On the Cusp of a Great Transformation

Published June 28, 2022, 2:01 PM

by MB Business

Aboitiz Group President and CEO Sabin M. Aboitiz inspires team members to take part in the Great Transformation journey of the organization.

Among all the successful conglomerates in the Philippines, the Aboitiz Group undoubtedly has one of the richest histories, operating for over a century and expanding successfully from an abaca trading and general merchandise business in the late 1800s to one of the largest diversified firms in the country today.

But its past is not the reason why there is so much excitement surrounding the group these days. It’s the future.

Aboitiz is now well underway on its ‘Great Transformation’, a bold corporate move to put innovation at the forefront of its growth strategy and will usher the firm’s transition to becoming a ‘techglomerate’, or a conglomerate that heavily integrates technology and design thinking in all its production, services, and processes.

Aboitiz Group President and Chief Executive Officer, Sabin M. Aboitiz, explained that the Great Transformation, which will reinvent the group as a start-up-style conglomerate, will be primarily driven by its people through a cultural revolution that aims to combine the vast potential of Data Science and Artificial Intelligence (DSAI) with a deeply curious appetite for knowledge and self-improvement. The result being a much more agile and advanced organization made up of team members who are both highly skilled and personally fulfilled.

Aboitiz Group President and CEO, Sabin M. Aboitiz, takes a groupfie with Cebu-based teammates during the Super Duper Conference, sharing his wisdom about the Entrepreneurial mindset and how it can help the organization transform into the country’s first techglomerate.

“Our Great Transformation into a techglomerate driven by transformed Aboitiz team members – our A-People – will propel our company to the frontlines of modern innovation and beyond, in order to ensure and accelerate our continued growth and success, and to advance business and communities faster, better, and stronger than we ever did in the past or could have ever imagined for the future,” Aboitiz said.

To do this, the company is investing in exponential growth initiatives, a fresh entrepreneurial mindset, and the hypergrowth of its team members via an enabling, exciting, and inclusive work environment. The group is carefully selecting practices and philosophies from Big Tech that would translate well in the context of their own business goals as a Philippine conglomerate, to the point of potentially redefining what that actually means.

On becoming the first Philippine techglomerate

Young tech talents at Aboitiz. Aboitiz Data Innovation is made up of professionals from diverse disciplines—data science, artificial intelligence, behavioral science, data architecture and engineering, and data governance.

Mr. Aboitiz believes that as a techglomerate, the group has a greater responsibility to uplift its own people and the communities they live in and serve – including 20 million customers and counting – by constantly improving their experience of life and work. He consistently stresses that while tech plays a major role, people empowerment and open minds are the key to unlocking a techglomerate’s true potential.

Hoping to instill and inspire a group-wide entrepreneurial spirit, Mr. Aboitiz has launched a galvanizing campaign with a powerful message: that every single member of the group’s workforce plays a vital role in creating something groundbreaking and game-changing for its stakeholders. “A big part of what makes a techglomerate team member is belief. Belief in new and better ideas, belief in a larger purpose, but most importantly, belief in themselves as individuals,” Mr. Aboitiz further said.

Putting the company’s money where his mouth is, Mr. Aboitiz himself approved a nearly 40 million peso budget for all team members to conduct their own innovation experiments either individually or in collaboration with others.

Now bolstered by Aboitiz Data Innovation (ADI), the Group’s new tech startup, innovations of all shapes and sizes have rapidly accelerated across all the business units of the Group, namely AboitizPower, UnionBank, Aboitiz InfraCapital (AIC), Aboitiz Construction, AboitizLand, Pilmico Foods and Gold Coin, and Aboitiz Foundation.

File Photo: For the Aboitiz Group, its team members are the most valuable asset in its Great Transformation.

Across these businesses, Aboitiz has managed to minimize environmental impact through innovation and other sustainability efforts – producing 1,249 megawatts of renewable energy, emitting 0.06 carbon productivity, recycling 4,344 tons of waste, and planting as much as 12 million trees.

AboitizPower – a vertically integrated company engaged in power generation, distribution, and energy supply, and one of the largest private power producers in the Philippines – is currently optimizing energy storage for battery systems, predicting boiler tube leaks in thermal power plants, managing grid risks from vegetation, and improving customer service and account management through data science and artificial intelligence (DSAI). The ultimate goal is to fully exploit the latest technology to bring down electricity costs for consumers.

All these techglomerate efforts and more are folded under AP’s Data Innovation Program, which aims to produce more insight-driven decisions and actions, in line with its mission of delivering reliable, cost-efficient, and environmentally sustainable energy solutions.

