JG Summit sets 48.2 billion peso capital spending

JG Summit president Lance Gokongwei reported to stockholders in an annual meeting late yesterday that this year’s capital outlays would be bigger than the 41.9 billion pesos spent last year. Outside of the regular capital outlays in 2016, JG Summit had invested an additional 33.4 billion pesos last year with its acquisition of 35 per cent of Global Business Power Corp for 11.8 billion pesos and the purchase by food unit Universal Robina Corp (URC) of 65 per cent of leading Australian firm Snackbrands for 21.6 billion pesos.
This year’s capital budget covers only outlays for the expansion of existing businesses and does not include any budget for prospective acquisitions.
Gokongwei estimated that the airline |business under Cebu Air would account for 18 billion pesos-20 billion pesos of capital spending this year while property arm Robinsons Land Corp would likely spend 15 billion pesos. 
URC has an estimated budget of 7 billion pesos. The banking business under Robinsons Bank will spend a few hundred million. The rest is of the budget is for petrochemicals, he said.
“We think we’ll be able to have a world-class cost structure to compete in this business,” he said.
The engineering, procurement and construction contract for the petrochemical expansion will be bid out soon and expected to be awarded before yearend, he said.
JG Summit’s US$700-million (Bt23.8 billion) petrochemical business expansion will have five components – expansion of the naphtha cracker plant, expansion of the polypropylene plant as well as the building of a brand-new polyethylene factory, aromatics factory and butadiene plant. 
They are targeted to be operational by 2021.