DMCI Group sets record P40-B capex for 2016; eyes expansion abroad in 5 years

Diversified engineering conglomerate DMCI Holdings Inc. (DMC) is more than doubling its capital expenditure (capex) to over P40 billion this year, mainly to support the growth of its real estate and power generation businesses.

“This is our biggest annual capex program to date. There is still considerable room for growth in the property market and power industry so we are focusing our resources on these areas,” said DMCI Holdings Chairman and President Isidro A. Consunji.

Consunji told reporters that the conglomerate is increasing capital spending as part of its overall goal “to go for another level of growth in the next five years” or up to 2020.

“One of the options is to go abroad or to expand into other industry,” he said. “Six to seven percent (growth) a year is a lot of opportunity. Infrastructure will still be big, that's my opinion.”

Consunji believes that infrastructure has significant effects on the growth of other sectors.

With this, he is optimistic the contribution of construction to the conglomerate’s income will again increase after five years.

Power and coal mining now comprise the biggest share of its income, while construction accounts for only 5 percent.

Meanwhile, real estate subsidiary DMCI Homes will account for the biggest chunk of the capital spending at P32.5 billion in 2016.

Of this amount, P27.5 billion pertains to total development cost of new projects to be launched this year while the remaining P5 billion will fund land acquisitions.

Among the big projects of DMCI Homes for this year is a high-end condominium located in Asia World, Paranaque City, which will be the company’s first luxury residential development. It will also begin developing its first mixed-use building in Makati City.

Plans are also underway for the mid-segment developer to expand outside Metro Manila and enter the low-cost housing market.

The DMCI group is also spending around P7.2 billion for its energy projects under Semirara Mining and Power Corporation (SMPC) and DMCI Power Corporation (DPC).

Integrated energy company SMPC is setting aside P5 billion for equipment acquisition and facilities improvement.

Off-grid power supplier DPC plans to spend over P2.2 billion for power plant construction and equipment acquisition.

D.M. Consunji Inc. (DMCI) and DMCI Mining Corporation are setting aside around P700 million for the acquisition of additional equipment and machineries to support their operations.

DMCI is participating in a number of infrastructure projects this year, either as a bidder or contractor.

Meanwhile, DMCI Mining plans to increase its nickel output to help weather the slump in commodity prices.

- Interaksyon