Outlook 2018 - Infra SMA

Infrastructure

Aboitiz InfraCapital Outlook 2018

Building Opportunities Ahead of the Curve

 

2017 marked the establishment of Aboitiz InfraCapital, Inc. as the fifth strategic business unit of AEV. We faced immediate challenges with the collapse of the Public-Private Partnership market and increased competition in the cement sector. In light of these challenges, we focused on “low hanging fruits” such as the acquisition of both Lima Water Company and a minority stake in Balibago Waterworks Systems, Inc.

 

We also refocused our strategy due to the changing regulatory environment and infrastructure priorities of the country and reorganized the team to adapt to the changing landscape. With our strategic pivot largely in place, we expect that 2018 will be a busy year for us.

Water remains a priority growth area for us. Apo Agua Infrastructura, Inc. (Apo Agua), our 300-million-liters-per-day bulk water project in Davao is expected to complete its permitting works within the first half of the year. In parallel, design works are expected to be finalized within the year. Consequently, our Apo Agua team, in conjunction with AP’s Project Development and Execution team, is gearing up for the start of construction activities that will follow shortly thereafter.

 

 

2018 will also mark Lima Water Corporation’s (LWC) first full year as an Aboitiz InfraCapital company. Our AIC water technical team has completed the post-merger integration process and is now heavily involved with the LWC operations team in improving operational efficiencies; all this is in line with our goal of establishing the Lipa-based operation as the platform for further growth in water distribution sector.

 

We at Aboitiz InfraCapital remain committed to developing the needed infrastructure that will advance the communities we serve across the country. We continue to explore different opportunities in the various sectors we are interested in, namely: water, airports, and roads while developing alliances and synergies to develop our competency in execution and operations.

 

Transportation infrastructure also remains to be a key area of interest. However, and in light of shifts in the government’s infrastructure policy direction we have decided to take a more selective approach towards opportunities in this now unsolicited proposal-oriented market. In this realm, we are teaming up with some of the country’s premier conglomerates to submit an unsolicited proposal to improve operational efficiencies and provide a much-needed capacity increase to the Ninoy Aquino International Airport (NAIA).

Despite the government’s expected massive infrastructure roll-out this year, we expect the cement sector to remain highly competitive with increased pressures from both new local capacity and the continued surge in aggressive imports. In this regard, Republic Cement remains focused on serving its key markets with high-quality products while improving efficiencies and reducing costs to best adapt to this challenging environment. Parallel to this, we continue to work on our operational debottlenecking and capacity expansion projects to meet growing market demand.

 

 

Business development remains a crucial activity for Aboitiz InfraCapital in line with our goal to grow our water and transport infra franchises. We continue to explore different opportunities in the various sectors we are interested in, namely: water, airports, and roads. We continue to work on developing alliances across the country, while we will build up our organization and explore group-wide synergies to develop our competency in execution and operations.

We at Aboitiz InfraCapital remain committed to developing the needed infrastructure that will advance the communities we serve across the country.

 

Sabin M. Aboitiz
President
Aboitiz InfraCapital, Inc.

 

 


AboitizLand Outlook 2018