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Friday, September 27, 2002
‘No dramatic change’ in WG&A operations after buyout
By Cherry T. Lim
THERE will be no big change in the operations of William, Gothong and Aboitiz (WG&A) after Aboitiz Equity Ventures Inc. (AEV) completed its buyout agreement with the Chiongbian and Gothong Groups for majority ownership of the largest shipping company in the country.
“There will be no real dramatic change because the management hasn’t changed.
Our strategy and vision remain the same—to create a world-class ferry operation within the Philippines,” Erramon Aboitiz, AEV chief operating officer and executive vice president, told Sun.Star yesterday.
AEV is the publicly listed holding company of the Aboitiz Group, which now owns some 90 percent of WG&A.
He said there was also no basis for talks that the buyout had created a monopoly.
“In fact, we will have more competition” because Carlos A. Gothong Lines Inc. (Cagli) has returned to the shipping business.
Last Wednesday, Cagli announced its comeback with the launch of m/v Butuan Bay, which will ply the Cebu-Nasipit-Butuan route with a side trip to Jagna, Bohol. Cagli is also negotiating for the purchase of two more vessels from Japan.
WG&A, which serves all the major domestic ports, controls “nearly 50 percent” of the passenger traffic in the areas it serves. For cargo traffic, it controls about 40-45 percent in the areas it operates.
Aboitiz revealed that the buyout simply had the effect of giving AEV “a more balanced portfolio.”
In 2001, he said, AEV’s power firms made up 65 percent of its business, followed by banking with 22 percent, food with 10 percent and transport, three percent.
The plan is to have the share of power firms go down to about 50 percent by 2007, with banking still making up 20 percent of the business, transport increasing to 20-22 percent and food, eight percent.
New name
Aboitiz also said WG&A would be renamed this year.
He also expected an increase its efficiency with the transfer of its operations in Manila to the South Harbor from the North Harbor in November or December.
An unused portion of the South Harbor, which is an international port, had been converted for domestic shipping.
Aboitiz then debunked claims by Rep. Willie Buyson Villarama (2nd District, Bulacan) that Philippine Ports Authority (PPA) General Manager Alfonso Cusi had given WG&A special favors.
Exclusive
In a speech during the Distribution Management Association of the Philippines conference last Sept. 19 at Edsa Shangri-La Hotel, Villarama had accused Cusi of approving the conversion of a portion of the South Harbor “for the exclusive use of WG&A for domestic operations.”
However, Aboitiz explained that WG&A had been forced to move out of the North Harbor because the latter was being modernized.
“As of now, we’re the only one (who moved to the South Harbor),” he said, adding that WG&A would probably not return to the North Harbor after the modernization.
He also belied claims by Villarama that WG&A was given by Cusi “an onerously low rate of P12.50 per square meter per month where the rental rate of the property (at North Harbor) stood at P123.70/sqm.” for 2001.
Aboitiz said WG&A had simply “inherited” the lease contract from Vetyard, a subsidiary of William Lines Inc. The contract expired during the Estrada administration.
On renewal, “the rental increased from P12 to over P20, and it was not signed by Al Cusi. It was signed by (then president Joseph) Estrada and Johnny Peña,” the PPA general manager at the time, he said.
Villarama had revealed that Cusi was a vice president and had close business ties with the Aboitiz conglomerate before his appointment as PPA head.
Aboitiz added that the over P20 rate was reasonable because the space was a squatters’ area.
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