Aboitiz Group to transfer AEV, AP to Manila

CEBU CITY, Philippines – The Aboitiz Group announced yesterday the transfer of the headquarters of two of its publicy-listed companies to Manila.

Aboitiz Equity Ventures (AEV) and Aboitiz Power Corp. (AboitizPower) are two of the most profitable companies under the flagship of the Aboitiz Group, which has been based in Cebu for over 90 years now.

“With the acquisitions in the past few years, over 70 percent of our profits come from businesses in Luzon. We have transformed ourselves from a regional company to a national enterprise, having to transact more with stakeholders based in the capital. Our main market and customers for electricity are in Luzon,” said AEV president and chief executive officer Erramon Aboitiz.

The transfer of the two listed companies will not mean a total relocation of the entire Aboitiz Group headquarters, but the move will affect about 200 personnel who will be asked to decide if they want to relocate to Manila, or be transferred to another business unit that is based in Cebu.

AEV recently sold its shipping and logistics unit – the Aboitiz Transport System (ATS) – to Negros Navigation, in order to focus on its core and more profitable businesses – power generation, banking, and food.

According to Aboitiz, reducing the frequency of travel to transact with Manila-based stakeholders will enhance employees’ efficiency and productivity.

“Our growing investments in Luzon, however, are demanding more and more of our 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 effective,” added Aboitiz.

Considering that it is also hard for the their family to decide “emotionally” on this business matter, just like when they decided to let go of its shipping arm, which has been the company’s iconic business since it started, Aboitiz said the move to Manila has been a discussion for generations.

“We feel it is high time to make the move,” he said.

In a press conference held yesterday at the Aboitiz Group headquarters, Txabi Aboitiz, AEV chief human resource and quality officer, said that while the transfer was a challenging and difficult decision to make, the company will extend whatever assistance is necessary to help employees who will be affected by the relocation.

The relocation process is expected to be completed by June 2013.

“Cebu will always be our heritage and our original home. But, as professionals, we sometimes have to make tough calls and do what is best for the business.

“It is our responsibility to our shareholders as well as to ourselves to do what is necessary for what is best for the Aboitiz Group,” said Aboitiz.

This move, will not only affect some core employees that need to be relocated to Manila, but it has also tax implications.

This means that the Cebu City government will lose some tax revenues from the Group. Txabi Aboitiz said they are still calculating how much would the city lose in taxes.

AEV and AboitizPower officials have to travel from Cebu to Manila at least thrice to a week to do meetings, and business transactions in the capital. This has caused some inconvenience, in-efficiency and more stress for the executives to travel back and forth.

“We have to be where the action is.”

In the next few months, the two companies’ team leaders will have to present sound structure for the headquarter relocation, including the set-up of some employees who need not to also relocate in Manila.

Obviously, those departments that will still maintain its offices in Cebu, include the accounting department and information technology (IT).

“We are not in the rush. We wanna make sure that we do it well [the relocation],” said Aboitiz.

The Aboitiz Group, has several companies these include the two publicly-listed firms – AEV and AboitizPower, Aboitiz Land, Tsuneishi Heavy Industries (Cebu) Inc., and Aboitiz Foundation Inc.

AEV’s subsidiaries on the other hand, are; Aboitiz Power Corporation, Union Bank of the Philippines, and City Savings Bank, Pilmico Food Corporation, and Pilmico Animal Nutrition Corporation, among others.