JG Summit allots P35 B for capex

MANILA, Philippines - JG Summit Holdings Inc. has earmarked P35 billion for capital expenditures (capex) this year to fund investments and working capital of its operating units.

This year’s spending will be lower than the P44.2-billion capex allocated last year and will be the same amount as that spent by the conglomerate in 2013.

“It will be lower this year because we were almost at P50 billion last year. It’s mainly for the airline, the property, and Universal Robina Corp. (URC),” said Bach Johann Sebastian, JG Summit senior vice president and chief strategist in an interview on the sidelines of the Latham & Watkins annual investment conference yesterday.

Sebastian said the capex budget this year is lower because the holding firm’s petrochemical unit has already completed construction of its $800-million naphtha cracker plant in Batangas.

“The naphtha cracker is already running. It is already booking revenues, but it is not yet operating at 100 percent,” he said.

By next year, Sebastian said the plant is expected to start pouring in $800 million to $1 billion in revenues annually.

JG Summit has business interests in food and beverage through URC, real estate development through Robinsons Land Corp., air transportation through Cebu Air Inc, as well as in petrochemicals and banking.

Sebastian said the holding firm of the Gokongwei family remains in the lookout for acquisitions in businesses which it has core competency such as in food, property, airlines and banking.

“We’ve done all our funding this year. Unless we buy or enter into something this year, we don’t need any more funding,” he said.