SMIC STAYING AHEAD MEANS BIG DATA GAMBIT
Data centers are facilities centralizing an organization’s shared information technology operations and equipment to store, process and disseminate data and applications.
Among the goals of the SM group, through flagship SM Investments Corp., or SMIC, is to stay ahead of the curve by embracing the role of technology shifts in the business world. Advanced computing infrastructure like data centers, from an option, has become an imperative for adaptation. SMIC president and chief executive officer Frederic C. DyBuncio saw the growing need for large data storage for businesses to survive in a fiercely competitive global environment.
DyBuncio, a veteran investment banker, was appointed to his post in 2017 as part of the Sy family’s efforts to introduce professionals to the group’s leadership. DyBuncio is the first such executive to head SM Investments, the parent company.
To assist the SM Group in its digital transformation efforts and enhance its operations, SMIC has placed a huge bet on data centers.
This year, with DyBuncio at the helm, SMIC is en route to greater heights with a brand-new mindset and focus.
In an interview, DyBuncio revealed that the company is currently in discussions with potential operators for the data center facilities it plans to build. “Right now, our focus is growing what we already have because we feel there is so much growth potential that these companies can deliver, but we are continuing to look as well at other opportunities out there. For example, we are looking into data centers,” DyBuncio said. “Because of artificial intelligence, or AI, there is a greater need for servers to store data,” he added. Data centers are facilities centralizing an organization’s shared information technology operations and equipment to store, process, and disseminate data and applications.
Since they house critical assets, data centers are important in sustaining the daily operations of a company.
Unique model
Unlike the end-to-end data centers followed by telecommunication giants like PLDT Inc. and Globe Telecom Inc., DyBuncio said the model that SMIC plans to follow in the particular business is somehow different.
“We’re building the cold shell and then we will look for operators to come in and manage it themselves. We just build the shell for them with all the telco, water, power, generator — that’s the model we are looking at. We are talking to several locators,” he said.
“We will probably get something up within the year,” he added.
Rosy outlook
SMIC’s foray into data centers aligns with its diverse portfolio of investments, which remarkably contributed 9 percent to the group’s total profits of P77 billion last year.
The anchor company in the group aims to increase the contribution of its portfolio businesses to overall profits over the next five years. This growth will be driven by the strong performance of 2GO’s shipping business, Belle Corp.’s leisure and entertainment business, and Goldilocks Bakeshop, among others.
“We are hoping to be able to grow that maybe in the teens level. That is our objective. Again, it grows but the core also grows so it’s gonna be a challenge to grow it to the teens. Over the next five years, we should be able to grow our portfolio business to teens as far as revenue and income contribution are concerned,” according to DyBuncio.
“We are investing more in logistics, with some new ships, we are expanding our network nationwide, that’s gonna be a big driver for us,” he added.
Harnessing renewable energy will be the group’s new frontier. “SM is committed to clean energy by increasing its capacity to provide steam. The Philippines’ location within the ‘Ring of Fire’ provides a huge opportunity for a low-carbon source of power,” DyBuncio said.
SMIC is investing P3 billion annually to build an additional 300 megawatts or MW of geothermal power facilities through its whollyowned subsidiary Philippine Geothermal Production Company Inc. or PGPC.
PGPC will increase its geothermal capacity to around 600 MW with its new exploration projects in Kalinga, Daklan and Cagayan in Northern Luzon as well as Mount Labo and Malinao in Southern Luzon.
SMIC said these projects of PGPC support the government’s goal to increase the share of renewable energy
“SM remains committed to sustainability through investments in renewable energy that serve more communities nationwide as part of a wider range of initiatives of SM Green Movement.”
2GO branches out
DyBuncio also heads the conglomerate’s logistics and transport unit 2GO Group Inc. which is the largest end-to-end transportation and logistics provider in the country.
At its core are five business units, namely 2GO Sea Solutions, 2GO Special Containers and Value-Added Services, 2GO Express, 2GO Forwarding, and 2GO Logistics.
Early this year, it opened its 100th 2GO-owned retail store at Greenhills Shopping Center, extending its services closer to consumers, entrepreneurs, and nearby residents.
SMIC has businesses in the retail, banking, and property sectors. It also invests in ventures that capture high growth opportunities in the emerging local economy.
Its retail operations are the country’s largest and most diversified, consisting of grocery stores, department stores, and specialty retail stores.
Meanwhile, Goldilocks Bakeshop set an ambitious plan to build 60 new stores this year to widen customer reach. Last year, Goldilocks opened 41 stores, which brought its total to 926 stores nationwide, with over 40 percent of new locations situated in Visayas and Mindanao.
SMIC’s property arm, SM Prime Holdings Inc., is also the largest integrated property developer in the country with interests in malls, residences, offices, hotels and convention centers as well as tourism-related property developments. It also holds interests in banking through BDO Unibank Inc., the country’s largest bank, and China Banking Corp., the fourth-largest private domestic bank.
To assist the SM Group in its digital transformation efforts and enhance its operations, SMIC has placed a huge bet on data centers.