Biz Buzz: Toll woes
Tollroad industry veteran Jennifer Bote has resigned as president of Public Estates Authority Tollway Corp. (PEATC), the operator of the Manila Cavite Toll Expressway Project—more commonly known as the Coastal Road.
If her name sounds familiar, Bote is also the president of the controversial Philippine International Airport Terminals Co. Inc. (Piatco).
Despite her extensive experience in privately run highways, Bote’s resignation may not have come as a complete surprise to industry stakeholders, given Coastal Road’s current financial woes.
Our sources say Coastal Road is now in dire straits after it supposedly miscalculated the amount of money it could make from the recently opened Coastal Road extension from Las Piñas to Dasmariñas, Cavite.
In a ratings report last August, global debt watcher Moody’s Investor Service noted that 9,000-10,000 vehicles/day that used the toll road from May to July was much lower than the original forecast of 47,000 vehicles a day.
Likewise, the traffic volume of the original section from Roxas Boulevard to Zapote, Las Piñas, was 2-4 percent lower than the same period last year.
Implications? About $160-million worth of debt securities, which the Coastal Road firm issued to fund the construction of the new section, is at stake if its financial picture doesn’t improve.—Paolo Montecillo
SM’s flagship hotel
Not too long after opening “Tatang” Henry Sy Sr.’s dream upscale hotel in Cebu City—one that was more than a decade in the making—the tycoon’s group is now busy planning its next Radisson Blu.
This one will be the flagship hotel of the group and situated right within the Mall of Asia complex. The 400-room Radisson Blu in MOA will rise in three to four years’ time.
Meanwhile, the SM hotel and convention group is also replicating the SMX concept in MOA in key growth areas outside Luzon. Simultaneous with the opening of a new mall in Davao will be the debut of SMX Davao. At around 8,000 square meters, SMX Davao will be slightly less than half the size of the vast convention center in MOA (still huge, don’t worry).
Though tourism is currently the smallest unit among SM’s core business segments, just watch how “Tatang” scales this up.—Doris C. Dumlao
‘Local expat’ expanding
Even as proposals to increase so-called “sin taxes” and to implement stricter labeling rules on cigarettes—both said to be inimical to the industry—continue to await decisions from concerned authorities, the country’s biggest cigarette manufacturer is upping the ante on its business.
Chris Nelson, president of Philip Morris Fortune Tobacco Corp. (PMFTC), said the merger of the erstwhile biggest rivals in the domestic market wanted to expand production of tobacco leaves to areas other than the industry’s traditional base of Northern Luzon.
Apparently, PMFTC wants to contract more farmers in Mindoro in addition to existing planters, as well as in Bohol and Bacolod City, which are greenfield areas as far as growing the cash crop is concerned.
Nelson said that if such plans push through, the number of Filipinos directly deriving their living from the tobacco industry would exceed 2.7 million.
There was some confusion about the first figure—whether it was “two” or “three.” The British executive said: “Dalawa, not tatlo,” pronouncing the words like a local would.
Anticipating the surprise among those gathered around him about his linguistic skills, Nelson quickly added: “I learned that from playing cards.” When asked if he meant poker, he said Tong-its and Pusoy Dos—again saying the words without the imperial twang.
He said he was introduced to these card games when he got married here 22 years ago. “My wife is from Bicol, and I understand everybody gets nosebleed when they speak English. So I thought I should speak the local language, and what’s a better way than by playing cards?”
Ah, if only making and selling cigarettes were as easy.—Ronnel W. Domingo
Aboitiz’ big move
Don’t tell the guys back in Cebu but two publicly listed companies of the Aboitiz Group—Aboitiz Equity Ventures Inc. and Aboitiz Power Corp.—are moving their corporate headquarters from the “Queen City of the South” to Manila.
According to AEV president and CEO Erramon Aboitiz, a major factor for this important move was the steady growth of these companies in recent years.
“With the acquisitions the past few years, over 70 percent of our profits come from businesses in Luzon,” he said.
Aboitiz, who is also president and CEO of Aboitiz Power, said reducing the frequency of travel to transact with Manila-based stakeholders would enhance employees’ efficiency and productivity (the family’s private aircraft notwithstanding).
Apparently, the conglomerate’s investments in Luzon have grown to the point that they are now demanding more and more executive attention.
“By continuing to be based in Cebu, we end up compromising many things in terms of being able to deal with these stakeholders more effectively,” Aboitiz said. “The move to Manila has been a discussion for generations. We feel it is high time to make the move.”
While the transfer was a challenging and difficult decision to make, the company will assist employees who will be affected by the relocation, which will run until June 2013.
No worries for Cebuanos though, as the conglomerate will retain some offices in Cebu and around Mindanao.—Daxim L. Lucas
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