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Foreign BPOs wary of locating at Ayala’s site in Davao

Vol. XXII, No. 43 [ BusinessWorld Online ]
Wednesday, September 24, 2008 | MANILA, PHILIPPINES

DAVAO CITY — The Ayala group is having difficulty convincing US companies to locate their operations at its planned business process outsourcing (BPO) building here given travel advisories issued by foreign embassies.

Marivic E. Añonuevo, senior vice-president and group head of the Ayala Malls Group, said the American principals of BPO locators are wary of even paying them a visit because of the travel warnings on Mindanao. "There is still the challenge of convincing people to come and invest with us," she told BusinessWorld.

The Ayala group is building a P2.3-billion BPO complex that will have a floor area of 20,000 square meters. The BPO building will have five levels with 10,000 square meters allocated for call center operations.

Construction of the building will start next year and will be completed by 2012. The centerpiece of the project, Ayala Center Davao, is expected to open in two years. "People have come and see with their own eyes how peaceful it is here. There are also testimonials from those who have located here," she added.

Ms. Añonuevo cited studies claiming that Davao City has a substantive A, B and C markets that make up a fifth of its population, higher than Cebu’s 16%.

In terms of talent pool, the Business Process Association of the Philippines has recognized Davao City’s potential for second-tier cities, ranking only next to Cebu. Ms. Añonuevo said they are unfazed by the Gokongweis’ plan to set up a Robinsons shopping mall and the Sys’ similar intent to build an SM mall near the Ayala Center here. A market research and competitive studies they conducted, she said, showed a gap in the supply and demand in the Davao commercial sector.

In the late 1980s, the Ayala group tried to buy the Lanang Golf Course owned by the Dakudao family, some four kilometers from its Abreeza project. About 10 hectares of the golf course were reportedly acquired two months ago by taipan Henry Sy for the SM Davao North project, construction of which has not been announced.

"We also like to bring in our established local and international merchants in Manila, [so they can] invest in Davao," she said. The Ayala project is expected to create 5,000 direct jobs, while the BPOs will generate 3,000 more jobs. During the construction phase, 3,000 local workers are expected to be hired. — Joel V. Escovilla


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