SMC eyes venture into electronics manufacturing

DIVERSIFIED conglomerate San Miguel Corp. (SMC) is now looking at expanding into electronics manufacturing, as it sees continued growth in demand for smartphones and other electronic devices.

“Nine years after our diversification, ( it has been) very successful. So the next phase has to go into that third phase of our business which is to go into the next generation of electronics microchips,” SMC President and Chief Operating Officer Ramon S. Ang told reporters after the stockholders’ meeting of Top Frontier Investment Holdings, Inc. on Wednesday in Pasig City.

Top Frontier is the largest stakeholder in SMC with a total share of 66.14%.

Originally a food and beverage company, SMC started diversifying its portfolio in 2008, with forays into infrastructure, energy, and fuel and oil.

“Ang diversification ng SMC magandang-maganda na. Tingnan mo yung Petron, oil refinery, petrochemical. Maganda na takbo, pati power business, infrastructure, tollway… gumaganda na. So next business ano ba maganda na malaki ang margin, malaki ang demand sa mundo?… Microchips, electronics,” Mr. Ang said.

The tycoon cited the electronics business of South Korean giant Samsung Group as an example.

“The third wave of expansion, if we can convert San Miguel into the next generation of electronics, similar to that of Samsung — microchips, tablets, smartphones, smart televisions. That’s our aspiration, how to go into the next one,” Mr. Ang said.

However, Mr. Ang declined to give a timetable for the electronics manufacturing venture, but noted this will be another leg of growth for the company.

By 2020, SMC targets to triple its net income to P150 billion, as it sees the completion of major tollway projects and finalizes payment for the purchase of three power plants.

Earnings of the conglomerate soared to P52 billion in 2016, 80% higher than the P28.99 billion it delivered a year ago.

For the first quarter of 2017, SMC netted P13.82 bilion, 2.13% higher than its earnings of P13.54 billion in the same period in 2016.

NICKEL PROCESSING

Mr. Ang also said that Top Frontier will be finishing the feasibility study for its $1.5-billion nickel processing plant by the end of this year. The plant, located in its Nonoc nickel mind in Surigao del Norte, will be able to produce 200,000 tons per year.

“’ Pag natapos dun, then yung technical and financial study, ’pag okay yung feasibility. Then we will go for financing,” he said.

While the company is banking on the feasibility of the project, Mr. Ang said they are concerned about the sensitivity of global nickel prices.

“Titingnan yung sensitivity, at low price kung kumikita yun then tuloy,” he added.

On Wednesday, shares in Top Frontier closed 20 centavos or 0.07% lower from the previous trading day to P303 apiece, while San Miguel shares fell 30 centavos or 0.29% to close at P103 apiece. —