On innovations in the banking sector, the Aboitiz Group has always been the leader thanks to UnionBank’s early and aggressive digitalization. Consistently setting the bar for customer experience, the bank continues to expand its self-service and mobile-first banking services through its retail financial platform, UnionBank Online.

Their recent acquisition of Citigroup’s consumer banking business in the Philippines further strengthens the Aboitiz Group’s techglomerate position as it sets the stage for more advanced credit card services through the bank’s ‘Super App’.

Following UnionBank and AP’s lead on the Great Transformation are Aboitiz InfraCapital, the Food Group, AboitizLand, and Aboitiz Construction, who are all undergoing their own transformations centered, among other things, on culture, automation, sustainability, digitalization, capacity-building, and DSAI.

These changes are happening with the help of ADI, the DSAI arm of the Group that serves as the techglomerate’s de facto nerve center.

Established in 2021, ADI is breaking new ground for the Group by exploring and expanding possibilities, and demonstrating what can be achieved when DSAI is operationalized and synergized across all business units.

This year, ADI will boost its efforts through the upskilling of more Aboitiz team members in data science and the exploration of more models for hyper-personalization across industries.

“Because at the end of the day,” Aboitiz concludes, “this Great Transformation is driven by people and for people. The success of our company as a whole depends on the success of our team members as individuals. That’s the techglomerate formula.”

Here are the inside stories on how the Aboitiz Group is using a digital mindset to transform the members of its Group into a techglomerate:

Aboitiz InfraCapital’s LIMA Estate accelerates sustainability, becomes first industrial park to get BERDE 5-star certification

AIC to transform LIMA into a smart, next-generation economic center in the thriving investment hub of Batangas.

Aboitiz InfraCapital (AIC), the infrastructure arm of the Aboitiz Group, bares plans to transform LIMA Estate into a smart, next-generation, future-ready economic center to draw more businesses and green development into the region.

Most recently, LIMA Estate became the first industrial park to achieve the pilot BERDE (Building for Ecologically Responsive Design Excellence) District Certification with a 5-star rating, the highest rating Philippine Green Building Council (PhilGBC) awards to developments. PhilGBC certifies Districts based on their commitment to sustainable development, including the contribution of projects to health and well-being, community engagement, and economic opportunities.

LIMA Land President and AIC Economic Estates Head Rafael Fernandez de Mesa said the move towards sustainable, smart, and future-ready estates should draw more investments into manufacturing and industries that would create tens of thousands of jobs.

“We’re putting our Environmental, Social, and Governance goals at the heart of what we do to enable us to create resilient spaces where we can also ensure the overall health and wellness of our community and the environment,” Fernandez de Mesa said. 

Up to 22,000 additional jobs are expected to be generated for the surrounding communities in Lipa-Malvar, Batangas, following another 57-hectare industrial expansion to accommodate more locators in LIMA.

Concurrently, it is also working with PhilGBC for the BERDE Building Certification of the LIMA Tower One, the first of seven multi-storey office buildings to be built at LIMA’s Central Business District, slated for completion in 2024.

BERDE Technical Manager Rowena Elayda lauds AIC’s commitment to the sustainable development of the built environment.

“It is important for developers of wide-scale projects to incorporate sustainability at the district-level to enable projects, such as the LIMA Estate, to be the catalyst of change on how building owners design, construct and operate their buildings,” Elayda shared.

PhilGBC developed the BERDE program in 2009 to proactively address the adverse impacts of climate change. The program, which has been recognized by the government, established the Philippines’ own national voluntary green building rating system to facilitate sustainable projects.

In addition, LIMA Water Corporation, LIMA Estate’s end-to-end water services provider, is adopting a Smart Water Network, which is projected to lead to even better operational efficiency and savings in terms of deep well operation, auto adjustment of transfer pumps and non-revenue water (NRW) management, ensuring that industrial locators within LIMA Estate will continue to enjoy a reliable and sustainable water supply for years to come.

AboitizLand invests in innovation for sustainable future

Seafront Residences is AboitizLand’s beach community in San Juan, Batangas, master-planned by world  renowned planning, urban design, and architecture firm, DPZ CoDesign, responsible for developing beachside communities such as Seaside, Rosemary Beach and Alys Beach in Florida. This seaside community highlights generously spread amenities including diamond parks fronting Budji+Royal houses, beachfront clubhouse and a commercial town plaza.

AboitizLand, the real estate arm of the Aboitiz Group, is investing big on sustainability and innovation, starting with its flagship development in San Juan, Batangas.

