By Arra B. Francia, Reporter
ABOITIZ Equity Ventures, Inc. (AEV) sees the Southeast Asian market contributing to a significant part of its earnings in the following years, as it pursues more investments that will help sustain its growth momentum.
AEV Chief Executive Officer Erramon I. Aboitiz said the group would have to look for more growth opportunities abroad since they are growing faster than the Philippine economy and the industries where they are present.
“Projecting ourselves moving forward, we think that it’s important that we start establishing a foothold in some of these countries. Because there will come a time that for us to sustain our growth we cannot rely on just the local market, and that’s really what we’re preparing ourselves for,” Mr. Aboitiz told BusinessWorld in a recent interview.
AEV’s international business currently accounts for about two to three percent of its net profit, mostly from the food group. Mr. Aboitiz said they have yet to plot an actual target on how much they want this segment to contribute in the coming years.
“If we can get contributions from the ASEAN (Association of Southeast Asian Nations) market to 15-20% of our income (in the next 10 years), I think we will have done one hell of a job,” Mr. Aboitiz said.
AEV’s power unit, Aboitiz Power Corp., announced back in 2015 that it will be spending $500 million in a span of five years to finance its expansion in the Southeast Asian region. This also supports the company’s goal of having 4,000 megawatts under its portfolio by 2020.
While AboitizPower has identified Myanmar, Indonesia, and Vietnam as its areas for expansion, Mr. Aboitiz noted that their efforts are actually focused on Vietnam because of its similarity with the Philippine market.
The company is looking for deals with local partners who have either started the project already and are looking for partners to come in, or firms that need help in executing projects they already have.
“(We have) some solar projects, wind projects, a lot in the renewable space, because Vietnam has implemented something similar to FIT or the feed-in tariff. So these are going to be opportunities for us,” Mr. Aboitiz said.
Meanwhile, Mr. Aboitiz noted that AEV’s food business through Pilmico Foods Corp. has been the “more successful” unit abroad, having managed to acquire several businesses in previous years.
Pilmico’s latest and largest acquisition to date is Asia-Pacific animal feeds manufacturer Gold Coin Management Holdings, Ltd. The company is present in 11 countries in Asia with 20 production facilities, and has an employee base of more than 3,000 people.
“We’re very happy with that. We think this acquisition and the fact that we have a presence now in so many different countries will not only help the food group but the Aboitiz group,” Mr. Aboitiz said, explaining that this will help them better understand the markets and the opportunities they offer.
The group is investing up to $200 million to further expand Gold Coin’s business. This will be funded by borrowings or internally generated cash.
AEV booked a net income attributable to the parent of P17.32 billion in the first nine months of 2018, nine percent higher year-on-year, driven by a 21% growth in gross revenues to P135.25 billion.