December 19, 2011

DMCI Holdings: Working Together for Economic Growth

BACK when David M. Consunji started, he was already dreaming big that after just a few years, his company would become one of the most sought-after builders and the trusted name behind some of the country’s landmark chapels, multi-story hotels and condominiums, large commercial complexes as well as irrigation dams, kilometer- long concrete bridges and skyways, power plants, transmission lines and industrial plants.

And since Consunji isn’t someone to rest on his laurels, he, along with his eldest son, Isidro A. Consunji, decided that it was time to venture into other allied interests. For them, it was time to begin putting together the pieces of his future business empire. By 1995, the company diversified into engineering-based related businesses and established DMCI Holdings Inc. to take care of the company’s interests in construction, real estate development, power generation, and water infrastructure. Today, when one hears about DMCI, what comes to mind are unique buildings and top-notch public works.

Instead of venturing into new, popular or “hot” business ventures—which may not have been necessarily in his line of expertise— Consunji kept to his core strength in their engineering-based firms. Unlike many a tycoon who have lost money or tread dangerous ground by prioritizing quick profit or turnaround, Consunji has kept to his vision, trusted his intuition, and most importantly stuck to projects and services that he knows people can trust him with.

Indeed, Consunji has a knack for pouncing on the right opportunity, which is very evident as DMCI Holdings is currently enjoying a stellar growth trajectory. In its most recent report, DMCI Holdings said its net attributable income grew tremendously from just P4.18 billion in 2005 to P7.87 billion in 2010. On the other hand, revenues expanded from just P10 billion in 2005 to P43.5 billion in 2010.

Construction

After constructing more than 500 buildings and infrastructures as well as national landmarks, flagship company DM Consunji Inc. has remained one of DMCI Holdings’ main growth drivers. Revenue is up from just P2.79 billion in 2005 to P10.73 billion in 2010. With the P8-billion extension of the Skyway; the 42-story twin-tower residential project in Binondo, Manila; and the P770- million LRT North extension already complete, the company is on-course in completing the rest of the P17 billion worth of projects it received in 2009, including the P3-billion 168 Residences, the construction of Raffles Suite and  Residences and Fairmont Hotel in Makati City.

DMCI was also awarded significant vertical building contracts in the first quarter of 2011, including the P8.6-billion casino-hotel project of businessman Enrique Razon, located at the Pagcor Entertainment City in Pasay City; P635-million Makati Diamond Residences, a residential condominium in Makati City for San Miguel Corp.; and P800-million NAC Tower, a corporate headquarter in Fort Bonifacio, Taguig City.

In addition, DMCI expects to begin the construction of the 135-megawatt coal fired plant of South Luzon Thermal Energy Corp., a joint venture between Trans Asia Oil and the Ayala Group.

Real estate

If there’s another group fueling DMCI Holding’s stellar performance, it would definitely be DMCI Homes, the company’s real estate development unit.

Sales and reservations have increased from a mere P3 billion in 2005 to P17 billion in 2011.

DMCI Homes expects further growth as new projects are steadily being sold including La Verti Residences in Taft, Pasay City; Tivoli Garden Residences and Flair Towers in Mandaluyong City; The Redwoods in Fairview, Novaliches; Siena Park in Bicutan Parañaque and Stellar Place in Quezon City.

Furthermore, the company is also expanding its territories in Quezon City with The Amaryllis and Zinnia Towers, in San Juan with One Castilla Place, as well as Sorrel Residences in Manila. All these projects will officially be launched next year.

Mining

The mining unit of DMCI Holdings, composed of Semirara Mining Corporation, the Philippines’ largest coal producer, and DMCI Mining Corporation, attributed the extensive growth for the holding firm 2010 with P16 billion revenue.

Strong demand for Semirara coal is reflected by the high coal sales of 5.617 million metric tons. Although export demand is still robust, especially from China, the company said it will prioritize serving the local markets as these commanded higher prices.

Thanks to the higher generation capacity provided by the newly rehabilitated Calaca coal plant, Semirara’s power generation business jumped 51 percent. Also, DMCI Mining entered into joint venture with Australian Rusina Mining Ltd. to be the independent contractor to directly undertake the mining operations in the municipalities of Sta. Cruz and Candelaria in Zambales. The mining operation is an open pit extraction of nickel, chromite, and iron laterite for direct shipping.

Power

DMCI Power Corporation (DPC) made a remarkable contribution to DMCI Holdings’ revenue at 21 percent in 2010. This is largely due to high performance levels in energy generation and electricity take-up with the successful rehabilitation of the Calaca power plant owned by Sem-Calaca Power Corp. in Batangas. The rehabilitation of the Sem- Calaca plant was undertaken and managed by DPC. It has an expected full capacity of 600MW once rehabilitation is completed.

Water

DMCI Holding’s investment in the water sector is recognized mainly through its equity investment in the consortium with Metro Pacific Investments Corp., which owns water concessionaire Maynilad Water Services, Inc.

Maynilad, which handles the water distribution and sewer services for the western portion of Metro Manila and some areas of Cavite, reported improved water operating efficiencies from the time it started in 2007 reporting a water service revenues improvement from P1.25 billion in 2007 to P12 billion in 2010.

Indeed, DMCI Holding’s ultimate goal to play a vital role in the nation’s bid toward progress is fast being realized. And as DMCI Holdings remain committed to the economic and social development of the country, expect its leadership headed by its chair, David M. Consunji to likewise remain loyal to its customers as well as to the company’s core ideals of personal attention to detail and quality workmanship.

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