SMC unveils $33B in new ventures
San Miguel Corp. is set to embark on three new business ventures—a new and larger oil refinery, an integrated steel mill and a pioneering ocean tidal technology power plant—which will cost it and its prospective foreign partners as much as $33.6 billion.
In a briefing, San Miguel president Ramon Ang said the new projects were expected to sustain the growth momentum of the country’s largest conglomerate over the next few years while responding to the expanding needs of the economy.
“We are looking at building a new oil refinery with a capacity of 250,000 barrels a day, along with parallel products like petrochemicals and ‘aromatics,’” he said, repeating a disclosure made to the Inquirer earlier this year. “That’s a $15-billion venture.”
San Miguel—which also owns Petron Corp.—said demand for fuel and lubricants in the country was growing faster than what players in the local industry could currently meet.
The group will build the new refinery, in addition to Petron’s newly expanded RMP-2 facility in Limay, Bataan, in partnership with a yet-to-be-determined foreign petroleum firm.
Ang said San Miguel would also ride the wave of the Philippine economic growth by building the country’s first integrated steel mill, unlike those of former or existing players which were involved in limited aspects of the industry.
“When we say ‘integrated,’ this means we will produce the steel from iron ore, down to the finished product,” he said. “This facility will have a stainless steel plant that can produce 300- and 400-series products.” This will also involve $15 billion in investment.
Ang declined to reveal where the mill would be built, lest real estate prices shoot up because he was still in the process of acquiring the land.
San Miguel will also enter the renewable energy space—a new venture for the country’s largest power generator whose plants are mostly coal-fired.
“Our first renewable energy project will use ocean tidal technology and will generate 1,200 megawatts of electricity,” he said. “It’s big, and it’s very cheap to operate that. It doesn’t require fuel. You spend to build it once and, with proper maintenance, it will run forever.”
Studies commissioned by the conglomerate revealed that ocean tidal technology could generate as much as 18,000 megawatts of renewable energy out of ocean tidal from around the Philippines.
At an average cost of $3 million per megawatt to build ocean tidal facilities—compared to $2.5 million/MW for clean coal and $1 million/MW for traditional coal—Ang said San Miguel’s belated foray into the renewable energy sphere would cost it $3.6 billion.
To entice consumers to switch to renewable energy, he said San Miguel “will not ask for FIT incentives” from the government, referring to the expensive subsidy scheme which the state gives to industry players to encourage them to invest in renewables.
