PHILIPPINE conglomerate Aboitiz Equity Ventures Inc. (AEV) is aggressively expanding its food business to five geographic markets in Southeast Asia while gearing up to enter the Indonesian power sector to support its continued growth.
AEV Senior Vice President and Chief Financial Officer Manuel Lozano said its food subsidiary, Pilmico Foods Corporation, has been exporting flour to Hong Kong, Vietnam and Indonesia.
Lozano said they are keen to add Malaysia and Myanmar as the export destinations for its flour products.
“And hopefully, (we are) looking for acquisitions and investment opportunities in these markets as well. Flour is the first; we look to do that for feeds as well in these same markets,” he told reporters in an interview.
Pilmico two years ago acquired a 70-percent stake in Vin Hoan 1 Fed JSC (VHF), one of the largest aqua feed producers in Vietnam.
“We were also able to invest in Vietnam, in aqua feeds business, so we hope to capitalize on that presence to do more (business) in Vietnam,” he said.
Pilmico is primarily engaged in the manufacture and sale of flour, feeds and their by-products.
Lozano bared that the conglomerate is establishing representative offices in some of the Southeast Asian countries which will conduct marketing operations, determine the areas where product demand will come from and when it will start increasing exports to these countries.
Apart from its food business, Lozano said it is working to penetrate the Indonesian power sector.
“We are looking at a couple of projects in Indonesia; we are looking at geothermal and hydro,” he added. “We are doing feasibility (study) for the geothermal. Hopefully, within the next few months, we will get the results already. If that’s good, then we will probably start investing in that project.”
Lozano believes that Indonesia has growing requirements in terms of food, power as well as infrastructure.
He further said the conglomerate is taking advantage of the huge business opportunities offered by the ASEAN integration considering it is a market of more than 600 million people.
“So if you can expand your market beyond the Philippines and target the 600 million, and you have the right products, the right business, then that can be quite a boost to our expansion,” Lozano said.
“We have big balance sheet already where we can start to look beyond (Philippines) but at slower pace,” he added.
Meanwhile, the conglomerate is earmarking over PHP58 billion in capital expenditures (capex) in 2017, almost the same level for this year, the bulk of which will be used for its power expansion projects.