—expects all its units to grow at the same pace. DyBuncio said they were particularly bullish about their portfolio businesses, specifically logistics and renewable energy.
In 2022, SMIC gained majority ownership in logistics group Airspeed, increasing its stake from 35 percent to 51 percent.
This added to SMIC’s footprint in the logistics industry, which includes 2GO Group Inc., a provider of shipping, logistics and distribution services.
Revenues from SMIC’s shipping, logistics and other services rose by 2.6 percent to P9.88 billion in the first six months of this year.
2GO doing well
In an earlier briefing, DyBuncio told reporters the logistics business was doing particularly well, especially 2GO.
“For the southbound business, from Manila going to [Visayas and Mindanao], all of our ships are actually full. In fact, we’ve been having to push back some of the containers because of the lack of space on our ships,” the CEO said previously.
As for the geothermal power business under Philippine Geothermal Production Company Inc. (PGPC), DyBuncio confirmed they were looking to develop and explore six concessions that would hopefully add to their portfolio.
Three exploratory wells have already been drilled on Mt. Malinao in Albay province, although PGPC is still seeing whether the steam is commercially viable.
PGPC, which made up 35 percent of the portfolio investments group’s P2.8-billion net income in the first semester, operates geothermal steam fields in Tiwi, Albay and MakBan in Laguna and Batangas.
While revenue has gone down for the geothermal power business because of high spot market prices, DyBuncio said that production “has been doing well.”
In maintaining optimism for the renewable energy business, DyBuncio cited the government’s goal of increasing the share of clean energy in the country’s total capacity to 35 percent by 2030 and 50 percent by 2040.
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