AYALA CORP. is investing $80 million more in its outsourcing business this year, as it takes advantage of foreign companies outsourcing business functions as a way to cut costs.
Ayala Corp. President Fernando Zobel de Ayala (right) expects
local outsourcing to grow into a $13-billion industry
in the next five years. Unit Affinity Express,
a provider of outsourced graphic and design services,
was launched yesterday. — Jonathan L. Cellona
In a briefing yesterday, Ayala officials said the company had invested more than $120 million in the local business process outsourcing (BPO) industry through subsidiary LiveIt Solutions, Inc., and is eyeing more acquisitions before the year ends.
"We have made a commitment to the [BPO] sector," said Alfredo I. Ayala, president of LiveIt, the holding firm of the conglomerate’s outsourcing business. He said the industry is expected to grow substantially despite a US-led global economic slowdown, as "companies need to reduce their costs during hard times."
Officials of the country’s oldest and biggest conglomerate said the company still did not know where it would get the funds for the additional investments.
Ayala Corp. President and Chief Executive Officer Fernando Zobel de Ayala said the company expects local outsourcing to grow into a $13-billion industry in the next five years, from $7 billion by yearend. He said the company is "encouraged about the prospects" of offshoring and outsourcing in the Philippines due to the country’s largely English language-educated talent pool, and Filipinos’ cultural affinity to the United States, the industry’s largest client.
The company has a 22% stake in one of the country’s biggest BPO firm, eTelecare Global Solutions, Inc., and a majority stake in knowledge process outsourcing company Integreon Management Solutions, Inc.
Yesterday, LiveIt launched unit Affinity Express, Inc., more than a year after the latter started operating, as part of the company’s efforts to move into more high-end services. Mr. Zobel de Ayala noted that while the company would maintain its investments in the voice service segment of outsourcing, the company was also looking for other areas of expansion.
Affinity Express, which is engaged in graphic arts production for both print and online media, employs about 250 workers, but this number is expected to rise to 300 before the year ends. LiveIt expects workers to grow to 500 next year as Affinity expands its operations. Affinity also has operations in India where it employs 700 people.
"A presence in Manila has long been part of our strategic plan," Kenneth W. Swanson, chief executive of US-based Affinity Express, said in a statement, citing the country’s track record for reliability. He also said resource availability is greater in the Philippines compared with other outsourcing destinations, citing the country’s expertise in the BPO industry.
The company’s clients include more than 140 newspapers and publications across the US. He said companies in the States can cut costs by at least 40% for the services they outsource to Affinity.
Jose Ricardo M. Moran, president of Affinity Express Philippines, Inc., said the company expects 40% growth this year, as demand for services abroad grows. He said the company plans to expand soon as its Ortigas site nears capacity.
Mr. Zobel de Ayala said their BPO business is one of the best performers. While declining to provide details, he said he expects growth to continue as Ayala looks for more opportunities. The local BPO industry is expected to employ half-a-million people by yearend from around 300,000 last year.
