SMIC identifies its key growth drivers

While its core banking, retail, and real estate businesses continue to generate huge profits, SM Investments Corporation (SMIC) is relying on its portfolio investments for future growth and to steadily increase its share in total earnings in the coming years.

In a media briefing, SMIC President and CEO Frederic C. Dybuncio said their portfolio business with high growth potential are led by the power generation and logistics businesses.

“These are the two key portfolio companies, which we continue to really focus on and grow, because we believe that potential is there. And for these portfolio companies that we invest in, before we invest in them we to ask ourselves, is this business scalable? Is it going to be scalable enough for us to be able to achieve either one or number two position in that sector? If that the answer to those is yes, then we invest in these companies,” he said.

DyBuncio noted that “our three core businesses, retail, property and banking, despite their individual sizes being so massive already, will continue to grow and we are in expansion mode.”

“But in addition to that, the high growth sectors are what we are really focused on, that we’re going to be investing and be growing in this years,” he added.

DyBuncio also noted that, for the logistics business, SMIC is increasing unit 2Go Group’s fleet of ships with the delivery of two new vessels last December and January, bringing the company’s fleet to 10 cargo and passenger vessels with plans to acquire an additional vessel.

As far as the geothermal business is concerned, he said that Allfirst Equity Holdings Inc., which holds interest in the Tiwi and MakBan geothermal steam fields in Albay and in Laguna-Batangas areas is looking to develop six more wells, which could boost the company’s bottomline in the next five years.

Allfirst is the holding company for Philippine Geothermal Production Co. Inc. (PGPC), which generate geothermal steam sufficient to produce approximately 300MW of electricity. With the new wells, PGPC eyes to hit 420MW dependable capacity in the medium term.

DyBuncio also said that SMIC is venturing into the data center business by partnering with a group that has a landbank for putting up a large data center facility in Batangas.

He explained that the data center venture will capitalize on the boom of the artificial intelligence (AI) that requires massive infrastructure.

“Given the AI coming in, there’s going to be more need four servers to store all of this data. And in a lot of the other countries in the region, and even in Europe, they’re now trying to limit the data centers,” DyBuncio said.

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The article was originally published in Manila Bulletin and written by James A. Loyola.