Creating long-term value in Asia

BySCMP Events

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Published: 12:00am, 26 Feb 2021Updated: 12:00am, 26 Feb 2021

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First Pacific (SEHK: 00142, ADR: FPAFY) is a Hong Kong-based investment management and holding company with operations located in Asia-Pacific. Our principal businesses relate to consumer food products, telecommunications, infrastructure and natural resources.

Our core holdings consist of three companies operating in the fast-growing markets of Southeast Asia:

PT Indofood Sukses Makmur Tbk
PLDT Inc.
Metro Pacific Investments Corporation

Established in 1981, First Pacific will celebrate its 40th anniversary in May 2021 under Managing Director and Chief Executive Officer Manuel V. Pangilinan and Chairman Anthoni Salim. The Company has grown rapidly in the intervening years, reaching a gross asset value of more than US$5.3 billion at the end of 2020. Via these holdings, First Pacific manages assets worth more than US$30.3 billion, mostly located in Southeast Asia.

First Pacific’s largest business is a 50.1% stake in Indofood (IDX: INDF), the largest listed food company in Indonesia. Over the last two decades, Indofood has evolved into a Total Food Solutions company with operations in all stages of food manufacturing, from the production and processing of raw materials to the creation and packaging of consumer products. Today, Indofood is renowned as a leading player in each business category in which it operates. In its operations, Indofood capitalizes on economies of scale and a resilient business model with four complementary Strategic Business Groups, namely Consumer Branded Products, Bogasari, Agribusiness, and Distribution. The newly acquired Pinehill Group under Consumer Branded Products expands its food products market to more than 885 million new consumers in Africa, the Middle East, and Southeastern Europe.

First Pacific is the largest shareholder in PLDT (PSE: TEL, NYSE: PHI), the largest integrated telecommunications and digital services provider in the Philippines, holding 25.6% of the company. PLDT offers a wide range of telecommunications and digital services across the Philippines’ most extensive fiber optic backbone and fixed line and cellular networks. Its principal business groups are: Individual, serving tens of millions of cellular customers; Home, delivering fixed-line voice and broadband services to families across the Philippines; and Enterprise, serving tens of thousands of businesses in the Philippines and abroad with a wide spectrum of data, voice and broadband services.

First Pacific is the largest shareholder in Metro Pacific (PSE: MPI, ADR: MPCIY), known as MPIC, with a stake of 43.1%. MPIC is a leading infrastructure holding company with a diverse set of assets. They include: the country’s largest electricity distributor, Manila Electric Company; the largest water utility in the Philippines, Maynilad Water Services Inc.; Metro Pacific Tollways Corporation and other toll road operators in the Philippines, Indonesia and Vietnam; the Philippines’ largest network of hospitals; and the storage of petroleum products.

The overarching objective of MPIC’s investment and management strategy is to create value for stakeholders by achieving long-term economic success while contributing to inclusive and sustainable development of the Philippines. Through its operating companies, MPIC strives to deliver high-quality and affordable services for customers, provide safe workplaces and merit-based opportunities for employees while generating returns for investors and business partners. On a daily basis its operating companies are making a difference to the lives of millions of Filipinos, powering commerce and households, connecting people and places, delivering clean and safe water, and making world-class healthcare available to all.

Other assets directly held by First Pacific in the Philippines include:

Philex Mining Corporation (PSE: PX), a large copper and gold mining company
PXP Energy Corporation (PSE: PXP), an upstream oil and gas company
Roxas Holdings Inc. (PSE: ROX), a sugar and ethanol producer

Our objectives have remained consistent over the years: to unlock value, enhance cash flows to deliver dividend/distribution returns, grow share prices, and finance further investment in value-enhancing businesses, taking into consideration all relevant criteria, including Environmental, Social and Governance (ESG) factors, to better manage risk and generate sustainable long-term returns.

First Pacific’s investment criteria are:

To locate in or trading with fast-growing economies of emerging Asia
To relate to our four industry sectors (consumer foods, telecommunications, infrastructure and natural resources)
Have a strong or dominant market position in their sectors
Possess the potential for substantial cash flow
Allow First Pacific to establish management control or significant influence

Our strategy is to identify undervalued or underperforming assets with strong growth potential and possible synergies. The aim is then to set strategic direction, develop business plans, and define targets. A key part of this process is to raise reporting and ESG standards to world-class levels at First Pacific and its operating companies.

Looking to the future as the Company celebrates its 40th anniversary in 2021, First Pacific regards its three core assets as engines of growth. Overall, First Pacific looks to the years ahead with optimism for its businesses and the markets they operate in.