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JG Summit to sell PLDT shares

Roy — Sun, 15 May 2011 12:15:30 +0000

JG Summit announced last Friday its intention to sell its stake in telecommunications giant Philippine Long Distance Telephone Co. (PLDT) to NTT DoCoMo of Japan. The Gokongwei-led company said it will be selling to NTT DoCoMo the 2.8-percent stake it will receive from PLDT as part of the telecom giant’s deal with the Digital Telecommunication Philippines Inc. (Digitel).

NTT DoCoMo was given the option to purchase the 4.56 million shares of JG Summit in PLDT for P2,500 per share, for a total amount of about P11.4 billion (approximately $263 million), although the deal is still subject to the closing conditions.

The PLDT shares will be issued to JG Summit as part of the P69.2-billion PLDT-Digitel deal that will allow the telecom giant to have a controlling stake in Digitel, the company that also operates the Sun Cellular network. In the said agreement, JG Summit will receive a 12.8-percent stake in PLDT’s enlarged capital.

From the 12.8-percent stake, 2.8 percent will be sold to NTT DoCoMo, leaving JG Summit with 10 percent in PLDT, which still entitle them to single seat in the board. In its disclosure to the PLDT, JG Summit said the transaction gives considerable value to JGS shareholder, yet still having enough participation in PLDT.

NTT DoCoMo, part owner of PLDT, is a leading telecom company in Japan. Under their agreement with JG Summit, it will have the option to purchase the PLDT shares within 30 days from the day they are listed in the Philippine Stock Exchange (PSE) board. The acquisition of the JG Summit’s share is part of the NTT group’s plan to maintain its cumulative stake in PLDT.

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Maggi noodles tested positive for salmonella

Roy — Sat, 07 May 2011 04:21:47 +0000

Nestlé Philippines has voluntarily recalled a number its Maggi instant noodles after some of the tested were tested for possible salmonella contamination. The company said it found traces of salmonella in two batches of the noodle product’s beef variant. “The product recall is a precautionary measure… to ensure the safety and quality of our products,” Nestlé said.

The multinational food manufacturer advised consumers who may have bought Maggi Rich Mami Noodles to contact their hotline at 898-0061 for Metro Manila and 1-800-100-637853 (toll-free) for provincial areas.

Nestlé however said that its products are safe to eat if the cooking instructions properly followed. The batches that were tested positive for salmonella have lot codes 11020598A2 and 11030598A1. The lot code numbers are found at the back of the product pack, between the “Best Before” date and the ingredients list.

Salmonella infections typically affect the intestines, causing vomiting, high fever and abdominal pains. The bacteria can be transmitted from water, soil, animal feces, raw eggs, and raw meat.

Food and Drug Administration (FDA) director Suzette Lazo said their office has already been informed regarding the recall. The FDA also posted an advisory on its websites to consumers who may have bought the product with the specified lot codes to return them to the Nestlé office at Nestlé Center, 31 Plaza Drive, Rockwell Center in Makati, or to its licensed distributors.

Lazo said, “According to law, they have to do this (product recall), when they discover that there is something that would be harmful to consumers. They complied with that law and this is a very responsible thing they did.”

She also said their department has made an extensive investigation to determine the cause of the contamination. “Even if it is a voluntary recall, we have to do our own test and get a report from them every day,” Lazo added.

Based on initial findings, the flavor enhancer that comes with the instant noodles in sachet may have caused the salmonella contamination. Said flavor enhancer has also been recalled in the US.

Pending completion of the investigation, Nestlé has temporarily stopped production of all Maggi noodle products.

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JG Summit earmarked $700 M for its 2011 expansion

Roy — Fri, 06 May 2011 01:00:57 +0000

JG Summit Holdings Inc. is earmarking $700 million for the planned expansion this year. Most of these funds are allocated for its petrochemical and airline businesses.

JG Summit president Lance Gokongwei said the petrochemical business will be the company’s priority in the next three years. JG Summit also has stake in a property developer and may expand into power generation.

With sale of its stake in Digital Telecommunications Philippines Inc. (Digitel) to Philippines Long Distance Telephone Co. (PLDT), the company will also be able to cut its debt by $600 million, giving it “more room” for fund-raising. Also the asset sale is said to be “strategically good for JG Summit because it frees up capital that the company can invest in ventures that potentially will pay a higher return.”

Gokongwei said after the sale of its Digitel stocks to PLDT, “We will be very lightly leveraged. We will have a very good balance sheet.” According to data compiled by Bloomberg, JG Summit has bonds and loans worth P69 billion.

Last December, JG Summit said it may sell 31 percent of its stake in Cebu Air Inc. to fund expansion and pay debt, however, after the Digitel-PLDT deal, the company will have “no immediate” need to sell shares. JG Summit is the majority owner of Cebu Air, the country’s biggest budget carrier.

