Phinma charts renewed growth track

MANILA, Philippines - Once one of the most powerful business conglomerates in the country, the Phinma Group of Companies said it has no plans of reliving its glory years as a cement manufacturing powerhouse nor of entering into new and untried waters, but would rather expand on its present endeavors.

Phinma president and CEO Ramon del Rosario Jr. told The STAR that much as the cement industry seems to be a lucrative business at the moment with the construction and infrastructure boom, it will be very hard for a local player to compete with big foreign players with vast networks who dominate the sector.

Phinma, which used to control the cement manufacturing industry in the Philippines, sold its cement business to what is now known as the Holcim Group. After selling its flagship business, the Del Rosarios, together with Oscar Hilado, who now chairs the Phinma Group after turning over the CEO post to Ramon five years ago and vice-chairman Magdaleno Albarracin, decided on what to do next after cement, but still be part of nation building.

With the slogan “Life Can Be Better,” the Phinma Group is now into affordable housing via Phinma Properties Holdings Corp., affordable energy through publicly listed Trans-Asia Oil and Energy Development Corp., low-cost but quality education through the Phinma Education Network (PEN), affordable tourism through Microtel Inns & Suites (Pilipinas) Inc., the business process outsourcing (BPO) space through One Animate Ltd./Toon City Animation Inc, and roofing via Union Galvasteel Corp.

“We are happy with our present business and we have no plans to go back into cement manufacturing. Nor do we intend to go into mining, although we did take a look at it,” Del Rosario said.

Group chairman Hilado said Phinma has reengineered itself after finding that it was the appropriate time to bring to a close a generation of Phinma when it was engaged in industry.

“It is still a work in process and the returns are yet to come. The best is yet to come as far as Phinma is concerned. But we take pride in what the company stands for and we are proud of what the new generation has been doing,” he said during a rare get-together with select newspaper publishers and editors yesterday.

For his part, vice-chairman Albarracin said the values that have helped the company even while it was heavy in manufacturing have endured, particularly the passion to get results despite obstacles, and with integrity.

“The late Ambassador (Ramon) del Rosario (Sr.) and Mr. Hilado do things not because it is convenient but because it is the right thing to do. They never tried to get government to intervene to advance the business so that when we look at the mirror, we like what we see,” he stressed.

The group’s affordable housing arm, Phinma Property, has so far built and delivered more than 6,500 condominium units, increasing to more than 8,000 when its three ongoing projects are completed by early next year.

According to company president and CEO Willie Uy, net income reached P52 million on revenues of P701.6 million in 10 months this year. Last year, total revenues reached over P1 billion, while net income registered at P112.8 million. Its ongoing projects include Fountain Breeze in Sucat, and Sofia Bellevue and Flora Vista, both in Quezon City.

Uy also revealed that they are exploring other urban areas like Cebu and Davao and are planning to develop other 10 to 15 storey condos for small, inner city lots. They also plan to diversify into affordable house and lot development using technology-based construction and offering the same value-for-money proposition as condos.

Meanwhile, Trans-Asia, led by Francisco Viray, reported that net income for the first 10 months of the year reached P263 million, as against last year’s 12-month bottom line of P88.4 million. Revenues for period stood at P1.16 billion as against full year 2008 revenues of P1.66 billion.

Trans-Asia operates two power plants in Bulacan and Guimaras and is spearheading renewable energy development, especially in wind power. Viray said 10 service contracts for wind power projects with potential generation capacity of 227 megawatts have been awarded to the company’s subsidiary Trans-Asia Renewable Energy Corp. by the Department of Energy, which are expected to be operational two to three years from next year. Trans-Asia also has three petroleum service contracts.

During yesterday’s briefing, Toon City president Rogelio Salazar revealed that One Animate, its parent, will post losses of around P6.8 million as against revenues of P150.88 million. One Animate was incorporated only in 2008. Toon City is one of the leading players in the 2D and 3D animation outsourcing sector, and counts Walt Disney, Universal Studios and Warner Brothers as some of its clients. It is also currently the main revenue driver of Phinma’s investment in the BPO sector.

Phinma subsidiary Microtel Inns Pilipinas (MISPI) is the Philippine master franchise holder for the service brand Microtel Inns and Suites. Another subsidiary Microtel Development Corp. (MDC) is an all-Filipino hotel management company and co-owns some of the Microtels in the country.

For the first 10 months of 2009, MISPI posted a net income of P2.6 million and revenues of P12.5 million as against 2008 full year net income and revenues of P6.1 million and P19.3 million, respectively. MDC, on the other hand, generated a net loss of P15.4 million during the 10-month period as against a full-year 2008 net loss of P17.9 million. MDC revenues during the first 10 months of 2009 are at P8.3 million as against P9.4 million for the whole of 2008.

Hotel group head Jose Mari del Rosario said they plan to add General Santos City and Libis in Quezon City next year to their growing list of sites for their value-for-money hotels. The one in Mall of Asia is opening in March. “Metro Manila can accommodate probably four to five Microtels,” he added.

Another subsidiary, Union Galvasteel Corp. generated P122.8 million in net income during the first 10 months as against full year 2008 earnings of P140.3 million. Revenues for the period are at P2.14 billion compared with P2.7 billion for the whole of 2008.

Meanwhile, the Phinma Group is out to prove that education can be good business if managed properly with its four schools, namely Araullo University in Cabanatuan, Cagayan de Oro College, University of Pangasinan and University of Iloilo showing good returns so far.

PEN president Chito Salazar said they are focusing on lower middle to lower income markets as well as on globally in-demand professions. “We aim to be the Southwest Airlines of education - bare bones, no frills, brass knuckles, but quality education,” he said.