Economic integration within the Association of Southeast Asian Nations (ASEAN) achieved a crucial milestone with the formal establishment of the ASEAN Economic Community (AEC) at the end of 2015. The AEC aims to transform the region into a single market and production base with over 600 million people and combined output of more than $2.6 trillion.
But even before the onset of the AEC, some of the Philippines’ biggest conglomerates were already actively expanding to other ASEAN countries in search of both markets and production bases.
Based on their recently released 2016 annual reports, Entrepreneur Philippines found that eight of the country’s 10 largest publicly listed holding firms by free-float market capitalization are present in at least one other ASEAN country.
Their presence ranges from investing in a company to running a business in those countries.
One of the most active in ASEAN is San Miguel Corp., whose fuel subsidiary Petron has established a presence in Malaysia. The country’s biggest oil refiner operates more than 570 gas stations there. In addition, San Miguel manages breweries in Indonesia, Thailand and Vietnam, while its food and packaging businesses have operations in Indonesia and Vietnam.
Two other holding firms with prominent activities in other ASEAN countries are Ayala Corp. and JG Summit Holdings. Ayala’s Manila Water operates in Vietnam while its energy unit is developing a wind farm in Indonesia. JG Summit’s Universal Robina Corp. (URC) distributes its branded consumer foods in Thailand, Vietnam, Malaysia, Indonesia and Myanmar. URC recorded consolidated sales of almost Php33 billion from those countries in 2016. JG Summit also has a core investment in a property development company in Singapore. (JG Summit’s controlling shareholders also own the company that publishes the Entrepreneur Philippines website.)
On the other end, both SM Investments Corp. and DMCI Holdings did not disclose any operations or investments in other ASEAN countries. Both companies’ international ventures are centered in China instead—SM operates seven shopping malls in China, while DMCI’s primary export customers for its coal and nickel products are Chinese.
Lorenzo Kyle Subido is a staff writer of Entrepreneur PH