Gokongwei said JG Summit will invest about $200 million in a naphtha cracker plant worth $700 million that may start operations by 2013, snack and iced-tea maker Universal Robina Corp. may spend $80 million to $90 million, property unit Robinsons Land Corp. will spend as much as $200 million on capital expenditure this year, while Cebu Air will spend around $200 million.

JG Summit also plans to bid for airport projects that the government will be opening to companies for investment, and is mulling to build a power plant for its petrochemical business, said Gokongwei.

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8 companies eyeing the right operate MRT and LRT 1 lines

Roy — Thu, 05 May 2011 05:51:12 +0000

Eight companies are vying for the operations of major Metro Manila train lines. Conglomerate Ayala Corp., San Miguel Corp., and Pangilinan-led infrastructure giant Metro Pacific Investments Corps. are the local groups planning to bid for the P15-billion contract, while five foreign companies have also acquired bid documents worth P500,000 each for the project, according to the Department of Transportation and Communications (DoTC).

The DoTC said that the bidding schedule has been set on July 11. Interested bidders may purchase bid documents until July 11.

The contract being eyed by the bidders involved a five-year operations and maintenance contract for the Metro Rail Transit (MRT) and Light Rail Transit (LRT) line 1. This is the first project under the administration’s public-private partnership (PPP) infrastructure program.

US-based Abratique & Associates, London Stock Exchange-list Serco Group, multinational Jorgman Construction and Development, and Japanese companies Sumitomo and Marubeni completes the list of eight groups bidding for the said license. A total 44 companies, most of which are from abroad, have expressed interest in the project.

But the DoTC kept on trimming down the list by telling companies it deemed not likely to stand a chance to win the contract not to bother joining the bidding. Companies were screened in terms of their financial capability and technical expertise. Companies that were affiliated with other potential bidders were also disqualified from the bidding.

The winner in the bidding process will get the contract to operate and manage both train line for four years with an option extend it for another year.

The DoTC hopes that by bidding out a single contract for the LRT1 and MRT train lines would lead to the integration of the train line. The lack of connectivity between the two lines has been causing inconvenience for the one million passengers that use both train lines every day.

The LRT line 1 runs along Taft Avenue from Baclaran in Pasay City to Roosevelt, Quezon City, while MRT runs from Taft Ave. to North Avenue along EDSA.

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Transport firm to pioneer electric buses in the Philippines

Roy — Sun, 01 May 2011 14:57:44 +0000

Local transport firm Green Frog Zero Emission Transport Corp. dared to take the huge risk in the electric vehicle industry and expressed interest to buy some 3,000 electric buses in the next seven years, with the initial 38 units coming in from China within the year.

Green Frog director Philip Apostol said the 36-passenger buses will be fielded in Makati City with an P8 fare trip. The first 10 buses arriving midyear will ply the Buendia line while the 28 units will take other routes. The buses will initially ply a route that goes along Buendia from EDSA to the South Luzon Expressway (SLEX). Eventually, they will be available to commuters with the whole of Makati.

“The plan is to implement to project within 90 days after the signing of the MOA (memorandum of agreement) with the Makati LGU. This is a PPP (Public-Private-Partnership) with Makati,” he said. Apostol admits that cost of the e-buses was high, but hopes that the government “would work” with them.

He did not disclosed the cost of the electric buses but said that normally, the bigger electric buses would cost $300,000 (P13.5 million) each. Green Frog’s buses, however, will be smaller and would cost less.

The company is seeking tax perks, among other incentives, and a pioneer status from the Board of Investments, to make the project economically viable.

Negotiations by the company with banks and government financial institutions have been started, seeking for the best financing package. It also seeks some guarantees from the Philippine Export Import Credit Agency (PhilExim) to get lower interest rates.

Apostol said the half of the revenues will be coming from advertising income to help keep fares at reasonable levels during the initial roll-out.

Another Green Frog director, Servillano Batac, said talks were also ongoing between government and financial institutions for the mechanics of a “tap-and-go” system for the electric buses. “The idea is that you will be able to use your MRT (Metro Rail Transit) cards to pay our electric buses, just like in other countries,” he said.

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Trans-Asia stock rights offer approved by PSE

Roy — Sat, 30 Apr 2011 06:19:03 +0000

The Trans-Asia Oil and Energy Development Corp.’s plan to raise fresh fund for power generation via stock rights offer was approved by the Philippine Stock Exchange (PSE).

The Phinma-led company got the nod from PSE when the latter posted a memorandum on Friday saying that its board has approved the listing of 1.16billion additional common shares to be issued by Trans-Asia to cover an equity offering to all shareholders. Each eligible shareholder is entitled to subscribe to seven right shares for every 10 existing shares held as of record date of May 18.

