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Aboitiz Construction

The last quarter of 2016 focused on transforming Aboitiz Construction, Inc. (ACI) from its fabrication-oriented image to a full-fledged engineering and construction (E&C) company. With this came the natural step to rebrand the company and change its name from Metaphil. ACI and its kaubans are moving forward into the future with a renewed energy to build a strong company that has growth potential in the E&C sector.

 

2016 Performance

ACI’s net income after tax (NIAT) remained at 8% despite a lower sales growth of 5% in 2016, compared to the 17% sales growth in 2015.

We have improved the order backlog through our synergy with AboitizLand, allowing us to close PHP1 billion in awarded projects. The year 2016 ended with a higher order backlog of PHP3.3 billion, compared to PHP2 billion in 2015.

Our workforce peaked at close to 5,000 kaubans by year’s end. We continue to build our workforce through partnerships with the Technical Education and Skills Development Authority (TESDA), schools, skills training centers, as well as with various barangays for mobile skills trainings. These partnerships have become our ultimate and immediate sources of skilled manpower for various projects nationwide.

 

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We run Cebu’s TESDA welding and pipefitters training center. The academy-industry framework, which addresses the country’s unemployment problem, is our way of giving back. In 2016 alone, 98% of the 490 scholars who availed of ACI’s industry-based trainings were gainfully employed, boosted by our efforts to assist them in the acquisition or renewal of their National Competency (NC) Certificates from TESDA.

 

2017 Outlook

Timetric’s Construction Intelligence Center (source: Construction in the Philippines: Key Trends and Opportunities to 2020, Construction Intelligence Center)  forecasts that the Philippine construction industry will rise from USD30.2 billion in 2015 to USD47.0 billion in 2020, at a compounded annual growth rate (CAGR) of 9.22%.

 

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The industry is expected to continue to grow over the forecast period (2016-2020). Growth will be supported by the country’s development plan, as well as population growth, urbanization, and favorable government policies regarding public-private partnership (PPPs). Construction activities across the country are expected to remain busy in the next four years.

These estimates give ACI an optimistic view of 2017. In our order books, we see a healthy prospect that is closely aligned with our core competencies in structural, mechanical, and piping works for power plants, industrial plants, as well as modular fabrication for both local and international markets.

Prospects in ports and jetty construction are also on the horizon, with certainty of repeat engagement from long-time customers. We will pursue new markets in site development, civil works, and subcontracted work of various PPPs.

We will use as leverage our track record in fabrication to partner with other E&C and local contractors that do not have the same fabrication capabilities as we have. We see this as an opportunity to develop new competencies as we simultaneously initiate partnerships with players that complement our expertise.

 

Preparing for New Horizons

Although we see stiffer competition in 2017, we are confident that our efforts to make ACI more resilient and more competitive will enable us to survive and thrive afterwards. We will pursue new sources of recurring income by expanding our client base for maintenance work projects outside of the traditional mining and shipping industries.

We will likewise strengthen our synergy with sister companies AboitizLand, Pilmico, and Republic Cement. As ACI builds up its track record in undertaking power plant projects, hopefully, it can also provide the same E&C services to AboitizPower and its subsidiaries.

 

 

Alberto A. Ignacio, Jr.

President and CEO
Aboitiz Construction

 

 

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