The Market Monitor Minding the Nation's Business
Diversified conglomerate Ayala Corp. has embarked on a five-year plan to increase its net income to P50 billion by 2020 through investments in power and transport infrastructure, healthcare and education, and automotive and manufacturing, Ayala Corp. Chairman and CEO Jaime Augusto Zobel de Ayala said.
During the company’s annual meeting, Ayala unveiled the “Ayala 2020” plan, which, he said, will improve shareholders’ return to 15 percent; expand equity earnings contribution of businesses outside its four largest business units to 20 percent; and increase the group’s presence in Southeast Asia to 10 percent of equity earnings by 2020.
Ayala’s investment in the Integrated Micro-electronics Inc. (IMI), one of the largest automotive electronics manufacturing services in the world, has enabled the group to seal a joint venture agreement with KTM AG, a leading global motorcycle manufacturer, to both serve as the exclusive local distributor of KTM products and to manufacture motorcycles for the Philippines and for export to China and Southeast Asian countries.
The Austria-based KTM Group builds and markets a wide range of award-winning off-road and street motorcycles.
“We are delighted to have found a strong and capable Asian partner in the Ayala group, one of the leading conglomerates in the Philippines, a country we view as a key platform for achieving our global growth strategy. Ayala’s capabilities in manufacturing, distributorship and dealership, as well as its regional expertise and excellent reputation, make them the ideal strategic partner for our ready to face aspirations.
We look forward to a long and fruitful rela-tionship and plan to rapidly grow KTM and its brands across Asia,” KTM CEO Stefan Pierer said. “Amid the upcoming politi-cal changes, we remain optimis-tic about the overall environ-ment in the Philippines.
Overall, our current businesses have a clear and sustainable growth path in the coming years that we envision will perform above nominal GDP growth,” Ayala said.
“As part of our 2020 plan, we are upbeat about our investments in new platforms, specifically along three clusters: power and trans-port infrastructure, healthcare and education, and automotive and manufacturing,” he added. Over the last few years, Ayala has aggressively invested in the power generation sector, with a target of building 1000 megawatts (MW) of attributable capacity.
The company has also in-vested in the transport-infra-structure sector with tollroads, railroads, and rail payment pri-vatepublic partnership programs (PPPs).
More recently, Ayala ventured into healthcare and education, acquiring Generika and the Uni-versity of Nueva Caceres to build a presence in social infrastructure.
Ayala highlighted three ar-eas where the Ayala group has been and continues to be a major contributor to the economic and social development agenda of the Philippines, which are its con-tinued investments, taxes paid, and employment generation.
Over the last five years, the Ayala group has invested over half a trillion pesos in capital expenditures, investing in busi-nesses that are critical to the country’s economic growth.
It has paid P170 billion in aggre-gate corporate taxes and has given direct and indirect em-ployment to 90,000 Filipinos. Today, it continues to show its confidence to the Philippine economy by earmarking P174 billion in total capital expendi-tures across the group in 2016, Ayala Corp. President Fernando Zobel de Ayala said.
On its tie-up with KTM, Ayala said that, for decades, KTM has been at the forefront of mo-torcycle engineering and tech-nology, building vehicles that are “Ready to Race.” RIZA LOZADA