SM sustains phenomenal growth, launches aggressive expansion
Posting an economic growth of between 6 and 7 per cent in the last three years against a backdrop of global uncertainties, the Philippines has emerged as Southeast Asia's fastest-growing economy. Amid the country's robust economic performance, leading conglomerate SM Investments (SM) has embarked on an aggressive plan of expansion, harnessing the strengths of its highly synergistic core businesses in retail, banking and property development.
Posting an economic growth of between 6 and 7 per cent in the last three years against a backdrop of global uncertainties, the Philippines has emerged as Southeast Asia's fastest-growing economy. Amid the country's robust economic performance, leading conglomerate SM Investments (SM) has embarked on an aggressive plan of expansion, harnessing the strengths of its highly synergistic core businesses in retail, banking and property development.
"SM is committed to bringing growth and world-class development across the Philippines," says Corazon Guidote, senior vice-president for investor relations. "Our businesses are pursuing more integrated synergistic projects primarily aimed at greater efficiencies and, more importantly, providing a better quality of life for every Filipino."
SM's phenomenal growth showcases the entrepreneurial genius and vision of its founder, Henry Sy Snr, who started the company in 1958 as a modest shoe store. The 90-year-old tycoon's basic strategy is to invest in businesses that he knows best and are related to create synergy. With second-generation Sys at the helm, SM continues to achieve significant milestones by staying steadfast to this core philosophy.
Tracing its roots to the first ShoeMart store opened in Manila in 1958, wholly owned SM Retail operated 269 stores at the end of last year under the SM Store, SM Supermarket, SM Hypermarket, Savemore and WalterMart formats. A total of 30 new stores have just been inaugurated, underscoring SM Retail's efforts to penetrate emerging growth centres in the provinces.
"The retail business will continue to grow as Filipinos aspire for more choices and better concepts," Guidote says.
SM also draws strength from its property operations through majority-owned SM Prime Holdings.
The holding company is one of Southeast Asia's largest property developers, with interests in shopping malls, residential condominiums and commercial office buildings, in addition to resorts, leisure projects, hotels, convention facilities and world-class entertainment venues.
SM Prime operates 50 malls in the country and five in China, including three of the largest in the world. With the success of the 60-hectare, mixed-use SM Mall of Asia complex, SM Prime aims to roll out more integrated lifestyle city development projects.
In China, SM Prime is slated to soon complete its sixth mall, specifically in Zibo, Shandong province, and its seventh mall in the Tianjin Binhai New Area.
Last year, SM posted a strong 14.4 per cent increase in recurring net income. The growth is mainly driven by its banking arm, BDO Unibank, the country's largest bank. Together with China Banking Corp, SM seeks to expand its reach and diversify its bank portfolios.
"We see growth across SM's core businesses," Guidote says. "As the Philippines plays catch-up with the rest of its Asian neighbours, massive opportunities have emerged amid rising disposable incomes and aspirations for improved lifestyles."
In pursuit of further growth and shareholder value creation, SM has diversified into new fields of business through joint ventures. These include SM's foray into integrated resort development through Belle Corp, and copper mining through Atlas Consolidated Mining.
To further enhance its retail operations, SM joined forces with CityMall Commercial Centers and Alfamart of Indonesia in the mid-sized supermarket and mini-mart formats. In the tourism sector, SM has allied with Carlson Rezidor and Hilton to operate its hotels. The new Conrad Manila is slated to open at the end of this year.
http://www.sminvestments.com
