Corporate News


Aboitiz airs interest in state contracts for airports, utilities

Posted on May 25, 2012

ABOITIZ EQUITY Ventures, Inc. has joined the ranks of local conglomerates keen to broaden their portfolio to include public infrastructure, with a ranking official yesterday airing interest in contracts to build and manage airports and utilities.

“Right now, we are keeping our eyes open for PPPs (public-private partnership). Airports and water projects are opportunities for us,� Jon Ramon Aboitiz, company chairman, told reporters at a briefing yesterday.

“We are looking into water distribution or bulk water supply, depending on the opportunity. Water is a very important component in all our needs and the needs of our company, so that is something we will be interested in,� Mr. Aboitiz added.

A P25-billion new water supply project is among the state contracts up for bidding according to the PPP Center’s most recent list dated April 29.

The project, which aims to supply water to Manila, calls for the construction of a dam, water treatment plant, and pipeline.

Airports have also drawn the conglomerate’s interest as demand for air travel has been increasing, Mr. Aboitiz said.

“Airports will be important gateways in the country just as water ports are. More people are now traveling by air, so I think airports would then have to be modernized and be made more efficient. There’s a great opportunity for growth there,� Mr. Aboitiz explained.

Airport projects up for bidding include the Mactan-Cebu International Airport Passenger Terminal (P10.15 billion), New Bohol Airport (P8 billion), as well as the operation and maintenance contracts of the Laguindingan (P1.80 billion) and Puerto Princesa airports.

However, Aboitiz Equity Ventures is not keen on participating in road infrastructure projects.

“We are not looking at toll roads right now. There are a lot of people there already, and we do not have the expertise for those,� Mr. Aboitiz said.

“I think it’s a good move. Its flagship arm, Aboitiz Power, has a lot of cash, and that’s where you would want to go to because infrastructure has a good [rate of] return. And after power, it’s a logical progression that you would want go to other sectors like infrastructure,� Joseph Y. Roxas, president of brokerage Eagle Equities, Inc., told BusinessWorld in a telephone interview yesterday.

In the meantime, Aboitiz Equity Ventures is “optimistic� for 2012 due to the health of its core power business as well as for its banking and food segments through Union Bank of the Philippines and non-listed Pilmico Foods Corp.

“Power prices have been good. We’re still in good shape,� said Luis Miguel O. Aboitiz, Aboitiz Power marketing and trading senior vice-president.

“For banking, we had an exceptional first quarter, so we also expect this year to be a strong year. For food, [first quarter earnings] was a little below expectations because input costs have been rising, but overall, we are still very optimistic this can improve for the year,� the chairman of Aboitiz Equity Ventures, for his part, said.

Shares of Aboitiz Equity Ventures slid by 0.60% to P49.70 yesterday while Aboitiz Power shares were traded unchanged at P33.90 each.