Vol. XXII, No. 190 [ BusinessWorld Online ]
Thursday, April 30, 2009 | MANILA, PHILIPPINES
THE PUBLICLY listed holding company of the Sys remains in the expansion mode amid resilient domestic demand, while grooming itself to be a dominant player in the tourism and entertainment sector.
"We will pursue our expansion plans for this year with greater focus on areas that we think can make us stronger when the crisis passes," said Harley T. Sy, president of SM Investments Corp., in yesterday’s stockholders’ meeting.
SM Investments has set aside P31 billion this year to expand domestic and China businesses, up from last year’s P24 billion.
Of the amount, P12 billion will be spent for mall operator SM Prime Holdings, Inc.; P7.2 billion for SM Development Corp.; P5.1 billion for SM Hotels Corp.; and P1.6 billion for the Hamilo Coast property development in Batangas, among others.
"There are still a lot of opportunities that we see [as long as] remittances [from overseas workers] remain strong and business process outsourcing remains stable," Executive Director Gregory L. Domingo said.
SM Investments Director Jose T. Sio said the company remains optimistic since "the [group’s] overall revenue is still in the growth pattern," pointing out that bottom line is expected to grow by 12% to 14% this year.
Profits last year grew by 15.6% to P14 billion with retail operations contributing a huge chunk. SM Investments expects this to continue by opening 14 branches of the SaveMore supermarket, two SM Supermarkets, four SM Hypermarkets, and two SM Department Stores on top of existing 97 retail stores in the country.
"We will maintain our strength in servicing the middle market which could be the least affected by the crisis [and at the same time] target the upscale market which may be feeling the impact of the crisis and switch to buying value items," Jorge T. Mendiola, senior vice-president of SM Retail, Inc., said.
Jeffrey C. Lim, executive vice-president of SM Prime Holdings, said there were still "opportunities" in Metro Manila given the density of its population.
SM Prime will open tomorrow its 34th mall in Naga, the first SM mall in the Bicol region. Aside from SM Naga, the group will open two other malls this year — SM Pamplona in Las Piñas and SM Rosario in Cavite. The mall operator is also opening the Skygarden at SM North EDSA and expanding SM Supercenter Rosales.
"Our main thrust right now is to protect and possibly increase our market share," Mr. Lim said.
Unit Banco de Oro Unibank, Inc. on the other hand is planning to redeploy its remaining 37 branch licenses in "high-growth" areas, which will bring the bank’s network to over 700 branches, one of the largest in the country.
"The lending and deposit-taking businesses should continue to prosper this year. We just have to be more prudent in assessing credit risks. Service businesses generating fees should also remain buoyant," bank president Nestor V. Tan said.
China Banking Corp., the group’s commercial bank, plans to open 58 branches nationwide, bringing total branches to 272.
"We expect this year to be a critical period ... it is also the right time for China Bank to go back to the basics of banking," China Bank President Peter S. Dee said.
Other plans for the group’s units include the launching of four residential projects under SM Development, while expanding existing hotels.
"The hotel and entertainment [segment] is still expected to grow ... It is hard to put a number since it is still at its infancy stage [but] we will maximize the usage of the landbanking that we have," SM Investments Vice-Chairman Teresita T. Sy said.
The holding company has over 7,000 hectares of land which should sustain operations for the next 30 years, she added.
"The group plans to capture the international market [especially] Asia and at the same time cater to all segments of Filipinos. We want to capture the tourism industry," Mr. Sio said. — Kristine Jane R. Liu
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