JG Summit bumps up capex to P88 B, bulk for petrochem
JG Summit Holdings Inc., the investment holding company of the Gokongwei Group, is hiking its capital expenditure budget this year by almost 30 percent to P87.5 billion as it expands some of its business segments.
During the company’s annual stockholders’ meeting Thursday, JG Summit president and chief executive officer Lance Gokongwei said the firm will spend P87.5 billion this year, higher than the P68.3 billion spent last year.
Gokongwei said its JG Summit Petrochemicals Group will get the largest capex allocation this year at P32.4 billion, in line with its continued expansion.
“We’re investing a billion dollars (in petrochemicals). We expect that by 2020, we would expand our naphtha cracker from 320,000 tons to 480,000 tons,” Gokongwei said.
“We’re likewise expanding our polypropylene facilities. We are also putting in additional bimodal polyethylene, butadiene and BTX (benzene, toluene and xylene) facilities,” he added.
Gokongwei added that at present, the company is exporting its pygas to other countries since it doesn’t have a butadiene and BTX factory.
“So we’ll be the first facility in the Philippines to have the butadiene and BTX production facilities. That will help expand the value added in the Philippines,” he added.
Following its petrochemicals business, its airline Cebu Pacific will also get a significant capex allocation of P27.1 billion this year as it continues to work on its upsize strategy with the addition of more fuel efficient aircraft.
JG Summit’s property development arm, Robinsons Land, will get a capex budget of P18.1 billion, while its food business Universal Robina Corp. will receive an allocation of P9.1 billion.
Gokongwei disclosed that the company is also targeting some fundraising activity this year, proceeds of which will be used to refinance maturing debt.
“I believe we have a P24 billion debt at the parent company level which is maturing in August. So we expect that we will need to refinance about P15 billion of that,” he said.