SM Investments names Sio as chairman in leadership revamp

SM INVESTMENTS Corp. (SMIC) is ramping up portfolio investments in infrastructure and energy, after announcing a leadership revamp that saw nonmembers of the Sy family take top management positions to lead the conglomerate’s next stage of growth.

SMIC on Wednesday named long-time chief financial officer Jose T. Sio, the trusted lieutenant of founder Henry Sy, Sr., as chairman of the board, saying the CFO of 26 years was “highly instrumental in supporting the phenomenal growth of SM and its subsidiaries.”

The 93-year- old Mr. Sy, the country’s richest man, was appointed as chairman emeritus.

The company also named banker Frederic C. DyBuncio as president, replacing Harley T. Sy, who will remain as executive director of the board.

“The mandate from the Sy family is to make the company grow,” Mr. Sio said at a press briefing after SMIC’s annual stockholders’ meeting on Wednesday.

To fulfill its mandate, Mr. Sio announced plans to expand beyond its core businesses of property, banking and retail and increase the group’s presence in infrastructure and energy to take advantage of opportunities amid the Philippine economy’s continued expansion.

“Infrastructure and energy are the industries that can complement our three core businesses,” he said, adding investments in these areas will not just be in equity but also in financing.

“Our banks, both BDO and Chinabank, are looking on financing a portion of these industries,” he added.

SM has submitted unsolicited proposals to the government to develop a $50-billion airport in Sangley in partnership with Solar group’s All-Asia Resources and Reclamation Corp. and to construct a P25-billion elevated tollway linking SM Mall of Asia in Pasay City to Sta. Mesa, Manila through a joint venture with Ayala Corp.

While the Philippine economy continues to be the “darling” of Southeast Asia, thanks to remittances from overseas Filipino workers and its robust business process outsourcing sector, Mr. Sio said this is not sustainable.

“We look at where SM is going in the next five years, where the Philippine economy is going... That should not be a long-term policy of the government, OFWs have their cost, social cost to country,” he said.

The BPO industry is also facing challenges from new technologies, as well as US President Donald J. Trump’s protectionist policies.

Mr. DyBuncio, who joined the company in 2011 to lead its portfolio investment division, said SMIC still plans to keep property, retail, and banking as its three core businesses.

“We look for opportunities as they come out of the market, businesses that will be good for the group. But the core will still be the core, looking forward,” said Mr. DyBuncio, who has over 20 years banking experience with JP Morgan Chase.

“Each of those companies under those groups are really on their own rights are already of size and have very strong consumer relations as well,” he added.

SMIC’s portfolio now includes Belle Corp., Atlas Mining, CityMall Commercial Centers, Inc., Philippines Urban Living Solutions, Inc., the Net buildings and most recently, the 2GO Group, Inc.

With SMIC entering the logistics business via its 2GO investment, the company is also preparing to foray into e-commerce.

Mr. Sio said the company is prepared for e-commerce, but the market and the infrastructure are not yet ready.

“As the economic growth gets pushed to the provinces, logistics is needed to go nationwide. As consumer power increases, we deliver more growth to the products,” Mr. DyBuncio said.

REORGANIZATION

The key organizational changes leaves SMIC’s senior management team without a member of the founding Sy family.

Aside from Harley T. Sy as executive director of the board, siblings Teresita T. Sy-Coson and Henry T. Sy, Jr. remain as vicechairpersons.

“It is an indication that the family would like to professionalize the management of the SM group in preparation for the future,” Mr. Sio said.

He also noted that the group is now preparing the third generation of Sys for the next phase of expansion.

“They are more or less immersed with the SM group. We are preparing for them to take positions in the near future.”

Shares in SMIC went up P4 or 0.55% to close at P731 apiece on Wednesday.