2007 ANNUAL REPORT Power Corporation - Aboitiz Equity Ventures
2007 ANNUAL REPORT Power Corporation - Aboitiz Equity Ventures 2007 ANNUAL REPORT Power Corporation - Aboitiz Equity Ventures
ABOITIZ POWER ENERZONES Powering industrial estates AP’s acquisition of MEZ, BEZ and the remaining stake in SEZ was a strategic move to consolidate the group’s business of distributing power in industrial estates. In 2007, Aboitiz Power Corporation (AP) fully acquired the distribution utilities of two special economic zones in Cebu and bought out the remaining stake in an ecozone utility already majority-owned by the company. AP’s acquisition of Mactan EnerZone (MEZ), Balamban EnerZone (BEZ), and the additional stake in Subic EnerZone (SEZ) was a strategic move to consolidate the group’s business of distributing power in industrial estates and building a niche business focused on this area. The company looks at these units as markets for its power in the future. The Hanjin shipyard at the Redondo Peninsula in Subic 40 • ABOITIZ POWER CORPORATION ANNUAL REPORT 2007
The three utilities aim to provide customers with reliable and reasonably-priced electricity to help power up industrial growth in the country. MEZ distributes power at the Mactan Export Processing Zone II (MEPZ II) in Mactan Island, Cebu. MEPZ II currently has 75 locators, many of which are semiconductor firms and electronics manufacturers. BEZ is the electricity provider in the Western Cebu Industrial Park (WCIP) in Balamban, Cebu. Balamban is home to the shipbuilding facilities of Tsuneishi Heavy Industries (Cebu) and FBMA Marine, as well as the modular fabrication facility of Metaphil International. Demand for power in the WCIP, which currently has 10 locators, is expected to grow substantially in 2008 due to the expansion of Tsuneishi’s shipbuilding facilities and the completion of the new plants of Air Liquide and SIG. The West Cebu Industrial Park in Balamban, Cebu where the Tsuneishi shipyard is located. SEZ has been managing the power distribution system of the Subic Bay Freeport Zone since 2003 under a Distribution Management Services Agreement (DMSA) with the Subic Bay Metropolitan Authority (SBMA). The DMSA covers a period of 25 years, with SEZ paying SBMA 40 million annually for the lease of its power facilities and other properties. In just four years, SEZ has dropped the systems loss from 14% to 4.0% allowing it to lower its power rates. The distribution charge was reduced from 1.00 per kilowatt-hour (kwhr) to 0.59/kwhr upon turnover; the reduction of the system losses resulted to further savings to the customer amounting to approximately 0.48 per kwhr. Power demand in the freeport zone is expected to grow rapidly in the coming years with the operations of its new container terminal and the Hanjin Heavy Industries’ multi-billion shipyard, as well as the opening of the Subic-Clark-Tarlac Expressway. As of February 2008, SEZ had 2576 customers. In 2007, SEZ signed a Memorandum of Agreement to provide power to Hanjin’s shipyard located at the Redondo Peninsula. With the energization of the peninsula, more investors are expected to locate in the area. To help serve this surge in power demand and in anticipation of the influx of more investments into Subic in the next few years, AP together with Taiwan Cogeneration Corporation, is developing a 300-MW coal plant near the Hanjin shipyard. The plant is scheduled for completion in 2011. ABOITIZ POWER CORPORATION ANNUAL REPORT 2007 • 41
- Page 1 and 2: Power Corporation Powering New Fron
- Page 3 and 4: P o w e r i n g New Frontiers ABOIT
- Page 5 and 6: FINANCIAL SUMMARY For the Year (In
- Page 7 and 8: R E P O R T T O O U R S T O C K H O
- Page 9 and 10: h Powering New Frontiers With deman
- Page 11 and 12: Results of Operations POWER D I S T
- Page 13 and 14: R E S U L T S O F O P E R A T I O N
- Page 15 and 16: A SFELAPCO crew does live line work
- Page 17 and 18: Results of Operations POWER G E N E
- Page 19 and 20: POWER G E N E R A T I O N Hedcor si
- Page 21 and 22: STEAG State Power Inc. (SPI) contri
- Page 23 and 24: We expect our distribution companie
- Page 25 and 26: The strong and stable financial per
- Page 27 and 28: DIRECTORS SPECIAL AND REGULAR BOARD
- Page 29 and 30: Director and Senior Executive Compe
- Page 31 and 32: The Office of the Chief Compliance
- Page 33 and 34: Employee Relations In AP, people ar
- Page 35 and 36: P o w e r i n g New Frontiers F E A
- Page 37 and 38: The rest of its capacity is traded
- Page 39 and 40: The annual energy requirement will
- Page 41: Gone are the long queues at VECO’
- Page 45 and 46: CPPC, meanwhile, is situated on a 1
- Page 47 and 48: and reliable supply of electricity.
- Page 49 and 50: The fulfillment of sharing the frui
- Page 51 and 52: Board of Directors Jon Ramon M. Abo
- Page 53: Corporate Officers Benjamin A. Cari
ABOITIZ POWER ENERZONES<br />
<strong>Power</strong>ing industrial estates<br />
AP’s acquisition<br />
of MEZ, BEZ and<br />
the remaining<br />
stake in SEZ was<br />
a strategic move<br />
to consolidate the<br />
group’s business<br />
of distributing<br />
power in industrial<br />
estates.<br />
In <strong>2007</strong>, <strong>Aboitiz</strong> <strong>Power</strong> <strong>Corporation</strong> (AP) fully acquired the<br />
distribution utilities of two special economic zones in Cebu<br />
and bought out the remaining stake in an ecozone utility<br />
already majority-owned by the company.<br />
AP’s acquisition of Mactan EnerZone (MEZ), Balamban<br />
EnerZone (BEZ), and the additional stake in Subic EnerZone<br />
(SEZ) was a strategic move to consolidate the group’s<br />
business of distributing power in industrial estates and<br />
building a niche business focused on this area. The company<br />
looks at these units as markets for its power in the future.<br />
The Hanjin shipyard at the Redondo Peninsula in Subic<br />
40 • ABOITIZ POWER CORPORATION <strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2007</strong>
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