MANILA, Philippines - Conglomerate JG Summit Holdings Inc. aims to maintain its leadership in the Philippines as it gears up the expansion of its footprint in Southeast Asia.
The listed investment firm of tycoon John Gokongwei Jr. is banking on continuous growth of per capita income and consumer purchasing power for its different business segments.
“(JG Summit) will retain its focus on the Philippines as its core market while looking for opportunities to develop the group’s branded foods, real estate and air transportation businesses in the Asean region and in China,†the company said in a prospectus submitted to regulators in line with plans to raise P30 billion through a bond offering.
“With its consumer-centric focus, (JG Summit) believes that the Philippines has strong growth potential due to the country’s population of over 93 million and growing income per capita and consumer purchasing power,†JG Summit said.
JG Summit is into budget airline (Cebu Pacific), property (Robinsons Land Corp.), banking (Robinsons Bank Corp.), petrochemicals (JG Summit Petrochemicals Corp.), and snacks and beverage (Universal Robina Corp.).
The holding firm has already charted its growth plans for its airline, property and snacks businesses.
“(JG Summit) believes that its focus on Asian consumers and its value approach has positioned the company to achieve its growth targets, notwithstanding fluctuations in economic cycles,†JG Summit said.
For instance, branded foods arm URC targets to continue growing organically in the international markets while pursuing strategic acquisition opportunities.
“URC will launch new innovative products, flavors and formats on a regular basis and seeks to capitalize on the strength of the Jack n’ Jill brands when launching products in underserved segments of the branded foods market,†JG Summit said.
URC will also launch new products to fill out the product pipeline in countries where it already has a distribution scale, it added.
Profit improvement initiatives in the procurement, manufacturing operations and supply chain are also in the works to strengthen the distribution capabilities in general trade in international operations, URC said.
So far, URC is the leader in branded snacks with a 39 percent market share locally, 36 percent for candies, 23 percent for chocolates and 81 percent for ready-to-drink tea. It is the company behind brands like Jack n’ Jill, Hunt’s, C2, Blend 45, Uno Feeds and Cream All.
For the air transport business, JG Summit said Cebu Pacific is on track to increasing its fleet from 47 aircraft to 62 by 2017. On top of this, 30 new A321neo will be delivered from 2017 to 2021.
Locally, Cebu Pacific is pinning its hopes on the Philippines’ lowpenetration of air travel, archipelagic geography and increasing remittances.
Cebu Pacific corner 50.5 percent of the domestic passengers carried as of first half last year.
For its part, property firm RLC said it is expanding the commercial centers division by building seven new shopping malls and completing one mall in fiscal year 2014.
“RLC plans to expand its office buildings division by completing the construction of two office buildings before the end of fiscal year 2013 and by locating its office buildings close to its shopping malls to take advantage of retail and other synergies,†JG Summit said.
“RLC will also focus in sustaining its sales levels and seek out joint ventures with reliable partners in order to access new properties,†the company said.
RLC operates under four brands: Robinsons Luxuria for the high-end market, Robinsons Residences for condominiums in central business districts, Robinsons Homes for house-and-lot developments in provinces and Robinsons Communities for the middle income segment.
Budget hotel chain Go Hotels is also planning to put up three new branches across the country every year, particularly near shopping malls.
In the nine months to September, profits of JG Summit slipped 21.8 percent to P8.41 billion from P10.76 billion a year ago due to depreciation of the peso against the dollar.
JG Summit plans to raise P30 billion from the bond market to partly finance the purchase of P72 billion worth of minority stake in power distribution giant Manila Electric Co. (Meralco).