RAZON-LED Manila Water Co., Inc. is looking at further expanding its reach to overseas areas where its affiliate firm has business exposure, and where the Philippines shares similar economic and cultural characteristics, a company official said.
“We’re looking at Latin America and Africa,” Manila Water Chief Administrative Officer Roberto R. Locsin told reporters on Friday.
He said the water company, which serves Metro Manila’s east zone, is studying countries where International Container Terminal Services, Inc. (ICTSI) operates, as candidates for its expansion since partnerships with local entities already exist.
Manila Water and ICTSI are both chaired by Enrique K. Razon, Jr. The billionaire businessman took over control of the water company from the Ayala group in a series of transactions, starting with his group’s subscription to shares in Manila Water in February 2020.
Mr. Locsin said Manila Water would “leverage” the regulatory expertise of ICTSI “on the ground.”
“The preference is management control,” he said about the company’s strategy to further expand overseas.
“We want to make sure that our style is the style that gets embedded in the local team,” he said. “That’s the value of what we’re trying to do — export the talent.”
Incorporated in 1987, ICTSI operates and develops the Manila International Container Terminal, which handles international container cargo at the Port of Manila.
“Latin America is a big target if you take a look at the big economies like Mexico, Colombia,” Mr. Locsin said.
He said ICTSI is also “all over Africa,” making the continent a possible expansion target since its nations have similar economic characteristics as the Philippines.
Based on its annual report, the port operator has exposure in various countries including Madagascar, Pakistan, Australia, the Democratic Republic of Congo, Mexico, Brazil, Nigeria, and Iraq.
“We’re doing a lot of work now. The deal pipeline is healthy. It’s just that these things take time,” Mr. Locsin said.
Before further expanding overseas, he said Manila Water is likely to launch a few projects in the Philippines.
“We’d like to close a few deals before the end of the year,” he said, without disclosing details.
He said Manila Water is coming up with a new local project by the end of the first half.
“There could be water district, there could be bulk [water] supply, so if you look at the water value chain, we have water supply, we have water distribution, sanitation, sewage, and then other services,” he said.
Manila Water’s wholly-owned subsidiaries include Manila Water Philippine Ventures, Inc., the holding company for domestic operating units including those that have bulk water supply deals in Clark, Cebu, Boracay, and Davao; and Manila Water Asia Pacific Pte. Ltd., the holding company for international ventures, which include Indonesia, Thailand, and Vietnam-based affiliates and associates.
Manila Water earlier this year said that it had spent P13.7 billion last year to improve its service coverage, up 28% from its record capital expenditure the earlier year since the Philippine capital’s east zone water service was privatized in 1997.
For 2021, Manila Water recorded an attributable net income of P3.67 billion, down 18.4% from P4.5 billion the earlier year.
Revenues dropped due to lower billed volume across all segments in its east zone concession area and lower customer consumption due to the pandemic.
Shares in the company dropped 1.35% or 24 centavos to close at P17.60 each on Friday. — Victor V. Saulon
