Bacnotan to acquire animation services firm

Bacnotan Consolidated Industries Inc. (BCII) is acquiring an 80-percent stake in One Animate Ltd., a Hong Kong company engaged in business process outsourcing for animation services, for a total consideration of $6.73 million.

BCII told the Philippine Stock Exchange that its board approved yesterday the proposal to invest in the shares of One Animate.

One Animate owns 95-percent interest in Toon City Animations Inc., a 15-year old Philippine animation studio that provides services to clients like Walt Disney and Universal Studios, among others. Toon City provides 2D, Flash, and 3G CGI animation services for various television, direct to video, and theater feature release production.

The investment is BCII’s first venture in the business process outsourcing (BPO) space.

BCII’s principal activity is producing, distributing, marketing and selling clinker, cement and galvanized and pre-painted steel coils and sheets for commercial and industrial applications. The group also operates an educational institution and is engaged in the businesses of paper and packaging industry, property development and reinforced steel bars manufacturing.

The company earlier announced that it plans to go into BPO services in the architecture, engineering and accounting fields, which it would pursue under Phinma Finance and Accounting Outsource Corp. and Phinma Architecture and Engineering Outsource Corp.

BCII president Ramon del Rosario Jr. said the BPO sector is an industry with a bright future for the Philippines. “I guess we are proud of our ability to manage enterprises and people. We have been in the services industry for quite some time. We think this is the type of operations that lends itself to our type of skills and strength. Also we think it is a good mechanism to create employment,” he said.

He said the pace by which BCII can grow the BPO business “is not so clear yet” but it intends to start this venture within this year “at a fairly modest scale.”

Del Rosario said BCII is trying to develop a strategy on how to go about this as the company is still open to the possibility of acquiring an existing business or it may have to build it from the ground up.

At end-March 2008, the company’s net income fell 178 percent to P37 million due to the decrease in the dividend income of the parent company. Of the period’s total earnings, P25.6 million was income attributable to the equity holders of the parent company. Equity in net earnings of associates also decreased from P27 million to P7 million this year.

BCII’s revenues for the quarter rose 6.4 percent to P749 million from a year ago due to the increase in sales of Union Galvasteel Corp. (UGC), which reached P55 million, and Bacnotan Industrial Park Corp. (BIPC) at P34 million. Consolidated cost and expenses expanded six percent to P678 million on the back of higher costs and expenses of UGC, Cagayan de Oro College and BIPC.   — Mary Ann Reyes