Ex-OFWs to build Bulacan airport
DEMAND AND SUPPLY - Boo Chanco (The Philippine Star) - October 9, 2020 - 12:00am

In the midst of rising unemployment, former OFWs are being tapped by San Miguel to help build the Bulacan international airport. They have already hired some 500 senior engineers who will supervise construction in-house.

In a Zoom conversation with SMC’s Ramon S. Ang last Tuesday, he told me that they are prioritizing former OFWs because SMC can lean on the vast experiences  of OFWs who have worked abroad. Many have helped build new airports while employed with reputable engineering firms.

Mr. Ang said they would break ground on the airport this month and would start to build field offices and staff housing. He promised partial use of the airport in five years, with the completion of two out of four runways.

The whole airport construction will take six years. He thinks the aviation market will be at its pre-pandemic levels by the time the Bulacan airport is ready.

I asked him if he crunched his numbers again to check the viability of the airport in the wake of the pandemic and its effects on air travel. He said he did, “We crunch our numbers all the time to make sure we will spend wisely.”

Mr. Ang said the pandemic has made the financial aspects of the airport even more compelling. Cost of materials is down… so with construction equipment. He has contracted most of the materials they will need from aggregates to steel, to cement, etc.

They are also about to start on related infrastructure such as the expressways leading to the airport, notably the Bay Shore Expressway that connects to Roxas Boulevard. The Pasig River Expressway will break ground next month and will  be ready even before the airport is inaugurated.

In other areas of interest to San Miguel, Mr. Ang said their main product, beer, has suffered the double whammy of increased taxes and decreased sales from the pandemic liquor ban, but they will still clear P20 billion in beer sales this year.

Food in general, he said, is doing well. They are introducing new food products, including vegemeat that pretty much simulates hotdogs, hamburgers, meat balls, etc. To take advantage of the demand for no frills cooking at home, they have ready-to-eat favorites, including kare kare, paksiw na lechon, chicken karaage and adobo.

Mr. Ang said they had cancelled an early plan to import rice under the new law and chose instead to buy rice from local farmers. Their agribusiness unit is even more actively involved with assisting farmers improve productivity and buying their produce.

He sounded disappointed with the power sector, saying it has become crowded lately. And, we might add, with low spot market prices too.

As for the massive losses of Petron, he explained that it couldn’t be helped because of the sharp drop in world market prices. Unlike their competitors who just buy finished products, Petron keeps a large inventory of crude oil. That opens them to inventory losses when the price of the crude in their storage tanks slumps overnight.

Petron’s competitors can turn around immediately and sell the products, while Petron must still process/ refine and that takes about 30 days. Any change in the price of finished products is also reflected weekly at the pump, minimizing inventory loss risk for Petron’s competitors.

And, Mr. Ang complained, Petron gets taxed more compared to its competitors. Actually, Petron should get a tax break for providing national strategic supply. To be totally dependent on the spot market for finished products puts us in danger of supply disruption because of geopolitics or OPEC decisions.

Mr. Ang said he would ask for the same tax treatment as the importers, wherein tax is levied on the final output, not the raw materials, to allow Petron to compete with the importers on an equal footing.

Otherwise, RSA said, he would consider closing the refinery, following what Shell recently did.

A recent feature in Tatler quoted Mr. Ang best on his business philosophy on why he is investing fearlessly during this pandemic era.

The direction he wants to take, he said, is not just all about business. “I want to leave our country better than when I found it, one where more Filipinos take part in, and benefit from economic growth.

“All our work in San Miguel is geared towards achieving that – our investments in manufacturing capacities across several regions nationwide; our infrastructure projects that aim to unlock the economic potential of regions and accelerate trade and tourism, and make people’s everyday lives easier.

“All of these are designed to enable growth, create jobs and make our local and national economies stronger, more resilient,” he said.

As for challenges, “In infrastructure, for example, right-of-way issues usually cause delays. This was true with our Skyway Stage 3, the TPLEX and the MRT-7 Project.

“Building new manufacturing facilities for our beverage and food businesses also poses inherent challenges. This pandemic has caused a slowdown in practically all our ongoing projects. But overall, I am glad that over the years, our businesses have gotten pretty good at execution.

“We have good relationships with stakeholders such as the government, as well as communities, and we can work through difficulties. It just takes some time.”

RSA has put the money of San Miguel stockholders, as well as his own, where his mouth is. With no business pedigree, unlike most of his peers who inherited their wealth and corporate positions, he said what keeps him going is the difference his projects make on the lives of people.

As I wrote a few weeks ago, he is one taipan so different from the rest. His peers privately sneer at him and say he is not focused on delivering maximum profits to his shareholders.

“I have fiduciary responsibility to my shareholders,” a conglomerate head responded to my question on why the open parks in his premier property development are turning into buildings.

Mr. Ang has expanded his fiduciary responsibility beyond shareholders to cover the broader community because it is this community that keeps the business going.

 

 

Boo Chanco’s e-mail address is bchanco@gmail.com. Follow him on Twitter @boochanco

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