Manila Water to supply water in Laguna
Posted on July 21st, 2009
Manila Water Co. has expanded its distribution network toward Southern Luzon as it acquired 70% of Laguna AAA Water Corp. That is through the acquisition of the water utility of 100% of AAA Water Corp. — 65% from Asia Water Ltd. and 35% from All Asia Development Corp.
AAA Water owns 70% of Laguna AAA Water, which it runs in a joint venture with the Laguna province who owns the remaining 30%. Because of the acquisition, Laguna AAA Water is now 70% owned by Manila Water.
The amount involved in the transaction was not disclosed by Manila Water. According to Luis Juan B. Oreta, Manila Water chief finance officer and treasurer, there is a confidentiality agreement included in the deal.
The concession of AAA Water Corp. started in 2007 and it has a 25-year contract to supply water to the city of Sta. Rosa and the municipalities of Biñan and Cabuyao.
“The potential for growth is extremely high, as the area is currently underserved. At the moment, only 120,000 people out of a total 600,000 population are currently being served by the existing water network,†Manila Water said. The company also said it would invest P2.5 billion on the firm in the next 10 years.
Mr. Oreta said the revenue gains from the Laguna project would be a “significant contributor in the future.†“These are the very progressive areas of Laguna. It’s a new growth area in the South,†Mr. Oreta said.
Big companies like those of Nestlé Philippines, Inc., Coca-Cola Bottlers Philippines, Inc. and Ford Group Philippines, all have industrial plants in the Sta. Rosa, Biñan and Cabuyao area.
Mr. Oreta said the company is actively seeking to expand operations outside its east zone concessions area in Metro Manila. “This is part of our new business development program,†he said.
Last April, Manila Water was able to get 25-year contract to operate the water and wastewater facility in Boracay, under a joint venture agreement with the Philippine Tourism Authority. It is also currently seeking a water supply deal in Cebu. “Bidding will start in the third quarter. We could service roughly 25% of the total water demand of Cebu province,†Mr. Oreta said.
