PinoyBusiness.ORG – Home

The energy investment arm of food and beverage giant San Miguel Corp., the San Miguel Energy Corp. (SMEC), will be conducting an initial public offering (IPO) within the next three years. This has been confirmed by San Miguel president Ramon S. Ang who said that they will definitely keep a 51% interest in SMEC in spite of the IPO. The proceeds of the IPO will be used to fund the activities and work programs of the energy company, Ang said.

SMEC has just recently acquired an independent power producer administrator (IPPA) contract – the 620-megawatt combined cycle power plant in Limay, Bataan, through a negotiated sale from Power Sector Assets and Liabilities Management (PSALM) Corp.

Currently in the thick of expansion and conversion plans for its recently acquired power generation asset, Ang said SMEC will invest at least $350 million in converting the plant into a compressed natural gas (CNG)-fired facility. Currently, the company is in talk with several CNG suppliers from Indonesia, Malaysia, Qatar and Middle East.

In the same week in acquired the Bataan plant, SMEC also bagged the contract to manage the independent power producer (IPP) contract for the 1,000-MW Sual coal-fired power plant in Pangasinan, through a bidding conducted by PSALM.

Ang said the company is focusing on its energy and power business. It aims to increase the contribution of its power and energy investments to 25 percent of the parent firm’s annual earning. Earnings from its food business should now be about 10 to 20 percent of the total, while telecom should be 30 percent. “We want to be the top conglomerate, the most diversified with the biggest sales revenue,” he said.

“For our power business, as much as possible, we want it to run on renewable energy. However, for the Sual (facility) which is a coal-fired plant, the question is how to make it environmentally friendly,” Ang added.