AYALA Corp., a company present in almost all segments of the economy, on Friday said that it is open to partnerships with other conglomerates, especially on projects that are either risky or too large for a single company to pursue.
Jaime Augusto Zobel de Ayala, company chairman, said the scale of engagement by domestic corporations in projects usually carried out by the government has widened significantly compared to more than a decade ago. “If you look at the Philippines five, 10 or 15 years ago, all the big-ticket items were really being handled either by multinationals or by overseas companies,” the executive noted.
“As we get into these much larger items, you’re already talking about numbers that are significantly
larger than one company can handle. So, it makes sense for companies to come together. Increasingly, we’ve seen ourselves working as a consortium. We’ve won some as consortiums. I don’t see that slowing down,” Ayala said.
The top conglomerates, owned by some of the country’s wealthiest families, have formed a consortium to bid for the multibillion-peso Laguna Lakeshore Expressway-Dike Project, touted as one of the Aquino administration’s biggest public-private partnership (PPP) projects to date.
Aboitiz Equity Ventures Inc., real-estate giants SM Prime Holdings, Ayala Land Inc. and Megaworld Corp. recently teamed up to bid for the P123.8-billion expressway and dike project.
Ayala, at the company’s stockholders’ meeting on Friday, said teaming up with the other firms also minimized the attendant risks involved, like when government regulations change with the turnover to a new administration.
“Yes, we will see more of that happening as we move on. Partnerships have been very much part of our culture for decades,” Ayala told reporters.
“In Ayala Land, most of the real estate we developed were done in partnership either with family groups or corporations. Not all Philippine corporates move that way. We would like to develop a culture where we can build trust with a variety of stakeholders, from small to large,” he said.
In all of the PPP projects won by Ayala, only the Daang Hari connector road was pursued solo by the property developer, while the rest were with partner-firms.
The construction of the P2.22-billion Daang Hari-South Luzon Expressway project, now known as the Muntinlupa-Cavite Expressway and the first PPP under President Aquino, however, is still ongoing since Ayala won the project in 2011.
Ayala said it will spend P185 billion in capital expenditures (capex) this year, most of which were earmarked for its property arm.
This was slightly lower than Ayala’s announcement of a record P187 billion in capital spending, as the business ventured into capital-intensive power and infrastructure projects.
The bulk of the planned capital spending was set aside for its property unit Ayala Land Inc., which already announced a record P100 billion in capex, as it pursued its so-called 2020 vision business plan.
The plan supports the property company’s 20-percent annual growth target and hitting the P40-billion net income target by 2020 that more than triples its 2013 profits of just P11.7 billion.
Image credits: Alysa Salen