Early preparation and major acquisitions pay off for impressive NLEX
GETTING eliminated early the previous conference is sometimes a blessing in disguise for teams in the PBA.
PNOC studying six proposals for LNG plant
THE Philippine National Oil Co. (PNOC) is evaluating six proposals from six countries to build an integrated liquefied natural gas (LNG) facility estimated to cost $2 billion ahead of submitting these to the Department of Energy (DoE) by month’s end, an official of the company said.
“We have offers from China, Japan, South Korea, Indonesia, Singapore and the United Arab Emirates,” Arwin L. Ardon, PNOC technical adviser, told reporters on Thursday on the sidelines of IBC Asia’s Power and Electricity Week, a two-day conference at Solaire Resort and Casino in Parañaque City.
He said the six proponents have all submitted proposals for what he called a “megaproject” with several components, including gas storage facility with a capacity of five million tons per annum (MTPA) and a power plant with an initial capacity of 200 megawatts (MW) but scalable to 1,000 MW.
Mr. Ardon said the June 30, 2017 deadline for project submission yielded the six proposals, down from the 55 entities that have previously signified interest in what has now become a government-to-government project.
Aside from the storage facility and the power plant, the proponents submitted proposals for an integrated facility with components for liquefaction, regasification, and a floating storage regasification unit (FSRU), he said.
He added the FSRU allows for the distribution of the stored gas to off-grid areas currently served by more expensive diesel-fueled power plants.
Mr. Ardon said PNOC’s estimated five MTPA is planned to respond to the needs of the natural gas-fired power plants in the country, namely the four plants in Batangas City owned and operated by First Gen Corp. and one in Ilijan, Batangas City run by Kepco (Ilijan) Corp.
The capacity will come in phases and is timed for the expiration of the supply contract of Kepco with the Malampaya gas platform in 2022 and that of First Gen in 2024.
After the DoE selects the winning proponent, the next step would be to evaluate the project cost, which will involve the National Economic and Development Authority, as well as the Department of Foreign Affairs.
DoE Secretary Alfonso G. Cusi has said that the planned LNG infrastructure is aimed at making the country a hub for the energy resource in Southeast Asia. The facility is planned to be built on a property in Batangas owned by PNOC.
Mr. Ardon said PNOC has three options for site of the LNG facility — in Bauan or Mabini, Batangas, or Limay, Bataan — all owned by the DoE’s project implementation arm. He also said that the company was in talks with National Development Co., which has a property in the area adjacent to the gas power plants in Batangas City. — Victor V. Saulon
Shakey’s ramping up local, overseas expansion
By Arra B. Francia
SHAKEY’S Pizza Asia Ventures, Inc. (SPAVI) is ramping up efforts to take its pizza business to previously untapped territories, as it aims to grow earnings and sales by mid-teens by end 2017.
SPAVI President and Chief Executive Officer Vicente L. Gregorio on Thursday said the company is starting to further expand into the Visayas and Mindanao region, noting that there only 16 Shakey’s branches in the area.
SPAVI is allocating around P400 million to P500 million for the construction of 20 stores in the Philippines, adding to its 189 stores as of end March.
“We think there’s a lot of runway and opportunity in the Visayas Mindanao region… Despite the current trouble in Mindanao, Marawi, I think there are many other places there, like Roxas, Aklan, to name a few, that would be ready for Shakey’s. That kind of expansion would be very good for the company,” Mr. Gregorio told reporters after the company’s annual shareholders meeting in Pasig on Thursday.
The SPAVI executive said four locations have been identified, with two more on the way. The company has also recently deployed a team that would screen the additional locations in the area.“Because we also have to be very careful, making sure that we not just to open the first possible location,” Mr. Gregorio added.
SPAVI is set to open its first international franchise in Kuwait by the first half of September, as part of a deal signed last year which commits the construction of at least 10 stores in the country in the next five years.
Last July 13, the company also announced that it has inked a deal with Dubai-based firm Aljeel Capital to open least 10 stores in the United Arab Emirates in the next five years, bringing SPAVI’s total international commitments to 20.
