JG Summit hikes capex to P48B for this year

JG Summit Holdings Inc. (JGSHI) has increased its capital expenditure (capex) to P48 billion for this year up 13 percent from last year’s P41.9 billion. 

JG Summit President and CEO Lance Gokongwei said during the company’s annual stockholders’ meeting the firm spent P9.3 billion in the first quarter out of its capex budget for this year.

On the sidelines of the shareholders’ meeting, Gokongwei told reporters that P18 billion to P20 billion of its capex would be budgeted for its airline business, P15 billion for property, P7 billion for its food unit, P300 million to P400 million for its banking unit, and the rest is for its petrochemical facilities.

He said the company was bullish in its petrochemical business as it eyed five projects for this segment.

Two of these are expansions of existing plants and three new facilities for polyethylene, butadiene, and aromatic.

JG Summit Petrochemicals Group is investing $700-million in its manufacturing complex in Batangas.

Engineering, procurement, and construction contracts will be awarded this year, with the expansion due for completion by 2021, Gokongwei said.

The existing $1.3 billion plant will increase its naphtha cracker facility’s capacity and polypropylene production by half.

It will also produce new products, including aromatics and butadiene, for export to other parts of Asia.

JG Summit’s bolstering of its petrochemical unit comes as San Miguel, the largest conglomerate in the Philippines, prepares to build a $15 billion to $20 billion integrated petrochemical facility later this year.

JG Summit is owned by the Gokongwei family, and also has interests in banking, power, and telecommunications. The family also owns Robinsons Retail Holdings, the nation’s second largest retailer with multiple formats, including department stores and supermarkets.

Recently, JG Summit invested $25 million in Garena, a Singapore-based online game and social platform. Garena rebranded itself as Sea in May. According to Gokongwei, the involvement will give the group a better understanding of online business. RIZA LOZADA