Exciting future for SMC

For a local conglomerate well on its way to surpassing the P1 trillion mark in terms of revenues, it’s all about grabbing business opportunities as they come along.

“Looking back, yes, we have missed good opportunities. But now, we are keen on projects with national significance,” according to San Miguel Corp. president Ramon Ang.

One such project is his proposed P735-billion new international airport in Bulacan. The NEDA board, which earlier gave its approval to the proposal, has scheduled to take it up for a second pass this week. Once approved, it will be subject to a Swiss Challenge being an unsolicited proposal. If it survives the challenge, it can be operational five years from approval of all government permits needed.

The project involves building a new gateway in Bulacan over a 2,500-hectare property with six runways that can handle up to 100 million passengers a year.

As part of the proposed revised concession agreement, government has agreed to undertake the needed right-of-way acquisitions (expropriation being a power that can be exercised only by government) while SMC will shoulder the costs, including those for local government permits.

Another much-awaited infrastructure project by SMC is its Skyway Stage 3 connector road project which Ang said will be ready by December of next year. The project’s cost has increased by P10 billion to P55 billion-P56 billion due a slight change in the original design. The SMC chief executive revealed that he expects the few remaining right-of-way problems (involving six landowners from a high of 56) to be resolved soon.

The Skyway Stage 3 project is a six-lane elevated expressway extending 17.54 kilometers from Gil Puyat in Makati to Balintawak in Quezon City.

Then there is the Tarlac-Pampanga-La Union Expressway (TPLEX) whose last exit in Rosario, La Union is expected to be opened by July 2019. SMC has submitted a P24-billion proposal to extend TPLEX by 56 kilometers from Rosario to San Juan, but what is more exciting for me is the proposal to extend it another 400 kilometers all the way from Rosario to Laoag, Ilocos Norte. Imagine how much travel time to the far North will be reduced once this materializes. No more 10-hour travels.

For those living in Quezon City, we are particularly excited about the MRT-7 project which according to Ang will be ready by 2020. He said that will there are a few right-of-way problems remaining, everything seems to be going as planned. There are plans to loop this to the proposed airport which will make it very convenient to go to the Bulacan airport. “Everything will be interconnected,” he said.

Ang is also looking forward to increased business for the Manila North Harbor project, especially after ICTSI acquired a 50 percent stake. Once ICTSI completes the transaction which is still subject to approval of the Philippine Competition Commission, the remaining 43.3 percent share in Manila North Harbor Port Inc. (MNHPI) will be held by San Miguel Holdings, 6.5 percent by IZ Investment Holdings, and 0.17 percent by Petron. MNHPI has a 25-year concession to operate, manage, and maintain North Harbor.

With ICTSI as partner, Manila North Harbor will soon no longer service only domestic cargo but will soon handle international cargo as well.

Meanwhile, as part of its sustainability efforts, SMC has exited the plastic bottled water business under the “Purewater” brand. This does not mean though that SMC will no longer be selling bottled drinking water. It will be back, this time using returnable regular glass bottles.

Ang revealed that they will be introducing into the market soon flavored water without carbonation contained in these glass bottles.

But even with his hands already full, Ang is still looking at other projects. One of this is going into palay importation, especially after President Duterte announced that he will lift quota restrictions on rice imports. However, to remove the quantitative restrictions, RA 8178 or the Agricultural Tariffication Act has to be amended. Senate Bill 1998 has already been approved lifting rice import restrictions which will be replaced by tariffs.

SMC’s top honcho is confident that once San Miguel goes into palay imports, the price of rice domestically will go down significantly.

Off hand, he is thinking of choosing three sites (SMC has 18 sites for its animal feed production) where he can install six silos each that can receive the imported rice. Importing rice fits well into SMC’s current business. Ang says the broken rice can be used in SMC’s breweries for fermentation while the rice husks can be used for the power plants. He explained that rice husk has the same heating value (4,000-45,000 kcal) as low-grade coal.

He prefers to import palay rather than rice because the milling of palay into rice produces rice bran which is used in poultry feeds and the husk for fuel.

Many of SMC’s new power plants are equipped with circulating fluidized bed boilers which can utilize not only coal but rice husks, sewage waste, and even old carpets and clothes, he said.

Speaking of sewage waste, SMC has already submitted to the DPWH an unsolicited proposal to build a P3-billion bridge connecting Caticlan to Boracay Island. The bridge, which will be around 890 meters, will have a pipe that can bring sewage and waste from Boracay to Caticlan, and transport fresh water from Caticlan to Boracay. To recover its investment, SMC will charge a fee for vehicles and pedestrians using the bridge, and well as the waste, sewage, fresh water and even power lines that will be passing through it.

SMC, which is operating the Caticlan Airport, also plans to build two hotels near the airport that will have 1,000 hotel rooms, half of which will be completed next year, and the rest in 2020.

There are also plans by SMC to put up a world-class waterpark next year and according to reports, Disneyland Park of South Korea will be involved in the design and construction. The waterpark will also have its own hotel.

As for his NAIA Expressway, which is built at a staggering cost of P20.45 billion, Ang said they are finally seeing light at the end of the tunnel especially now that daily traffic has increased. Though it will probably take 20 years before SMC recovers its investment, Ang said they undertook it as part of their share in nation building.

He plans to remove the cash lane at NAIAX soon because this has been causing traffic and will require all users to install RFID stickers which they can get for free.

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