Conglomerate Ayala Corp. is in talks with four automotive companies for a possible joint venture in car manufacturing.
Arthur Tan, president of Ayala Industrials, said the plan to venture into car manufacturing was part of the conglomerate’s Asean strategy.
“In an ideal setting, we want the Philippines to be the site for car manufacturing. But we are not precluding ourselves because we can also be an Asean partner [of these foreign car manufacturers],” Tan said.
Tan did not identify the car manufacturers Ayala Corp. was seeking as partners, but hinted they might not be Japanese companies. Ayala Corp. has equity investments in Honda Cars Philippines Inc.
“We have to be very strategic in whom we should talk to and how we should take the deal. To bang our heads with the Japanese—Toyota, Mitsubishi, Honda which have already invested billions in full-scale production plants in Thailand, whom we have 100 percent FTA [free trade agreement] with—why?” Tan said.
Ayala Corp. is diversifying into other businesses, including automotive, energy and infrastructure. The conglomerate said net income climbed 32 percent in the first half to P13.8 billion as its banking, real estate, power and automotive businesses delivered robust results.
Equity earnings from business units reached P16.4 billion in the first semester, or 24 percent higher than a year ago, boosted by strong contributions from Bank of the Philippine Islands which jumped 32 percent and property unit Ayala Land Inc. which expanded 16 percent.
Ayala Corp.’s unlisted businesses also registered solid performance in the first semester led by AC Energy and Ayala Automotive, which both expanded threefold.
“Most of our business units recorded an overall strong performance in the first half of the year. Among our new businesses, our power unit is starting to contribute significantly to our bottomline,” Ayala Corp. president and chief operating officer Fernando Zobel de Ayala said.
“We continue to strengthen our portfolio by entering new industries or reinventing our existing businesses. For instance, we are developing an automotive and manufacturing portfolio in order to maximize synergies in the Ayala group and take advantage of the exciting opportunities in this space,” Zobel said.
The conglomerate’s balance sheet remained healthy as cash at the parent level hit P31.2 billion as of end June, with debt at P81.4 billion.
Ayala raised P10 billion in July from the issuance of 3.92 percent fixed-rate bonds due 2023.
The issuance is the first tranche of its P20-billion fixed rate bonds program. The bond was rated “PRS Aaa” by Philippine Ratings Services Corp. and was listed in the Philippine Dealing Exchange.