MANILA -- Philippine infrastructure conglomerate DMCI Holdings is determined to ramp up growth at home and abroad over the next five years, lest the effects of China's slowdown and other headwinds hurt earnings.
Chairman and President Isidro Consunji on Thursday night said DMCI's board had met that day and agreed to chart a new course. "Where will we be in the year 2020?" he said, summing up the theme of the board meeting.
DMCI is a big player in the Philippine construction, property development, water distribution and power generation markets, as well as the nickel and coal mining sectors. It barely has a foreign footprint, but it is now looking at opportunities elsewhere in the region.
Core earnings came to 12.3 billion pesos ($267 million) last year, up by 20% from 2014. Officials were not ready to give profit guidance for this year but warned that China's downturn could limit nickel shipment volume. They added that the expiration of Maynilad Water Services' income tax holiday could also dampen earnings; DMCI owns about 25% of the utility.
"If we don't do anything different, we will plateau," Consunji said. "The agreement [reached at the board meeting] is to change gear and go to another level of growth in the next five years."
Exploring the neighborhood
Consunji, whose family controls DMCI, said the five-year road map is still being fine-tuned. But management offered hints at the plans, such as venturing into new fields at home and expanding nascent operations elsewhere.
"The Philippines is still growing, and there are still a lot of opportunities here," Consunji said, adding that infrastructure development is likely to be a priority of the next government.
The Philippine economy grew by an average of more than 6% in the last six years -- the fastest in decades. Candidates running for the May 9 presidential election have all vowed to step up infrastructure development.
Swamped with projects at home, DMCI had been reluctant to build up its international presence -- something rivals Ayala Corp. and Metro Pacific Investments have already done. Now the conglomerate is keen to go beyond its comfort zone. In Southeast Asia, Consunji said DMCI will team up with Japanese trading house Marubeni, a long-time partner that has interests in the region.
Chief Financial Officer Herbert Consunji said DMCI and Marubeni officials have been traveling around the region in recent years and are particularly interested in Indonesia, Myanmar, Vietnam and East Timor.
DMCI Holdings, founded by David Consunji, a public works minister during the rule of Ferdinand Marcos in the 1970s, was largely a contractor but gradually made inroads into other industries. The company has been successful in turning struggling assets, such as its water distribution and power generation units, into money-makers.