MANILA— Alliance Global Group Inc. (AGI), the holding company of tycoon Dr. Andrew L. Tan, is embarking on another heavy capital spending this year as part of its commitment to sustain its recent growth pace. The conglomerate is allocating capital expenditure (CAPEX) this year of P75-billion, an increase of 19% from its actual spend of P63-billion in 2023. The budget also reflects an eight-year high since the P77-billion capital investments in 2016.
AGI’s planned capital spending is aimed at ensuring its premier positioning across its diversified business segments, affirming AGI’s position as the country’s premium lifestyle conglomerate.
“AGI remains steadfast and dedicated to driving growth across all its business segments, mindful of its goal to elevate global consumer preferences through aspirational product offerings,” says AGI President and Chief Executive Officer (CEO) Kevin L. Tan during the conglomerate’s annual stockholders’ meeting held this morning.
AGI has varied interests spanning real estate developments through property giant Megaworld Corporation; spirits manufacturing through Emperador Inc.; leisure, entertainment, and hospitality through Travellers International Hotel Group, Inc.; and, quick service restaurants through Golden Arches Development Corporation (GADC), popularly known as McDonald’s Philippines, which has a long-term partnership with AGI and is led by its Chairman and Founder George Yang.
The bulk of Group capex, or about P55-billion, will be allocated for Megaworld, which intends to expand its real estate portfolio to 35 townships this year with the launch of new developments, mostly outside of Metro Manila, that should serve as its sources of growth in the future.
Part of the spend is also intended for its residential and hotel projects, with the latter mainly located in Iloilo and Boracay. It is likewise undertaking the development of new lifestyle malls in Boracay, Cavite, and Pampanga, as well as the construction of premium office buildings in Iloilo City, Bacolod, and Pampanga. This is part of the company’s plans to bring the combined gross leasable space for its office and mall developments across the country to 3 million square meters by 2030, particularly in Pampanga, Bulacan, Bacolod, Iloilo, and Davao.
Another P10-billion will be used by Travellers International for its ongoing expansion projects, mainly within its Newport World Resorts complex in Pasay City. The company is currently refurbishing the Newport Mansion, a new hospitality haven that will feature all-suite rooms, garden villas, and bay suites. Part of its capex will also be utilized for the development of the commercial area in Westside City, including the construction of the Grand Opera House, theaters, and cinemas.
Emperador will utilize P6.5-billion for the ongoing expansion of its whisky operations under Whyte and Mackay. The company is set to double the production capacity of the Dalmore Distillery before the end of the year. It is also expanding the maturation complex of the Invergordon Distillery, doubling its footprint to 92 hectares and building additional warehouses for whisky aging.
Aside from capacity expansion, the capex will also fund in part Whyte and Mackay’s sustainability goal to be carbon neutral by 2030. This includes the upgrade of its distillery to make operations more efficient and sustainable, building an anaerobic digestion bioenergy center, and a biomass boiler system.
“Our relentless pursuit of growth is also matched by our unwavering commitment to sustainability. We firmly believe that by harmonizing profitability with responsibility, we can pave the way for a brighter, more sustainable corporate landscape,” adds Tan.
The balance will be spent on the continued expansion of the McDonald’s store network throughout the country to bring its total number of stores to 800 this year. This demonstrates the commitment of Golden Arches to bring its offerings to even more Filipinos nationwide.
AGI posted a record performance in 2023 in terms of consolidated revenues which grew by 15% year-on-year to P211.2-billion, while pre-minority income rose by 20% to P30.3-billion. The Group forged results beyond pre-pandemic levels, even posting new highs in terms of sales, EBITDA, net profit, and all other operating metrics. Attributable profit amounted to P19.6-billion, reflecting an increase of 21% year-on-year.