The offer price of P1 per share represents a discount of 21.9 percent on the market price of Trans-Asia as of March 21, which was the date the stock rights offer was approved by the board of Trans-Asia.

The net proceeds from the stock rights offer, based on the memorandum, would be used to partly finance Trans-Asia’s equity investment in the planned 135-megawatt clean coal plant in Calaca, Batangas and its investment in Maibarara geothermal power plant.

Trans-Asia tapped on the services of ATR KimEng Capital Partner Inc. to be the underwriter of the stock rights offering which would run from May 30 to June 3 this year.

The Phinma group, which is composed of Philippine Investments Management Inc. and Phinma Corp., the principal stockholders of Trans-Asia, pledged to subscribe to any shares not taken up by other eligible shareholders.

Trans-Asia was originally into petroleum exploration, and later diversified to other industries like cement manufacturing, coal trading and power generation. This year, the company expects to generate a net profit of P482.23 million, which is a considerable increase from the P14.74 million it posted a year ago. Revenue is projected to rise to P1.7 billion from P894 million in 2010.

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PLDT counters Globe’s claim

Roy — Sat, 30 Apr 2011 02:02:45 +0000

The Philippine Long Distance Telephone Co. (PLDT) said the claim of Globe Telecom that the deal between PLDT and Digital Telecommuncations Phil. Inc. (Digitel) would result into the monopoly of the telecom industry is only Globe’s way of protecting its interest at the public’s expense. PLDT criticized Globe’s effort to stop the deal that would allow the telecom giant to take over third-ranked mobile brand Sun Cellular.

PLDT said that the acquisition of Sun would actually result in a more efficient use of network facilities, which would lead to better services at lower costs. “Globe wants to create the impression of an impending monopoly by PLDT, which is not the case,” said Ray Espinosa, regulatory affairs head of the company. “What they really want is for the government to make up for their inefficiencies.”

Earlier, Globe asked the National Telecommunications Commission (NTC) to intervene in the deal between PLDT and Sun Cellular operator Digitel. Globe claimed that a monopoly would emerge from this deal and this could only work for the detriment of the industry and consumers. Globe also said that the deal would give the combined entity 3.5 frequencies for every one that Globe has, creating an imbalance.

Espinosa countered that based on the data available at the NTC, PLDT is in fact 23-percent more efficient than Globe in terms of frequency use. This means PLDT, which has 45 million subscribers, need more frequencies than Globe. He said Globe should instead allow market forces to work and let the consumers decide for themselves which is the better network.

With the claim that the PLDT-Digitel would give them 70 percent control of the market that would eventually kill competition, Espinosa said that at the end of the day, it all boils down on to which network can offer the better service, regardless of the size of the company.

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Aircraft maintenance company to expand facility in the Philippines

Roy — Fri, 29 Apr 2011 22:45:16 +0000

Lufthansa Technik Philippines (LTP) plans to expand its facility in Manila in order to increase the variety of aircraft it can serve, including the Airbus A380, which the world’s largest passenger plane. The Airbus A320, designed for short to mid-range flights, is among the most-used aircraft by local airlines and is ideal for trips to domestic and international destinations within the Asia Pacific.

The aircraft maintenance company, which is a joint venture between Lucio Tan’s MacroAsia Corp. and Germany’s Lufthansa group, said it will be spending $30 million in the next year to expand its facility at the Ninoy Aquino International Airport (NAIA).

The company said the expansion will “boost its capability in servicing the growing range of Airbus models that includes the A320, A330, A340 and A380, which is the world’s biggest and most technologically advanced commercial aircraft.”

For its part, MacroAsia said, “The Philippines will be one of the few places of A380 maintenance in the world, and this definitely cements the country’s place in the global aviation map.”

LTP said that once its expansion is completed, the Philippines’ position and presence in the global aviation map would be enhanced. The company will also be hiring additional 2,700 workers more when its new hangar becomes operational by January 2012.

The expansion will cover a new 8,484 square meter facility which will be built in accordance with the strictest design codes. It will add to LTP’s four existing hangars. This would be able to accommodate one wide-body and two narrow-body or four narrow-body planes all at the same time.

Among the international airlines currently served by LTP are Lufthansa German Airlines, Qatar Airways and Cathay Pacific. Among the local airlines, the company serves Cebu Pacific, Zest Airways, and LTP affiliate Philippine Airlines.

Aside from the Manila hangars, LTP also has an aircraft maintenance facility at the Clark Freeport Zone in Angeles City, Pampanga.

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Globe asks NTC to intervene in the PLDT-Digitel deal

Roy — Thu, 28 Apr 2011 21:37:16 +0000

Globe Telecom, in its letter to the National Telecommunication Commission (NTC), is asking the agency to take a look, and intervene, in the recent acquisition of the Philippine Long Distance Telephone Co. (PLDT) of a majority stake of Digital Telecommunications Phils. Inc. (Digitel). Globe warned that the PLDT-Digitel is threatening to free competition and gravely places at risk the public good, because other significant market influence of PLDT as a result of the deal.

