SM Group Expands Non-Core Businesses to Drive Growth

October 04, 2023: The SM Group, one of the largest conglomerates in the Philippines, is expanding its non-core businesses to drive faster growth and boost earnings.

The company has recently invested strategically in renewable energy firm Philippine Geothermal Production Co. and logistics firms 2GO Group Inc. and Airspeed.

These non-core businesses currently contribute 10% of the company’s total earnings, but SM Investments consultant for investor relations and sustainability Timothy Daniels said they aim to increase this share in the coming years.

SM Group’s Non-Core Businesses

The SM Group’s non-core businesses include:

Energy: The company invests in renewable energy, such as geothermal and solar power.

Logistics: The company invests in logistics and shipping companies to improve its supply chain and expand its reach.

Other: The company invests in other businesses, such as healthcare and education.

Benefits of Expanding Non-Core Businesses

Expanding into non-core businesses can benefit the SM Group in several ways, including:

Diversification: It reduces the company’s reliance on its core businesses, which are more cyclical and vulnerable to economic downturns.

Growth: Non-core businesses can provide new sources of growth for the company.

Synergies: The SM Group can leverage its existing resources and expertise to create synergies between its core and non-core businesses.

Conclusion

The SM Group’s expansion into non-core businesses is a strategic move to drive faster growth and boost earnings. The company invests in various sectors, including energy, logistics, healthcare, and education.