SMC’s industrial park good for the economy

CEBU, Philippines — San Miguel Corp.'s (SMC) plan to build an industrial estate bodes well for the thriving local consumer market.

"I believe SMC’s plan to develop an industrial estate bodes well not just for Metro Cebu but also for the entire economy of the Central Visayas region," Joey Bondoc, research manager at Colliers International said.

"The industrial estate will house a  processed foods plant and this is a strategic move given that Central Visayas is one of the fastest growing regions in the country," Bondoc told The FREEMAN yesterday.

He believes the diversified conglomerate's food manufacturing facility "immediately captures a thriving local consumer market."

Last week, SMC announced it plans to build an industrial estate in Mandaue City, an important move to support the company's expansion in key regions nationwide.

SMC said the project will be jointly undertaken with the city council of Mandaue.

The industrial estate would house a processed foods plant, feed mill, and other manufacturing facilities. It will also have its own port terminal.

"We look forward to growing our presence in Mandaue City. This major development is an important part of San Miguel's current expansion in key regions nationwide," SMC president and chief operating officer Ramon Ang earlier said.

"Our aim is to support and accelerate our country’s economic development by investing in strategic and emerging growth areas. With this investment, we hope to help accelerate the city’s and the region’s overall growth and bring more jobs to our countrymen here," he added.

Moreover, Colliers' Bondoc said: "It is no longer surprising to see other firms such as SMC developing industrial space in Cebu given the sustained demand for industrial park and facilities buoyed by the Philippines’ thriving manufacturing and export sectors."

He said he sees the economic impact of SMC’s industrial park spilling over to office, residential, and retail segments.

"We also expect the logistics and warehousing sector to benefit from the SMC project. Eventually, these should result in more employment opportunities for Cebuanos," he further said.

"Greater trade with other Southeast Asian economies should also be facilitated by ASEAN integration and SMC’s development of its own port terminal. SMC’s strategic location captures both local and foreign markets," he said.

More developers and conglomerates are building industrial parks and Colliers attributes it to the Philippines’ rising status as an industrial hub in Asia.

A report recently released by the US State Department noted that the Philippines is becoming a more attractive destination for foreign investment on the back of a growing middle class and a “fairly stable political environment."

Meanwhile, the latest United Nations Conference on Trade and Development (UNCTAD) survey ranked the Philippines as the seventh most attractive destination for foreign direct investments out of 15 developing and developed economies.

"SMC is definitely cashing in on the rosy growth prospects of the country’s industrial sector," he said.

In the first half of 2017, SMC's net income reached P26.1 million, down 26 percent from the P35.3 billion recorded in the same period in 2016, due to foreign exchange effects and a one-time gain from the sale of its telecommunications assets in 2016.

Without the two factors, San Miguel's recurring net income went up by 21 percent to P27.6 billion from P22.83 billion a year ago.

Its net sales for the first half of 2017 jumped 20 percent to P393.4 billion, from P329.1 billion in the same period in 2016. (FREEMAN)