Atty. Rodolfo Salalima, acting as counsel for Globe, referred to Republic Act No. 7925 or the new Telecoms Policy Act, which was enacted into law on March 1995 because of the need for the country to liberalize and demonopolize and to veer away from the monopoly of the dominant carrier which, because of its dominant clout, power, and influence, constricted and stifled, instead of led, the growth and expansion of public telecommunications services in the country.

Salalima quoted the then Senator John Osmena in his sponsorship speech of Senate Bill 11 (which is now RA 7925) that “our telecommunications system has been cited as backward, inadequate, and a major constraint to the global competitiveness of our industries.”

“(NTC) must intervene and act now. It cannot and must not shirk from its legal obligation to intervene in the PLDT/Digitel deal and regular, if not forestall, the deal’s grave implications and impact on free competition and, in the long term, the common good. The inherent police power of the state can and must also be utilized for the common good,” he added.

Salalima stressed that the NTC must start leveling the playing field now in the name of free competition or risk a return to the monopoly of old and precisely abandoned by RA 7925, adding that PLDT’s cellular market share, because of the deal, has now grown to 70 percent, while that of Globe is 30 percent.

PLDT recently acquired 51 percent of Digitel, which owns the Sun Cellular brand, from the Gokongwei Group, and hopes to purchase the remainder from small shareholders during a mandatory tender offer.

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Philippine tuna company acquires US salmon company

Roy — Thu, 28 Apr 2011 13:51:25 +0000

Philippine company Alliance Select Food International Inc. sealed a deal to acquire 100 percent of US company Spence & Co. Ltd., a Massachusetts-based salmon smoking and curing company who specializes in the production of smoked salmon and seafood, prepared in the Scottish tradition of its founder Alan Spence. The company caters to the high-end market in the USA and Europe.

The Alliance, in its disclosure to the Philippine Stock Exchange (PSE), said it had signed an agreement to acquired the US fish company lock, stock and barrel through subsidiary ASFI Choice Foods Inc. for $8.5 million.

Alliance spokesperson Rajat Balain said, “An investment in Spence is another step towards Alliance’s goal of diversifying its product line to enhance shareholder value and ensure future profitability. This will be Alliance’s third smoked salmon venture, making it the largest salmon processor in the region, and will help it establish a beachhead in the lucrative seafood market in the US.”

To partly finance the acquisition of Spence, Alliance will be conducting a stock rights offering. The company already gave the approval for the said offering. The PSE suspended trading of Alliance starting 9 a.m. Tuesday pending the submission of additional disclosure pertinent details on the transaction.

Alliance started commercial operations in General Santos City in Mindanao in 2004, it was formerly known as Alliance Tuna International and engages in tuna processing, canning and export of canned tuna products. It exports to Europe, North America, Asia, Africa and South America as a “private label manufacture,” which means it processes and cans tuna using its customer’s brands.

Part of its overseas expansion in recent years is the company’s aspirations to become a regional food company with a “decidedly Filipino DNA.” Alliance is always on the lookout for opportunities in regional seafood companies with high margins and high-value products.

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San Miguel eyeing NAIA 3

Roy — Mon, 25 Apr 2011 14:41:08 +0000

San Miguel Corp. said it is interested in taking over the operations of the Ninoy Aquino International Airport Terminal (NAIA) 3. San Miguel said it will join in the bidding for NAIA 3 should the government open it for privatization.

In its disclosure to the Philippine Stock Exchange, the company stated, “The company may participate in the privatization of the NAIA 3 in the event the government conducts a public bidding for the said infrastructure-related project.” It added, “As we have previously disclosed to the exchange, the company intends to actively pursue the Public-Private Partnership (PPP) programs initiated by the government.”

The conglomerate has already sent earlier an offer to privatize the NAIA 3, through unit Philco Aero Inc., its joint venture with Korean partners. San Miguel directed its privatization plan to President Aquino and the Manila International Airport Authority (MIAA).

The company now effectively adds NAIA to the list of airport investment it wants. San Miguel has a stake in the developer of Caticlan airport off the famous Boracay Island and has a pending offer to operate the Terminal 2 of the Diosdado Macapagal International Airport in Clark, Pampanga.

San Miguel has been effectively diversifying away from its core food and beverage business, and into heavy and high-growth sectors including telecommunications, oil refinery, power and infrastructure. The company last week sold $900 million worth of equity and convertible bonds to help fund infrastructure investments.

