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In its recently published report, The World Bank described 2016 as “another difficult year” for global trade. Geopolitical risks, changes in U.S. policies, and the U.K.’s decision to leave the European Union (Brexit) are some of the factors that contributed to the downturn in the global economy, which posted its total growth at 2.6%, down from 3.0% in 2015.

By contrast, the Philippines achieved a full-year average GDP (gross domestic product) growth of 6.8% in 2016, outpacing China and Vietnam to become the fastest growing emerging economy in Asia. Despite being a year of transition with the reins of government changing hands, public investments and private consumption in the country expanded while demand for exports and services continued to improve. This gives our country’s economic managers even greater confidence in targeting a 6.5 to 7.5% GDP growth for 2017.

The Aboitiz Group enters the New Year optimistic about our economy and our national leadership. We support government’s efforts to implement the necessary reforms to ensure inclusive growth for the greater good.

 

2016 Business Highlights

Through our value creation efforts, we are poised to take advantage of the tailwind our growing economy brings. The gains we recorded over 2016 affirm the soundness of our four strategic pillars of growing our business, engaging our stakeholders, building human capital, and execution excellence.

AboitizPower launched two new generation facilities last year: the Therma South 300-MW Davao baseload plant in January and the Sacasun 59-MWp solar plant in Negros Occidental last April. We also completed our acquisition of two GN Power coal-fired facilities in Bataan last December, which is a strategic addition to our right-mix portfolio.

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AboitizPower is one of the country’s largest producers of renewable energy. Together with its partners, the Cleanergy portfolio generates 1,263 MW, which is 38% of AboitizPower’s total net sellable capacity. This demonstrates AboitizPower’s commitment to support the government’s push for a balance of renewable and non-renewable power sources to address the country’s increasing energy demand.

UnionBank focused on growing its customer base with innovation through SmartBanking and building a great retail bank; while CitySavings capped off a milestone year of celebrating its 50th anniversary with record-high revenues. PETNET also had a successful year with the launch of its PERA HUB retail brand, a move that highlights its expanded portfolio of services and its proposition for its target market.

Pilmico, being well-positioned at the beginning of the food value chain, has been undergoing aggressive expansion of its core business capacities to support demand from its growing regional footprint.

AboitizLand is on its way to being a national player with new projects in Luzon identified. Likewise, its new partnership with Aboitiz Construction is a step towards greater synergy and a mutually beneficial business model for both companies.

A great amount of energy and resources are being invested into infrastructure in the country, a trend that is likely to continue in years to come. In 2016, we formally launched Aboitiz InfraCapital to serve as our investment vehicle for all future infrastructure-related businesses that make up the fifth leg of the Group and, ultimately, establish our name in this space.

 

Opportunities and Priorities

We are proud that we were able to realize our goals through ways that help our country achieve and sustain its economic targets. This year, the Group will take even more deliberate steps in bringing progress to communities in line with our strategic objectives.

For the power group, we will further strengthen our relationship with customers (current and potential), government, partners, and community stakeholders as we move closer to our target generating capacity of 4,000 MW by 2020.

The banking business unit will continue to maximize financial technology to deliver services that are responsive to the needs of a growing digital economy. Likewise, in financial services, digital innovation will remain integral to providing superior cash and payment-related solutions for Filipinos here and abroad.

As it expands its customer base in the ASEAN market, the food group is also set to benefit from the government’s renewed focus on agriculture, which will enable us to further promote inclusive growth.

Our land business has set high expectations for new and exciting developments across the country, including our joint project with Ayala, Gatewalk Central. We are also very pleased to see the collaboration between our land and construction units, which we think will add to their respective capabilities.

For our infrastructure leg, we remain keen to take part in public infrastructure projects that will be opened in the coming months, which certainly bodes well for our growing cement business. Meanwhile, our bulk water project will continue the process of obtaining permits and strengthening stakeholder engagement.

 

Capex 2017 infograph

 

 

An Organization Conducive to Growth

All our aspirations are only as good as the environment we build, which is why we constantly seek ways to develop our organization to maintain a solid team structure that will advance our cause.

Over the past twelve months, we have pioneered programs in leadership development and workplace mentoring to facilitate knowledge sharing, and prepare our leaders for greater roles and responsibilities in the future.

We also introduced the Aboitiz Talent Management System or ATMS to integrate all our Group’s major human capital management efforts to attract, retain and optimize the best talents who will not only help us manage our businesses, but who will also enable the Group to adapt well to the ever-changing business landscape.

Along with all of these, we embarked on a Groupwide digital transformation to take advantage of disruptive technology and how this will reshape the way we collaborate and do business.

 

Aligning our Culture, Purpose, and Brand

Through all these developments, we are gaining deeper appreciation for the boldness that has brought us phenomenal growth over these years, a growth that has been driven by our culture, our unique way of doing things, The Aboitiz Way. Our culture, a unified purpose, and brand proposition are three hallmarks of a high performing organization. With the increased size of our organization, we believe that now is the opportune time to rearticulate what these mean to us in Aboitiz.

With this in mind, we began 2017 with the unveiling of our Group Purpose and a refreshed brand positioning, which were launched last January 19 at the first-ever Aboitiz Leaders’ Conference attended by 175 leaders from across our five strategic business units.  In that milestone event, we announced our Group Purpose, “To drive change for a better world,” and our refreshed brand positioning, “Advancing Business and Communities.” Ultimately, our goal is to have a Group culture that will unify us and yet allow our individual strategic business units to have their own variation while staying aligned with the culture of the whole organization.

We engaged the services of Gallup, the global research organization, to help us preserve the culture of the Aboitiz Group and to align this across the organization. We seek to create a sustainable change that will build a meaningful distinction of our brand in the marketplace, maximize each team member’s potential, and keep us ahead of our competitors.

 

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We aim to rally everyone to a unified purpose and a well-defined branding execution that are driven by the Aboitiz Way, our culture. Towards this, we will need the help of all our team members to discover new ways to better understand how we can build a great organization and live our purpose. This, we intend to do under our refreshed brand proposition of Advancing Business and Communities.

 

Our inspired, unified purpose will guide all of us as we continue to move forward and remain relevant to the changing times. Advancing business and communities is our ABC, the building blocks that sum up the qualities we want our brand to embody. It is outward looking and highlights how we influence and affect our various stakeholders. More importantly, it is anchored on our belief that the advancement of business and communities is integral to the development of our society, our country, and, ultimately, the global community.

 

While our Passion for Better Ways continues to burn even stronger today, there is still so much more to say about the Group and what is expected of us. In this Outlook 2017 issue, the first fully digital edition of Aboitiz Eyes, the Group’s leaders will give a more in-depth discussion of our efforts toward advancing business and communities over the past year and what lies ahead for 2017 and beyond.

May you gain fresh insight on what ABC means for you as we further drive change and positively affect many more lives towards creating a better world for generations to come.

 

 

Erramon I. Aboitiz

President and CEO
Aboitiz Group

 


 

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