Firm targets areas not served by MCWD

A Cebu-based private water distribution company plans to serve more areas in Cebu, which are not served by the Metro Cebu Water District (MCWD).

Gabino M. Abejo Jr., president and chief executive officer of Abejo Waters Corp., said there’s still a big demand in areas not served by MCWD here in Cebu.

“MCWD is only serving 60 percent of Cebu and we need supply or source development which is also a priority for us aside from distribution,” Abejo said.

He however didn’t elaborate on what specific areas they plan to serve.

“All our projects now are ground water and our expansions are into desalination of salt water, brackish water and ground water.”

At present Abejo Waters Corp. is supplying MCWD 17,000 cubic meters of water daily and is currently working on two systems with a capacity of 2,000 cubic meters and 3,000 cubic meters, respectively.

In 2009, their sales reached P51.089 million with a net profit of P5.490 million and an asset of P143.965 million.

“We hope to have at least 10 percent growth but our projections are telling us that we’re likely to end with 300 percent growth this year until the first quarter of 2012,” he said.

Gabino said that the firm also planned to expand its operations to the Visayas and Mindanao region.

He said they were aiming to increase the firm’s bulk water supply capacity from 17,000 cubic meters to 22,000 cubic meters by the end of the year.

The firm also expects to earn a gross revenue of P380 million by the end of the year.

The firm’s targets are based on the 17 water contracts that were finalized and were still under negotiations.

He said seven of these service contracts, which include those with local government units, were on the final stages while 10 others were still being negotiated.

He said the 10 service contracts still being negotiated will require a capacity of 35,000 cubic meters and an investment of at least P1.5 billion,
“About 60 percent of that are distribution contracts with one contract amounting to P800 million for a municipality outside of Cebu. About 40 percent of that funding will be internally generated,” Abejo said.

Within two years period, Abejo said that they are also targeting to get listed under IPO (Initial Public Offering) of the Philippine Stock Market to raise enough funds that they will need for more investments in the future.

“Initially we are hoping to raise P200 million but that’s based on our operations now and assuming that we don’t have any growth which is very unlikely to happen with more contracts coming our way. IPO is one way that we think we could use to equip ourselves and compete better especially that we are expecting investments in water to start pouring in soon,” Abejo said.