Meanwhile, NAIA 3 was expected to open in 2002 but was mothballed for 6 years due to a legal dispute with the Philippine International Airport Terminal Co. (Piatco), the consortium that built the terminal. The Supreme Court, however, cancelled Piatco’s contract in 2003, resulting in arbitration proceedings filed by Piatco and German shareholder Fraport AG, in Singapore and the US.

The International Center for Settlement of Investment Disputes ruling dismissed Fraport’s arbitration bid in 2007. But the said decision was reversed last year which prompted Fraport to revive its $425-million compensation claim against the Philippine government.

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Pancake House posted P73.66 M net income for 2010

Roy — Sun, 24 Apr 2011 10:41:35 +0000

Pancake House Inc. reported a net income of P73.66 million for 2010, a figure which more than doubled the P35.56 million it posted in 2009. The Lorenzo-owned casual dining restaurant chain attributed the growth to its outlet consolidation and realignment of resources to profit-generating activities.

The company also owns and operates various other restaurant brands, aside from its flagship store Pancake House. These are Dencio’s Kabisera, Teriyaki Boy, Singkit Sizzlin’ Pepper Steak and Le Coeur De France.

Pancake House, in its financial report submitted to the Securities Exchange Commission (SEC), said consolidated revenues slightly went up to P1.84 billion from P1.82 billion due to the increased company-owned restaurant sales. Total system-wide sale of the group amounted to P2.3 billion, which translated to a compounded annual growth rate of 3.2 percent over a three-year period.

However, the company commissary sales fell 5.8 percent to P311 million due to several closure of franchised outlets awaiting relocations. On the other hand, its franchise revenues amounted to P87 million in 2010 compared to P86 million in 2009.

Pancake House management said it was successful in the implementation of its plans and programs such as expanded synergies among the seven brands, strategic purchasing and resource optimization despite the increasing cost of raw materials and supplies, rental and utility rates.

The company’s operating expenses for 2010 rose 6.7 percent to P624 million which it said were due to the rising trend of occupancy costs such as utilities, rent and electricity, among other. The consolidated EBITDA, however, remained strong at P720 million with a sustainable margin of 16.6 percent. This is due to the company’s efforts in mitigating the continuous increase in costs and intensifying its targeted marketing and promotional campaigns.

The group said it would continue to consolidate some outlets or relocate them in more strategic, high-traffic areas such as restaurants in hospitals, international terminals and business centers. As of end-December 2010, it had a total of 171 stores across the country.

Pancake House Inc. reported a net income of P73.66 million for 2010,

a figure which more than doubled the P35.56 million it posted in

2009. The Lorenzo-owned casual dining restaurant chain attributed the

growth to its outlet consolidation and realignment of resources to

profit-generating activities.

The company also owns and operates various other restaurant brands,

aside from its flagship store Pancake House. These are Dencio’s

Kabisera, Teriyaki Boy, Singkit Sizzlin’ Pepper Steak and Le Coeur De

France.

Pancake House, in its financial report submitted to the Securities

Exchange Commission (SEC), said consolidated revenues slightly went

up to P1.84 billion from P1.82 billion due to the increased company-

owned restaurant sales. Total system-wide sale of the group amounted

to P2.3 billion, which translated to a compounded annual growth rate

of 3.2 percent over a three-year period.

However, the company commissary sales fell 5.8 percent to P311

million due to several closure of franchised outlets awaiting

relocations. On the other hand, its franchise revenues amounted to

P87 million in 2010 compared to P86 million in 2009.

Pancake House management said it was successful in the implementation

of its plans and programs such as expanded synergies among the seven

brands, strategic purchasing and resource optimization despite the

increasing cost of raw materials and supplies, rental and utility

rates.

The company’s operating expenses for 2010 rose 6.7 percent to P624

million which it said were due to the rising trend of occupancy costs

such as utilities, rent and electricity, among other. The

consolidated EBITDA, however, remained strong at P720 million with a

sustainable margin of 16.6 percent. This is due to the company’s

efforts in mitigating the continuous increase in costs and

intensifying its targeted marketing and promotional campaigns.

The group said it would continue to consolidate some outlets or

relocate them in more strategic, high-traffic areas such as

restaurants in hospitals, international terminals and business

centers. As of end-December 2010, it had a total of 171 stores across

the country.

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Globe to invest $500 M to improve mobile network

Roy — Sun, 24 Apr 2011 06:57:15 +0000

Mobile service provider Globe Telecom is investing $500 million to improve the quality and capacity of its mobile network infrastructure throughout the country. Company officials said the network quality will be top priority of Globe this year.

As part of the company’s network transformation program, Globe is making one of its biggest network investments in quality and capacity to date, where the significant amount will be used for capacity buildup, network modernization and optimization. These upgrades would provide subscribers better experiences in call, text and data services in 2G, 3G and 4G.

Globe earlier announced a major expansion of its current 4G footprint with the country’s first commercial rollout of 4G mobile technology. At its initial phase, Globe utilized the global standard HSPA+ Globe allots or Evolved High-Speed Packet Access for its 4G mobile network.

