Wednesday, September 22, 2010

Wealth in and of water

Wealth in and of water
Business World Online
September 22, 2010

Gabino M. Abejo, Jr.
Abejo Builders Corp.

Cebu City is the hub of trade, industry, tourism and education in the Visayas. Steeped in history and rich in local traditions, it has been consistently rated among the top island destinations in Asia. However, it is also a known fact that Metro Cebu has had a water supply problem for some time now because of deforestation and seawater seeping into its underground water supply. That water is a basic human necessity cannot be ignored in this populous area and 27-year-old Gabino M. Abejo, Jr. has risen to this challenge. He has channeled his drive, energy and boundless enthusiasm into projects to provide clean, safe water to barangays in Talisay and Consolacion, Cebu.

Leveraging on the resources and experience of Abejo Builders Corp., Mr. Abejo guided his family’s business into diversifying from construction into bulk water production. The company was created in 1999 as a family-owned construction business based in Mandaue City. At that time, Mr. Abejo’s brother Gerry headed the company that was involved in small piping projects with the Metro Cebu Water District (MCWD). Seeing an opportunity to supply potable water by engineering their own water delivery system, the Abejo family began shifting their focus to water production. The company partnered with a Manila-based water distribution consultant to learn more about the industry.

A big break occurred in 2003 when the company won a bid to supply a minimum of 4,000 cubic meters (cu. m.) of potable water to the MCWD for distribution in Talisay City. As this was the company’s first venture into the business, it took 12 months to build the system. In 2005, Gerry stepped down, and his younger brother, Gabino, took over as vice-president of the business.

Mr. Abejo has had some experience in the water industry. After graduating from Northwood University in Florida in 2004, he came home and set up a water refilling station in Mactan, where water is mostly brackish. The success of his business led to two more branches within the next nine months.

As head of the company, Mr. Abejo saw the huge potential of expanding into the bulk water system. He decided to restructure the company with water supply as its primary service and construction as a secondary service. Under his leadership, the company made significant investments in their water system model to ensure cost efficiency. This allowed the company to offer reasonable and competitive prices to both customers and water districts.

From an initial supply of 4,000 cu. m. daily, the Talisay bulk water system increased production to an average of 5,600 cu. m. daily by 2007. A year later, the company won another MWCD contract to supply a minimum of 7,000 cu. m. daily of potable water to the town of Consolacion. Despite being a fledgling in the water business, they were able to supply the MCWD with up to 15,000 cu. m. a day.

Moreover, lessons from their previous project enabled Abejo Builders to complete the new system in just six months or half the time it took to complete their first water system. The six-month turnaround is now a standard guarantee in their contracts.

With an eye for opportunity, Mr. Abejo also envisioned a way to help the communities where their bulk water supply system was located. Noting that not all houses in the barangays had ready access to the water supplied by the MCWD, Abejo Builders provided communal faucets in as many as 12 to 15 areas in the barangay. Water is available 24 hours a day and is free of charge. This was the start of his "Barangayan Water Project."

However, the water needs of the community proved to be too great, prompting Mr. Abejo to expand the project into a level three water supply system. This meant installing water meters in all houses and providing water directly to the barangay residents, at no cost to the local government.

Mr. Abejo also pegged the price per cubic meter at P1 lower than the MCWD’s to further subsidize the expenses in the community. The connection fee of P4,000 is also charged over a 12-month installment plan.

Mr. Abejo sees this as building a sense of social responsibility in his company. He hopes to replicate this system in other barangays wherever the company’s bulk water supply system is located.

Inspired by his company’s rapid growth and success, Mr. Abejo aggressively pushes on, aiming to further increase the volume he supplies to the MCWD by an additional 25,000 cu. m.

This year, he has already won five new supply contracts, two systems of which they have started to build. Apart from servicing the MCWD, Mr. Abejo is also in talks with two private companies to supply them with 4,000 cu. m. a day using surface water technology and brackish water desalination technology.

To undertake new and bigger projects, Mr. Abejo relies on his employees to deliver. To him, they are the company’s strongest assets, and he makes it a point to meet with his management and staff regularly to discuss problems and opportunities.

Every six months the company also organizes team building activities for the staff. He believes that employees continually become more efficient and innovative due to their culture of mutual trust, respect and teaming. He considers this to be the key to Abejo Builders’ growing competitiveness.

Confident of his team and optimistic about the opportunities in the water sector, Mr. Abejo is keen about the company’s expansion. There are plans to list on the Philippine Stock Exchange, acquire other bulk water supplier companies with existing contracts, and to bid on projects for other water districts outside Cebu, such as in Southern Luzon and other parts in the Visayas and Mindanao.

With youthful exuberance, Mr. Abejo is charting a course that he hopes will help improve the lives of his fellow Cebuanos and other Filipinos.

"It truly motivates me when I see poor people in the barangays living better and healthier lives because of the 24-hour potable water our company supplies directly to their houses. The never-ending show of gratitude whenever I visit these barangays inspires me to work harder and to duplicate this project in areas not served by the local water district," he says.


The Entrepreneur Of The Year Philippines 2010 is sponsored by SAP Philippines. The official airline is KLM Royal Dutch Airlines, operating on behalf of the Air-France KLM Group in the Philippines. Media sponsors are BusinessWorld and the ABS-CBN News Channel. The winners of the Entrepreneur Of The Year Philippines 2010 will be announced on October 12, 2010 at an awards banquet at the Makati Shangri-La Hotel. The Entrepreneur Of The Year Philippines will represent the country in the World Entrepreneur Of The Year 2010 in Monte Carlo, Monaco in June 2011. The Entrepreneur Of The Year is produced globally by Ernst & Young.