“We think there’s a lot more countries in the Middle East region and in Asia where currently talks are ongoing. But we also want to be very prudent, very careful, making sure that our international expansion is done and executed right,” Mr. Gregorio said.
The company considers the Middle East a top priority for the pizza chain’s expansion, given the sizeable number of overseas Filipino workers (OFW) in the region.
For Asia, Mr. Gregorio said they are entertaining inquiries from entities in Indonesia and Myanmar.
With the company’s expansion, SPAVI looks to post mid-teens growth for both the top line and bottom line, within the range of the 13.4% growth in earnings to P760 million for 2016.
The profit guidance comes amid challenges facing SPAVI such as the weakening peso and increased competition.
“Increased competition for locations, for good labor. Import costs, while not a major part of our cost will also be affected because of the peso devaluation. It’s a mix of several factors combined will deliver pressure on the costs,” Mr. Gregorio said.
SPAVI aims to offset the pressure on input costs by being more efficient in operations.
“We believe there is still room to be more efficient, the management is really focusing on that,” he said.
For the first quarter of 2017, SPAVI reported its profit jumped 26% to P172.83 million, following a 22% growth in systemwide store sales.
DoF accepts initial payment for Mighty Corp. tax liability from acquirer JT International
THE DEPARTMENT of Finance (DoF) said that it accepted yesterday an initial payment from JT International (Philippines), Inc. of P3.44 billion on behalf of Mighty Corp. to cover the latter’s tax liabilities, but said the latter’s settlement offer remains under study.
“We accept the initial payment,” Finance Secretary Carlos G. Dominguez III was quoted in a statement as saying.
However, the DoF said that “such acceptance does not yet mean that it was agreeing to the company’s settlement offer.”
Likewise, he said that even if the government accepts its offer, it “does not preclude any criminal charges that the Bureau of Internal Revenue (BIR) may file against the company in connection with its tax-related cases, as these cannot be compromised.”
Asked whether Mighty Corp. has successfully remitted the payment, president and director Oscar P. Barrientos said yes, but declined to comment further.
The DoF said that it was informed that a manager’s check amounting to P3.44 billion — which covers the company’s non-payment of excise tax on its cigarettes — was issued yesterday by JTI on behalf of Mighty Corp. at the Social Security System (SSS) branch of the Land Bank of the Philippines in Quezon City.
This is the first tranche of the P25-billion settlement proposed by Mighty Corp. on July 10, which it will pay through a loan from cigarette manufacturer, JTI Philippines.
The remaining P21.5 billion balance — which represents the income tax deficiencies of the firm’s officers from 2010 to 2016 — will be paid upon completion of the acquisition deal between the two firms, which is currently being studied by the Finance department.
Mighty Corp. said in a letter to the DoF that it will sell to JT International (Philippines), a unit of Japan Tobacco International, its assets and affiliates of its manufacturing and distribution business — along with the intellectual property rights associated with these assets, including those owned by Wong Chu King Holdings, Inc., worth P45 billion, exclusive of value-added tax.
The DoF noted, however, that the offer does not extinguish the criminal complaints the cigarette firm currently faces due to non-payment of excise taxes and possession of counterfeit internal revenue stamps.
Mr. Barrientos has asked the BIR for a reinvestigation of its pending criminal complaint, upon completion of the initial payment.
After separate raids by the BIR and Customs bureau at Mighty Corp.’s warehouses in Bulacan, Pampanga, and General Santos City, the tax bureau filed three criminal complaints before the Justice department over tax liabilities totaling P37.88 billion.
The Bureau of Customs, for its part, blacklisted Mighty Corp.’s import accreditation to prevent it from continuing operations pending the conclusion of the criminal complaints.
Mr. Barrientos told the DoF earlier that management will retire the operations of Mighty Corp. following the conclusion of its deal with JT International (Philippines). — Elijah Joseph C. Tubayan
Morality and good in The Game of Thrones
Trade Tripper
Jemy Gatdula
Jemy: It is best that virtue permeates public life, particularly in government, as seemingly private acts can — if done habitually and by a significant number of the population — have an effect in the conduct of government.