HSPA+ is a 4G wireless mobile, high speed broadband technology that allows for peak theoretical download of up to 21 Mbps with upgradeability for 84 Mbps which would complement the company’s existing 4G WiMAX (Worldwide Interoperability for Microwave Access) network. Under the Globe HSPA+ network, subscribers are expected to enjoy browsing at a typical speed of 4-6 Mbps with even faster peak speeds.

Globe president and CEO Ernest Cu said, “Our customers are looking for better network quality, and this is what we are giving them. We are making a substantial investment in our network to improve the quality of our services to our subscribers. Certainly, the network on which our services are delivered play a pivotal role in achieving superior customer experience.”

By continuously enhancing their network facilities and operations, Cu explained, their subscribers will enjoy better quality and greater reliability for calls, text messaging and data services. “This year, we are making significant investments in upgrading and expanding our networks. One tangible result of which is the commercial rollout of 4G for mobile, making us the first Philippine operator with a 4G mobile network in the country,” he added.

The 4G HSPA+ rollout expands the foray of Globe into new and up-to-date network technologies to provide its subscribers with high-speed broadband access with the added convenience of full mobility.

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PNOC-EC eyes expansion of coal production

Roy — Fri, 22 Apr 2011 12:35:27 +0000

The Philippine National Oil Company-Exploration Corporation (PNOC-EC) earmarked P900 million for the expansion of its coal mining ventures in Zamboanga Sibugay in Western Mindanao. The state-run oil exploration company said that its board of directors has already approved the special budget “to fund the development of existing coal mine” that will enable it to double its annual production of steaming coal to 500,000 metric tons.

The expansion is in line with company’s mandate to develop more sources of indigenous energy for the country’s needs. PNOC-EC’s coal mine in Zamboanga Sibugay is said to produce the highest grade of coal quality in the country. Developments in the mine are underpinned by the company’s coal operating contracts 41 and 152 as awarded by the Department of Energy.

Aside from its Zamboanga Sibugay mine, the company is likewise engaged in coal exploration and development activities in Isabela and Surigao del Sur via coal operating contracts 122, 141 and 140. PNOC-EC also operates coal terminals in Zamboanga Sibugay, Cebu, Batangas, and North Harbor for its integrated coal trading activities. These locations have been serving as handling facilities for local as well as imported coal which the company supplies to power plants and cement factories.

PNOC-EC is also into oil and gas exploration. It currently holds interest along prospect areas in Cagayan, Ragay Gulf, Offshore Mindoro, Calamian, West Calamian, West Balabac and East Sabina. Its biggest venture in oil and gas development to date is still the Malampaya deep water gas-to-power project. Its Service Contract (SC) 38 for the Malampaya field is only the acreage in the production phase; while the rest are still exploration blocks.

The company is also aligning a budget of $100 million for its next round of investment in the Malampaya project. Given its current financial standing, PNOC-EC noted that it is all set for capital infusion once the project consortium-members comes off for a “cash call.”

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Isuzu Philippines temporarily shuts down production operations

Roy — Fri, 22 Apr 2011 10:22:00 +0000

Isuzu Philippines Corp. (IPC) temporarily stopped its operation, starting from April 18 and will resume production on May 2. The work stoppage was due to the shortage in parts and components supply which are coming from Japan. The country’s all-commercial vehicle assemble is still optimistic though that it would be able to sustain its 17 percent growth target for the year in spite of what happened to Japan.

IPC executive vice-president Yuki Kato said during the exclusive Isuzu Truck show dubbed “On the Right Truck to a Better Future” held recently at the World Trade Center, the temporary work stoppage will not lead to layoff but the 300 production workers will be asked to take this opportunity to avail of their leave credits.

IPC is the latest among local car firms who have announced a temporary shutdown of operations as an aftermath of the Japan disasters that disrupted the supply chain for the auto sector globally. The others were Ford Group Philippines, Honda Cars Philippines Inc. and Toyota Motor Philippines.

The company official stressed that their work stoppage would only be limited to eight working days, since there’s no work on Maundy Thursday and Good Friday, IPC does not work on weekends and that May 1, being Labor Day, is a holiday.

Kato further explained that they cannot yet go back into full commercial operation even if they resume production on May 2 because Japan has a week-long holiday on the first week of May. “Perhaps, we will have a clearer picture on the second week of May,” he said.

The work stoppage would effectively translate to a 50-percent reduction in production volume of IPC for the month of April because they would be operating only for two weeks for the month. The average production volume of the company is between 900 units to 1,000 units of various IPC commercial vehicles.

