ALLIANCE Global Group Inc. (AGI) is spending some P200 billion in three years, in a move to continue the growth of its business that spans from gambling to property development to liquor manufacturing.
AGI President Kingson Sian said about half of the capital investments have already been allocated for the year, a huge chunk of which was for Megaworld Inc., the property-development arm that businessman Andrew L. Tan mostly found his fortune.
“We have a term we call ‘future-proofing’ our businesses. I think, over the last few years, we have done that, we started off with Megaworld, with over 4,300 hectares of land. That’s secured. That’s one way of future-proofing your business. These were all secured with the low-cost basis. That allows us to completely develop over the next 20 years without even adding to the landbank,” Sian said.
Megaworld recently announced allotting P65 billion in capital expenditures for the year, while Emperador Inc. will be spending some P21 billion and Travellers International Hotel Group Inc. at around P8 billion.
Golden Arches Development Corp., which owns the master franchise of the McDonald’s fast-food chain in the country, allocated some P2.7 billion for the year.
AGI only owns 49 percent of Golden Arches, while the Yang family still operates the business.
“Some of that will flow through next year because of some delays in the buildup. We intend to hit 500 stores next year,” Sian said.
“For Emperador, we’ve been a dominant player in brandy, and we will continue to be that way for the foreseeable future but without losing sight on our focus on our business, we look at a growth market which is whisky and we took the opportunity to buy a significant asset through Whyte and Mackay, that will give us another driver of growth into the future, as well as our investments in Spain,” he said.
Sian said that Travellers, the operator of Resorts World Manila, wants to become a dominant player in the tourism and gaming industry. The company earlier said that it will build at least 5,000 hotel rooms by 2020, which Sian said will put the company way ahead of the competition.
The company is also building its P1-billion integrated resort and casino Resorts World Bayshore in Entertainment City.
Sian, however, admitted its gambling business is currently experiencing downturn with the opening of two larger players—Solaire and City of Dreams Manila. Likewise, China’s crackdown on gambling in Macau also contributed to the revenue drop.
“The [gambling] market has grown three times. Like anything, we need to absorb it. Of course, [while there’s] competition in the region, the gaming concession is long term; you have to look at it long term. There will be blimps in the short term but the long-term view obviously is good,” he said.
AGI had an anemic growth during the first six months of the year to P11.5 billion, from last year’s P11.37 billion, mainly pulled down by Megaworld’s weaker earnings after a huge onetime gain last year.