Megawide eyes SEAsia markets for pre-fab exports
MANILA - Megawide Construction Corp., one of the country’s top building contractors, is tapping the Southeast Asian market as it ventures into exports of pre-fabricated construction materials.
Local infrastructure projects and exports will form part of the company’s plan to diversify its revenue stream in the long run, a company executive said.
“We’re considering regional expansion, particularly supply of our pre-cast (materials),” Megawide chief financial officer Oliver Tan said.
Megawide’s first shipment of pre-fabricated construction materials to a Southeast Asian residential project contractor will likely be conducted early next year, Tan said.
“We’re still looking at the numbers but it looks promising,” Tan said, adding that Megawide will benefit from zero tariffs for construction materials.
The listed firm’s P1-billion pre-cast production plant in Taytay, Rizal, the biggest one-stop facility for pre-cast concrete building systems in the country and one of the largest in the region produces materials like beams, columns, stairs and walls.
“Our facility is state-of-the-art in Southeast Asia. We’re more advanced than our neighbors so we’re looking at the supply of pre-cast regionally,” Tan said.
To date, the pre-fabrication facility’s utilization rate is just 30 percent.
“We’re trying to market our pre-cast products to horizontal developments,” Tan said, adding that pre-fabricated items have been sold mostly to high rise developments in the past few years.
For the next three years, the supply of pre-cast building materials is targeted to account for 20 percent of Megawide’s total revenues, Tan said.
Local infrastructure developments will also provide new revenue streams for Megawide.
“We want to replicate the success we did in vertical developments. We brought in the building technology and we want to do the same for infrastructure like elevated highways,” Tan said.
Megawide has been actively participating in projects offered by the government under the Public-Private Partnership (PPP) program.
The firm is bidding for the automated fare collection system and the P17.5-billion Mactan-Cebu International Airport project. It also wants to become Metro Pacific Investments Corp.’s contractor for the P60-billion extension of the Light Rail Transit Line 1 to Cavite.
Megawide also seek to rehabilitate the 68-year-old Philippine Orthopedic Center in Quezon City. It earlier won two school infrastructure projects involving the construction of a total of 7,144 classrooms in Central and Southern Luzon.
For its core construction business, Megawide so far has an orderbook of P20 billion, Tan said.
“SM Development Corp. is still our largest client on the residential building portfolio,” Tan said. Megawide is also into the construction of offices and hotels.
In May, the construction firm raised P2.37 billion after principal shareholder Citicore Holdings Investments Inc. sold shares to local and foreign institutional investors.
In the first half, its profits surged nearly 60 percent to P747.95 million from P474.35 million a year ago as the company posted a 14-percent growth in contract revenues to P4.16 billion.