DMCI sets sights on new acquisitions

MANILA, Philippines — Diversified engineering conglomerate DMCI Holdings Inc. of the Consunji family has set its sights on its next acquisition targets following a recent deal to purchase a majority stake in Cemex Philippines.

While it is still hard to say what the group’s next acquisition will be, DMCI Holdings chairman, president and CEO Isidro Consunji, said there are a few which the group is looking into.

“We’re currently looking at large mining assets, probably copper and gold, and maybe an additional coal mine in Mindanao, if possible, provided it’s open pit,” Consunji said during the company’s annual stockholders’ meeting yesterday.

“Aside from that, we just intend to continue with our aggressive organic growth,” he said.

The Consunji Group has a diversified investment portfolio consisting of construction, real estate, coal and nickel mining, power generation and water distribution.

Last month, the group, through DMCI Holdings, Dacon Corp. and Semirara Mining and Power Corp., signed a share purchase agreement with CEMEX Asia B.V. to acquire its entire holding of 42.14 million common shares in Cemex Asian South East Corp. (CASEC) for $305.6 million.

CASEC is the majority owner of Cemex Holdings Philippines (CHP), the country’s fourth-largest cement manufacturer.

“This acquisition marks the start of a new era for our company after a decade-long focus on organic growth. To recall, our last acquisition was in 2014 when we acquired our nickel assets,” Consunji said.

Consunji said that while Dacon intends to issue a mandatory tender offer for the CHP minority shareholders within the year, the group has no intention to privatize the cement business.

“We believe that maintaining its public status offers greater financial flexibility and enhances our credibility in the market,” Consunji said.

“Despite a relatively soft market environment for cement, we believe the attractive purchase price and anticipated increase in infrastructure activities make this a sound investment,” he said.

Consunji said the acquisition of CHP should also help rebalance the group’s portfolio.

In terms of the key challenges expected by the group over the next couple of years, Consunji said one of them is the inventory management of DMCI Homes.

“Because of the pandemic, we have some excess supply of finished units that are currently being sold,” he said.

“At the moment, DMCI sales are going to be slightly below pre-pandemic level. But they expect by 2025, with the leisure projects and other income market segments, upper and lower market segments, DMCI Homes will exceed pre-pandemic levels of sales,” Consunji said.

Meanwhile, permitting for its nickel projects has also been identified as a key challenge for the group as they have various nickel assets that are not being operational and waiting for the perfection of the required operational licenses and permits.

“So hopefully, two areas in particular, one in Zambales and one in Brooke’s Point Palawan should be operational before the end of this year,” he said.