In partnership with Connovate Philippines, AboitizLand recently installed its first precast concrete panels in the housing units of Seafront Residences in San Juan, Batangas.

Aboitiz considers this move a milestone as it continues to innovate and build more eco-friendly houses for Filipinos through the use of precast technology, an alternative to traditional concrete hollow blocks. This will make homes at Seafront Residences more resilient against earthquakes, typhoons, and fires, translating to more savings on home repairs and maintenance and higher future resale value.

Seafront Residences is a 43-hectare beach community that offers a variety of residential units, from houses and lots to villas or beach condominiums.

The project also features a lot of amenities, including diamond parks and a clubhouse designed by Budji+Royal. Soon to rise in the development is a town center that offers retail and food and beverage establishments.

Since its launch in 2017, the property value of a house unit in Seafront Residences has more than doubled, and early investors are now enjoying as much as a 295 percent value escalation of their beach property.

Right now, houses and lots in this project start at P10 million, while residential lots start at P4.6 million. The cost of beach condominiums start at P6.8 million.

In 2021, Seafront Residences was hailed as the Best Housing Development in the Philippines and Best Housing Development in Southern Luzon at the PropertyGuru Philippines Property Awards.

Aboitiz Construction on track to finish massive construction works at LIMA Estate

As part the Aboitiz Group’s Great Transformation, Aboitiz Construction is one of the first construction companies in the country that pursued the digitalization of its equipment on project sites.

The construction works for the second phase of the LIMA Estate (LIMA) expansion is progressing quickly and on schedule, thanks to Aboitiz Construction – the construction arm of the Aboitiz Group – which secured the deal to do the site development works for this massive industrial complex.

This year, Aboitiz Construction is targeting to complete the facility construction works for the expansion of LIMA, a 794-hectare industrial-anchored estate in Lipa-Malvar, Batangas.

To be completed in 2023, the 57-hectare expansion project aims to expand the industrial lot inventory of LIMA to accommodate new businesses in the area and generate up to 22,000 job opportunities.

Last month, Aboitiz Construction also finished constructing another 69kV overhead transmission line project that consists of 37 electric poles for Lima Enerzone (LEZ), the electric distribution utility company operating the distribution systems of LIMA Estate. The project effectively increases LEZ’s reliability and doubles capacity to 100 megawatts (MW). This also provides supply connection redundancy to LIMA, as Line 2 may be used as contingency in case Line 1 is interrupted or vice versa.

Aboitiz Construction is a privately held company that has been operating in the construction and engineering industry for 46 years.

As one of the first construction companies in the country to pursue digitalization of its equipment on project sites, Aboitiz Construction is a vital component of the Group’s Great Transformation to a techglomerate.  

Enabling and Accelerating Aboitiz’s Great Transformation through DSAI

Together with Republic Cement, Aboitiz Data Innovation developed and deployed the 28-Day Compressive Strength Predictive Modeling Tool —leading to better-managed resources, increased efficiency of raw materials usage, producing a more consistent cement product, and most importantly, effectively reducing Republic Cement manufacturing plants’ CO2 emissions by approximately 20,000-40,000 tCO2 annually.

Aboitiz Data Innovation (ADI), the Data Science and Artificial Intelligence (DSAI) arm of the Aboitiz Group, developed and deployed innovative solutions with a number of business units across the Group, creating new opportunities or tackling business, environmental, social, and governance challenges. These include promoting financial inclusion together with UnionBank through Enhanced AI-powered Alternative Credit Scoring and Risk Models, and improving operational efficiency and environmental sustainability in cement manufacturing plants through the 28-Day Predictive Strength Model, to name a few. Other projects like the Data Science Upskilling Program under SN Aboitiz Power’s Data Acquisition, Reporting and Analytics—or “DARna”—Program also pave the way for the development of future-ready talents.

In an effort to unlock and synergize Aboitiz ecosystems, ADI launched Parlay, a data exchange platform that will significantly accelerate efficiency, quality, and productivity across all the conglomerate’s subsidiaries and moving parts.

Adding value to the Group’s techglomerate premium, Parlay will provide easy access and sharing of vast, varied, and valuable data resources across the Group’s entire ecosystem.

“Data is the business of the present. With Parlay, we’re really excited about providing a place where you can exchange the reams of data you have collected for something even bigger and better — an infinite number of possibilities,” said ADI Managing Director Dr. David R. Hardoon.

Under the first phase of this project, ADI will focus on onboarding all the businesses of the Group to Parlay, while the next phase targets to open the platform to external organizations.

