Manila Water focuses on VIPs

MANILA, Philippines – Ayala-led Manila Water will focus on the VIP countries — Vietnam, Indonesia, Philippines — in its future expansion plans, said the company’s president and CEO Gerardo Ablaza.

Speaking at the water company’s stockholders meeting on Monday, April 15, Ablaza said that, for now, their strategic priorities are the VIP countries particularly the Philippines.

“In terms of prioritization, my desire is that we see more opportunities first in the Philippines. There are many areas outside of Metro Manila, which don’t get the kind of reliable consistent good quality water that we experience here in Metro Manila. Our first priorities are other Philippine metros, that’s why we have undertaken the Cebu project,” said Ablaza.

Ablaza said they are eyeing metropolitan areas with a population concentration of half a million people of which there are about 15.

Vietnam

Manila Water’s initial foray into the regional market was through a 5-year leakage reduction contract with Saigon Water Company (SAWACO) in 2008. The company then acquired a 49% stake in Thu Duc Water BDO Corporation (TDW) in Vietnam in December 2011.

TDW is one of the largest private bulk water suppliers in the northern part of HCMC having a 50 year supply contract with SAWACO at a minimum consumption of 300 million liters per day.

“Leveraging our expertise in the water sector, we completed the acquisition of a 47.35% stake in the new 200mld Kenh Don bulk water treatment plant in Vietnam,”  said Fernando Zobel de Ayala, chairman of Manila Water in a statement to its stockholders.

Indonesia

“We also signed a share purchase agreement subject to regulatory approval for the 51% stake of Suez Environment in PT PAM Lyonnaise Jaya or Palyja which is the West Zone concessionaire in Jakarta. We believe these are good strategic entry points to the water sector region,” Ayala added.

In early March 2013, Manila Water purchased a majority stake in PAM Lyonnase Jaya (PALYJA), one of the two water utility operators in Jakarta.

In a disclosure to the Philippine Stock Exchange, Manila Water said it had signed a share purchase agreement with Indonesia’s Suez Environment to acquire the latter’s 51% equity in PALYIA.

“The priority in Indonesia is Jakarta. There will hopefully be other opportunities to open up outside of Jakarta and Indonesia,” said Ablaza.

Ablaza said beyond those priorities they are being selective due to a limited amount of human resources.

Philippines

Within the Philippines, Manila Water has so far focused on Manila, Boracay, Cebu, and Laguna.

Boracay. Manila Water entered into a joint venture with Tourism Infrastructure and Enterprise Zone Authority (TIEZA) with shareholdings of 80% and 20% respectively. In 2008 it also entered into a concession agreement with TIEZA covering the provision of water and wastewater services in the Island of Boracay.

Cebu. The company entered into a joint venture with the Provincial Government of Cebu (PGC), with shareholdings of 51% and 49% respectively. In 2012, the Manila Water Consortium entered into an agreement with the PGC to develop, operate and maintain the bulk water system that will supply 35 mld to Cebu’s central and northern towns.

Laguna. The company entered into a joint venture with the Province of Laguna, with shareholding of 70% and 30%, respectively. The partnership is to undertake the development, design, construction, operation, maintenance and financing of the water facilities that will serve the needs of the cities of Sta. Rosa and Biňan, as well as the municipality of Cabuyao in Laguna. In Clark Water Corp. – the water and wastewater concessionaire of the Clark Economic Zone in Angeles, Pampanga. It has a 25-year concession with the Clark Development Corp. until October 2025 with the option to extend subject to mutual agreement. – Rappler.com