Fernando Zobel on cybersecurity, logistics, the Razon Group, and the economy

Some days are just crazy busy for tycoon Fernando Zobel de Ayala, more so now since he took over the helm of Ayala Corp. as CEO in April last year.

After all, he took over the leadership of the country’s oldest conglomerate at a very challenging time, with the country and the rest of the world dealing with a debilitating pandemic.

But COVID-19 didn’t stop Ayala from expanding and there are even bigger plans for 2022 and in the years to come.

Here’s what Fernando Zobel de Ayala or FZA shared with me during a recent chat regarding Ayala’s growth plans for its different businesses.

Record capex

Ayala is spending a record $5.8 billion this year, he says with pride.

“We will continue to do our part to help in the country’s economic recovery. We will be spending a record amount of capex of $5.8 billion this year across the group.”

The amount is 40 percent higher than last year’s spending, he says, noting that bulk or 60 percent will go to property giant Ayala Land Inc. ‘s (ALI) residential developments as it continues to see growth in sprawling estates, horizontal developments and commercial properties.

On the other hand, ALI expects hotels and malls to take longer to recover, FZA says. ALI is headed by its president and CEO Bobby Dy.

Aggressive expansion for Globe Telecom

As for Ayala’s telco giant Globe Telecom headed by Ernest Cu, FZA says more households will experience fiber internet and will see even better services with the construction of new cell sites.

“Globe has allocated a significant portion of its capex toward its aggressive network expansion and modernization program, covering the construction of new cell sites, upgrading of existing ones, and a massive rollout of fiber internet to households,” FZA says.

Not to forget, he adds, is Globe’s investments in adjacent businesses, including telemedicine, data analytics, and the further expansion of GCash’s digital finance services.

Digitalization

In all, digitalization continues to be a priority area for the Ayala Group, he says.

Banking arm BPI, under the leadership of TG Limcaoco, has been spending eight to 10 percent of its revenues on digital initiatives.

This, FZA says, highlights BPI’s commitment to improve the experience of its clients.

“With new digital platforms catering to different segments of the market, we are seeing a rapid increase in the number of users and the size of the transactions,” he says.

Cybersecurity

With so many hacking incidents in the country, I also asked him about Ayala’s cybersecurity measures.

Cybersecurity, he says, is top of mind across all Ayala companies and not just for BPI and Globe.

“We regularly revisit our security measures to ensure that we can prevent and respond to constantly evolving digital threats,” FZA says.

He notes, however, that beyond technology interventions, cybersecurity also involves informing and educating customers to be vigilant on the risks and to exercise good security practices.

In fact, I read that it was GCash that alerted its users about a gang of fraudsters.

18,000 MW of renewable energy

On the power business, FZA says he is excited about renewables.

Ayala’s ACEN, led by its president Eric Francia, has an expansion pipeline of 18,000 MW of renewable energy capacity in the country and in Australia, Vietnam, and India.

“We are excited about the growth prospects in the renewables sector,” FZA says.

Infrastructure

I then asked about the highly regulated infrastructure industry. Would Ayala still participate in more traditional infra projects such as roads and expressways? Or perhaps, airports?

“Our focus is to grow the logistics platform to expand our capabilities in this space. The acquisition of AIR21 will allow us to expand our presence in the sector in a more meaningful way, given the capabilities built into this acquisition. It will also allow us to cater to specific high growth industry verticals and tap into synergies across the Ayala group companies,” FZA explains.

Manila Water

For Manila Water, I wondered if the Ayala Group will completely sell its remaining economic interest in the water company to tycoon Enrique Razon.

FZA says Ayala has an excellent working relationship with the Razon Group and is grateful to have them as partners in Manila Water.

“Manila Water has ambitious growth plans and we remain fully supportive of the direction that the company is taking,” he says.

He is, likewise, delighted with the increase in Manila Water’s share price and he has reasons to be. Manila Water is now at P24.50 per share from P13 per share when Razon bought into the company in February 2020.

With all these plans, FZA has his plate full.

He is sure to have busier days. Does he still have time for the lighter things in life such as spending time with his family, enjoying art, his dogs, or going out on long rides around the country on his big bike?

In any case, he says he is fortunate to be working with an “exceptional group of executives and team members across Ayala who have been able to pivot their businesses and innovate in the face of massive disruption.”

“We are delighted that our companies have been able to anticipate and prepare for many of these changes while being nimble enough to learn and adapt as we face the challenges of the pandemic,” he says.

Props to FZA and the rest of the Ayala team. Indeed, it’s no joke navigating the country’s oldest conglomerate in these difficult times.

Iris Gonzales’ email address is [email protected]. Follow her on Twitter @eyesgonzales. Column archives at eyesgonzales.com