Parlay was built on a Harbor platform with the objective of creating a centralized place to manage, share, and collaborate on data products across the Group’s portfolio through automated data sharing agreements, the enablement of secure multi-party collaboration, and connecting of data sets to generate new insights.

Established in 2021, ADI aims to take full advantage of data to advance the Group’s digital transformation journey by operationalizing DSAI across all its business units. It plays an integral role in the Group’s ‘Great Transformation’ into an organization that is consistently resilient and future-ready.

Aboitiz’s Food Group set to become one of the leading food and agribusinesses in Asia

Pilmico continues to venture into fast-growing segments such as pet food and aquaculture across the Asian regions.

Pilmico and Gold Coin Group (Pilmico) is on track to becoming one of the leading integrated food and agribusiness companies in Asia as it lays out its transformative expansion plans here and abroad.

Part of this expansion involves acquisitions of facilities in the Philippines and across the entire Asian region spanning China, Indonesia, Malaysia, and Vietnam.

Currently, Pilmico is comprised of four divisions, namely Flour, Feeds, Farms, and Trading, while Gold Coin is a pioneer in animal nutrition and the manufacturing of scientifically-balanced animal feed in Asia.

Moving forward, Pilmico plans to increase its presence in fast-growing market segments like aquaculture, pet food, and specialty nutrition, and grow its business-to-consumer brands such as The Good Meat, Maxime, Woofy, and Tommy.

A new breeder and nursery farm designed to augment swine production will be operational this year. Along with this is the continued expansion of the company’s retail meat brand, The Good Meat, as it targets to distribute its products to 330 supermarket concessionaires by the end of 2022.

The Good Meat currently supplies a wide variety of fresh cuts, marinated pork, and ready-to-cook products in over 250 supermarkets.

In addition to supermarket concessionaires, it also aims to open at least eight brick-and-mortar stores in Metro Manila, including the newly opened branch in Libis, Quezon City.

Aboitiz Foundation launches Byaheng Digiskarte to support MSMEs and Cooperatives through Innovation and Technology

Aboitiz Foundation, the corporate social responsibility arm of Aboitiz Group, is accelerating its efforts to support MSMEs and cooperatives across the country through innovation and technology.

‘Byaheng Digiskarte’ is the micro, small, medium enterprises (MSMEs) and cooperative mentoring program of Aboitiz Foundation in partnership with the Department of Trade and Industry (DTI), Cooperative Development Authority (CDA), Department of Agriculture (DA) and various mentor partners.  The project covers several Aboitiz-supported cooperatives and MSMEs nationwide.

The project, according to Aboitiz Foundation, aims to help enterprises overcome their daily challenges by using mobile phones, the internet, social media, and e-commerce platforms. While a general appreciation of the opportunities offered by digital transformation is emerging, many enterprises continue to lack orientation and fail to prioritize digitization.

At the community level, the farmers need support in keeping up with the times to make them more digitally literate and capable.  In previous months, Aboitiz Foundation partnered with several organizations  in reaching out to more MSMEs and cooperatives.

One of its first projects is a collaboration with MayaniPH and Save the Children Philippines that targets alleviating hunger among impoverished children by providing nutritional boxes while bringing sustainable livelihood to Benguet farmers.

In Benguet, the Foundation partnered with Hedcor, Inc., Session Groceries, One Concord Food Solution, Inc. and SG Farmers Group Association, to help agri-MSMEs become “madigiskarteng” agripreneur with proper knowledge and skills in food processing and the use of appropriate digital tools and technologies in selling their products online. The availability and access to processing facilities will enable the farmers to minimize vegetable wastes generated and optimize their income.

Aboitiz Foundation also partnered with Smart Communication, Inc. to provide the 19 partner-beneficiaries with more than 6000 members a ‘Digiskarte Package’ which includes a starter kit from Smart composed of sim cards, LTE handsets, retailer kit with load wallet, customized store signage, ICT training, and other freebies supplemented by a mentoring program.

Apart from providing additional revenue streams, the program aims to connect the beneficiaries to their market through the use of mobile phones and other technological tools to be able to transact business online and make the digital marketplace accessible to them.

UnionBank issues the Philippines’ first-ever Digital Peso Bonds

One of the largest banks in the Philippines and a digital trailblazer in Asia Pacific, UnionBank will continue to unleash the synergies and value from its various digital investments in the past years and leap forward towards it goal of becoming a Great Retail Bank in its pursuit of enduring greatness.