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PAL is expecting increased number of passengers for Holy Week

Roy — Fri, 22 Apr 2011 07:00:26 +0000

Flag carrier Philippine Airlines is expecting the number of its passenger this Holy Week to be slightly higher than those that they had last year. PAL predicted that from April 17 to April 24, it will fly close to 200,000 passengers throughout its network of 26 international and 20 domestic destinations. The airline also said that it will maintain its regular domestic and international schedules with minor adjustments in domestic flights on Good Friday and Black Saturday.

PAL is expecting its international passenger to exceed 90,000 which reflects a 5% increase compared to its 2010 figure. On the other hand, its total domestic passengers are expected to reach about 100,000, up from its last year’s figure of 97,838.

The airline claims that the positive passenger numbers only indicates their continuing confidence in the flag carrier, in spite of the many challenges they encountered.

The Philippine Airline’s flight for Holy Week (except for 16 domestic flights) will follow published schedules.

In observance of Good Friday and Black Saturday, the following will not be operated:

April 22 – PR131/132 & PR157/158 (Manila-Bacolod, v.v.); PR849/850 & PR855/856 (Manila-Cebu, v.v.); PR185/186 & PR281/282 (Manila-Cagayan de Oro, v.v.); PR187/188 (Manila-Cotabato, v.v.); PR821/822 (Manila-Davao, v.v.); PR139/140 & PR143/144 (Manila-Iloilo, v.v.); PR393/394 (Manila-Tacloban, v.v.); and PR123/124 (Manila-Zamboanga, v.v.)

April 23 – PR843/844 (Manila-Cebu, v.v.); PR181/182 (Manila-Cagayan de Oro, v.v.); PR139/140 & PR143/144 (Manila-Iloilo, v.v.)

For PAL employees who are required to report for duty between April 21 (Maundy Thursday) and April 24 (Easter Sunday), the company said they will get a special incentive pay.

PAL is giving the additional P700 per day on top of the daily rate, holiday pay (double the daily rate) and overtime to those required to work during the holidays.

Those who will be reporting on the said dates include pilots, flight attendants, ground staff, administrative personnel and management officials.

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Ayala invests in hydro-electric power

Roy — Fri, 22 Apr 2011 05:33:57 +0000

Another venture that the Ayala group is breaking into is the hydroelectric power generation partnership. The conglomerate, through its wholly owned subsidiary Michigan Power Inc. (MPI) has entered into a joint venture agreement with Sta. Clara Power Corp., an independent power producer specializing in run-of-the-river power plants. Ayala Corp managing director John Eric Francia confirms this as stated in the company’s disclosure to the Philippine Stock Exchange.

MPI and Sta. Clara will be developing a run-of-the-river (ROR) hydroelectric power projects across the Philippines. MPI will take a 70-percent stake in the venture and has committed an initial equity infusion of about P600 million.

A run-of-the river hydroelectric power plant operation involves “borrowing” some river water to turn its kinetic energy into electricity and returning the same unpolluted water back into the river. Francia said, “It is considered as green because it does not produce harmful emissions. Like other renewable power technologies, it is economical as it depends on the free energy of nature as fuel.”

Speaking on the joint venture agreement, president and chief operating officer Fernando Zobel de Ayala said, “This venture builds on our current portfolio of renewable energy assets, which focuses on solar, wind and hydro power technologies. This is an important component of our plan to create a portfolio of power assets over the medium term that blends conventional and sustainable energy sources and contribute to the country’s energy requirements.”

The Ayala group has ventured into power generation as a key platform for future growth especially as demand for electricity is expected to rise in the years ahead. And since the company has yet to build its expertise in the industry, part of its strategy is forging partnership with other institutions.

In the next five years, the conglomerate plans to build a portfolio of power generation assets that will include both renewable and conventional with a capacity of 1,000 megawatts. Francia said that it is all “in line with Ayala’s campaign to augment the country’s power supply primarily through renewable and clean energy.”

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President wants oil firms to open books to public

Roy — Thu, 21 Apr 2011 11:23:46 +0000

President Benigno “Noynoy” Aquino III yesterday said he wants oil companies to open their books to public scrutiny to prove that they were not taking advantage of the public in their series of oil price increases.

“That was my position ever since I have been in public service, isn’t it? If reasonable, why can’t they show it?” the President told reporters in an ambush interview at the Ninoy Aquino International Airport Terminal 3 in Parañaque where he led an inspection of the facility.

The president also asked the Deparment of Energy (DOE) to find way of simplifying the computation of prices for the benefit of the public. “It will show, demonstrate if prices are right or wrong. And again, they repeatedly answer that all sectors are involved in the computation, face to face, nothing is hidden from them as to how pump prices are arrived at,” Aquino said.

He said the secretary would always tell him that every time that they have been demonstrating the formula on how to arrive at prices, they have been very transparent to include even the militant transport group.

DOE’s director for Oil Industry Management Bureau Zenaida Monsada said the recent price hikes were higher than what the energy department’s computation. The DOE sent letters to the oil firms asking them to explain why they have a higher price increase that what official computation should indicate.

Chevron, after receiving the letter from DOE, rolls back it prices of its oil products a day after increasing the same. Petron, for its part, promised to freeze its prices during the Holy Week. “We have no plans of increasing this week,” the company said.

Meanwhile, Unioil Petroleum Philippines Inc. is offering its gasoline products for P50 per liter for a minimum of P1,000 purchases. The company said the promo is in line with its commitment to corporate social responsibility.

Aside from the request to open their books, the government is also planning to issue an executive order that would ban further oil price increases.

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Government plans EO to freeze oil prices

Roy — Thu, 21 Apr 2011 08:58:35 +0000

In response to the steady rising of oil prices, the Aquino government is planning to resort to “extreme legal measure” by issuing an executive order that would ban further oil price increases. The same has been done during the Arroyo administration when Executive Order was in issued in 2009 to freeze oil prices.

Department of Justice (DoJ) Secretary Leila de Lima said, “Talking about possibilities, there’s always such a possibility of coming up with an executive order freezing the oil prices. If it comes to that, it will basically and primarily be an executive decision or action.” She further added that such a measure would be “legally feasible.”

The DoJ, together with the Department of Energy (DOE), has mandates under the oil deregulation law to ensure that the oil price adjustments are reasonable.

The warning on an executive order to freeze oil prices came after the DOE demanded an explanation from oil firms whose recent price hikes were found out to be above the energy department’s prescribed adjustments based on a similar formula used by local firm. The Tuesday price increase was the 13th price hike implemented by oil companies this year.

Oil firms Shell, Chevron and Total increased prices of regular gasoline by 70 centavos liter; unleaded gasoline, 60 centavos; diesel, 25 centavos; and kerosene, 40 centavos as 6 a.m. on Tuesday. Per DOE’s computation, price hikes should have only been P0.16 per liter for diesel and P0.39 for gasoline.

Chevron, after receiving the letter from DOE, rolls back prices of regular gasoline by P0.70 per litter, unleaded gasoline by P0.60, diesel by P0.25 and kerosene by P0.40 by noon of Wednesday.

De Lima reiterated the plan to up a new body which will be called “DOJ Office for Competition,” which she said would “address cartels and restrictive agreements.” The proposed body would conduct “fact-finding investigations and determine whether violations of anti-trust and related laws are being committed by persons, natural and juridical.”

“Deregulation or privatization does not mean big business is free to do anything under the sun. Public welfare is paramount,” she stressed.

“This body will faithfully carry out constitutional and existing legal provisions against combinations in restraint of trade. Proceedings will depend on the specific industry and/or nature of the case,” De Lima added.

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Ayala Corp. allots P79 billion for its capex

Roy — Tue, 19 Apr 2011 04:51:18 +0000

Giant conglomerate Ayala Corp. allots a record-high P79 billion for its capital expenditures this year. The company said it is in an excellent position to delve into various investment opportunities. It is particularly eyeing the power and infrastructure sector.

During the annual stockholders’ meeting, chairman Jaime Augusto Zobel de Ayala said that while the company is quite successful in its traditional markets which continue to grow, the favorable economic environment has “also ushered a renewed interest to invest in sectors that are critical to sustaining and raising the country’s growth trajectory, particularly with the government’s emphasis on increased private sector participation in the infrastructure and power sectors.”

He added that the group’s ultimate goal is to broaden its customer to reach and diversify its portfolio in a manner that creates developmental impact and economic value both for the corporation and the society as a whole.

The company first took a plunge in the power industry in 2010. It is now aiming to build its power portfolio using both renewable energy sources and traditional fossil fuels. “We are in the process of developing focused platforms across various technologies such as solar, wind, both large-scale and mini hydro, as well as thermal energy with the intent of balancing cost of energy delivery with sustainable practices,” Zobel said. The group aims to put up power facilities that can generate over 1,000 megawatts of electricity over the next five years.

The conglomerate remains on the lookout for opportunities apart from the power industry, like in the transportation infrastructure space, particularly whose which may have strategic value with other business units.

The company is bidding for a contract to operate and maintain the 17-kilometer Line 3 of the Metro Rail Transit (MRT3), which has an estimated cost of P6.3 billion. The MRT3 is one of the infrastructure projects being offered by the government under the public-private partnership (PPP) program.

Meanwhile, president Fernando Zobel de Ayala, for his part, said the highly diversified conglomerate has a healthy cash level, which stood at P29 billion as of end-December last year. “We maintain a highly flexible funding position that allows us to make sizable investments in new sectors moving forward without impairing value-enhancing initiatives such as our ongoing buy-back program, dividend payouts and meeting our funding requirements.”