In line with their vision to transform traditional banking services through digital innovations, Union Bank of the Philippines (UBP) is the first universal bank to successfully issue the country’s  first-ever offering of Digital Peso Bonds. With an aggregate issue size of ₱11 billion, and backed by Distributed Ledger/Blockchain technology, the robust participation from retail and institutional investors resulted in an order book eleven times its initial minimum offer size of ₱1 billion.

The success of this issuance opens the door to a future filled with more digitally-based asset offerings. “This pioneering issuance serves as a building block in UnionBank’s journey to embrace digitization and positive disruption in the industry.” says Jose Emmanuel Hilado, Treasurer and Head of Global Markets for UBP. “I am confident that this will be recognized globally as a game changing digital initiative in the field of finance.” The digital bonds were issued through the digital registry and digital depository of the Philippine Depository & Trust Corp. (PDTC) utilizing infrastructure powered by #STACS blockchain, and a new digital infrastructure made interoperable with the traditional trading-to-clearing infrastructure of the Phil. Dealing & Exchange Corp. (PDEx) Fixed Income Market.

Widely known to have been trailblazing many firsts in the country since it began operations 40 years ago, UnionBank has always been among the first to embrace technological innovations to empower its customers into the future of banking. The Bank’s 40-year journey began with a simple vision: to become one of the top three universal banks in the country with respect to market capitalization, profits, and customer coverage.

UnionBank began building the foundations for its operations in 1981, and in just a year became a commercial bank on January 19, 1982. A decade after, in 1992, the Bank debuted at the Manila and Makati Stock Exchanges in June of that year, and was granted a Universal Banking License the month after.

Forty years later, UnionBank has gone full throttle on its digital journey and continues to achieve numerous industry-firsts, gaining the reputation as the country’s most innovative bank even before the Filipino mass adoption of the internet.

UnionBank was recognized by The Asset as “Digital Bank of the Year”, holding the distinction of being the first and only Philippine bank to receive the award five years in a row, and as a result, successfully established itself as a digital dynasty in the industry.

The bank’s relentless pursuit of leading-edge digitalization to enhance the experience of retail and commercial customers is streets ahead of the competition according to The Asset magazine. International Banker magazine said that the bank is “already an unequivocal digital trailblazer in both the Philippines and Southeast Asia.” 

Fueled by its commitment to ‘Tech Up, Pilipinas’ and enable inclusive prosperity, UnionBank stays true to its promise that no one—not its customers, not its colleagues, not its countrymen, gets left behind.

AboitizPower advances RE growth with second solar venture in Pangasinan

AboitizPower Corp. is accelerating its 94-megawatt (MW) solar power project in Cayanga, Bugallon in Pangasinan. Once completed, the Cayanga solar power plant is expected to produce about 147 million kWh of clean energy annually or equivalent to the yearly power consumption of 60,000 average Filipino homes.

With sights set on renewable energy and sustainable power generation, Aboitiz Power Corp (AboitizPower) has entered into another Engineering, Procurement and Construction (EPC) Agreement for its new 159-MWp Laoag and Laoag 2 solar power projects in Barangay Loang, Aguilar, Pangasinan. The contracts were coursed through the company’s subsidiary, Aboitiz Renewables Inc., and awarded to SUMEC Complete Equipment and Engineering Co., Ltd. and Hansei Corporation for DC and AC. This endeavor will be AboitizPower’s second solar project in Pangasinan, with the Cayanga Solar Power Plant being the first.

The Laoag and Laoag 2 projects are targeted to commence commercial operations by June 2023, and are expected to generate approximately 261 GWh of clean energy per year. “This project is proof that AboitizPower is well underway in terms of our renewable energy growth ambitions,” said AboitizPower President and CEO Emmanuel V. Rubio, further adding, “We look forward to its completion so we can continue to serve our country’s growing needs with zero-emissions renewable energy and contribute to achieving a sustainable energy transition.”

Powering a better future through renewable energy, Aboitiz Power Corporation was incorporated on February 13, 1998 and serves as the Aboitiz Group’s holding company for its investments in power generation and distribution. The company is the Philippines’ largest provider of “Cleanergy”, the company’s brand for its renewable energy, and currently holds these investments through its wholly-owned subsidiary Aboitiz Renewables, Inc. AboitizPower’s renewable energy portfolio includes hydroelectric, geothermal, and solar power generation projects.

AboitizPower also owns nine distribution utilities, collectively supplying electricity to over 20 cities and municipalities, including five economic zones located across Luzon, Visayas, and Mindanao. Within the next decade, the company seeks to expand its Cleanergy efforts threefold, as the Philippine government continues to promote the use of renewable energy across the country.