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Children and youth in under-served local communities can now hone their skills and talents through the use of information technology.

Ayala Foundation, Inc. (AFI) and Intel Corporation recently launched the country’s first Computer Clubhouse at Mater Dolorosa Parish in East Rembo, Makati. AFI vice-chairman Jaime Augusto Zobel de Ayala II, AFI president Victoria P. Garchitorena, and Intel Philippines general manager Robin Martin joined clubhouse members and volunteers to celebrate the event.

The clubhouse is an after-school learning facility where community youth can explore their ideas and talents and build self-confidence through technology. It is part of a global network of Computer Clubhouses established in 1993 by the Museum of Science, Boston and the Massachusetts Institute of Technology Media Lab.

Nearly 300 children have joined the Ayala Foundation Intel Computer Clubhouse at Mater Dolorosa Parish since its soft opening early this year. At the grand launch last May 17, clubhouse members proudly presented their computer-generated artworks to their parents and guests. Clubhouse coordinator Maui Salang also announced that two 13-year-old clubhouse members, Maria Roseta Mayorca and Augusto Guevara Lorca, had been chosen to participate in the Teen Summit of the Museum of Science, Boston in July.

Zobel was visibly impressed with the talent shown by the clubhouse members. “I am happy to hear that this clubhouse has made life more exciting, more interesting and certainly more productive for the young people in the Mater Dolorosa Parish. I believe that these children have great potential, given the right tools and a safe, nourishing environment,” he added.

The clubhouse has 30 volunteer mentors, including employees from companies such as Globe Telecom, who show the basics of using gadgets to the children as they explore their own creativity. Even now, children as young as eight years old know how to operate digital cameras and microscopes or edit videos clips on a personal computer. Over 100 artworks created by the children are now displayed at the Computer Clubhouse.

Noted Salang, “Parents say that they feel fortunate to have the Clubhouse because their children can spend time productively here, instead of being in the streets.”

With the warm show of support from the parish and the local community, Intel and AFI have established a second Computer Clubhouse in Cavite and plan to open a third clubhouse soon. Other companies who support the program include Adobe Systems Inc., Autodesk Inc., Hewlett-Packard Company, Macromedia, the LEGO Company, and Haworth, Inc.

The Ayala Foundation Intel Computer Clubhouse is located at Mater Dolorosa Parish, J.P. Rizal Extension, East Rembo, Makati. For more information, contact Maui Salang at 881-3185.

Amidst tougher competition from regional and global competitors, Asian conglomerates will thrive if they continue to add value and remain open to change.

Jaime Augusto Zobel de Ayala II, president and CEO of Ayala Corporation, remains optimistic about opportunities for growth available to such far-thinking conglomerates. At the helm of the one of the country’s oldest and most diversified business houses, Zobel believes that a holding company continues to play a key, nurturing role in the success and transformation of its core businesses.

Zobel observes that a leading domestic player can more quickly assemble talent, ideas, business partners and capital than a foreign or new entrant who lacks the same networks. “Our great strength is our ability to pull together all the elements required to build new businesses: the business concept, strategic partners, talent, capital and disciplined implementation of world-class governance and management processes.”

Ayala Corporation has interests in real estate, banking, telecommunications, information technology, utilities, and automotive. Zobel cited several instances when Ayala Corporation’s timely interventions and use of its balance sheet were instrumental in the development of its businesses. Ayala Corporation was able to turn Globe Telecom into one of the most successful companies in the country by attracting strong strategic partners in Singapore Telecom and Deutsche Telekom and by putting a strong management team in place.

This same model of value creation also facilitated affiliate Bank of the Philippine Island’s (BPI) acquisition of Far East Bank and the entry of the Development Bank of Singapore as a partner as well as many of Ayala Land, Inc.’s (ALI) joint ventures in property development. Backed by the Ayala name, BPI and ALI were seen as partners of choice and have become leaders in their respective industries.

Creating value, building trust
The group’s success has not gone unnoticed by international investors. Ayala Corporation, ALI, and BPI now account for 37 percent of Morgan Stanley Capital International (MSCI) Philippine basket, up from a previous weighting of 12 percent. MSCI identifies companies that represent the local market and is closely monitored by global institutional investors. In the local market, the combined market capitalization of Ayala Corporation, ALI, BPI and Globe is P363 billion, comprising approximately 30 percent of total market capitalization of all listed shares.

A recent study by Merrill Lynch suggests that the holding company’s value is greater than the sum of its parts.

Ayala Corporation has also consistently ranked high in surveys of leading regional publications. Institutional investors and equity analysts surveyed by FinanceAsia recently named Ayala Corporation as the best company in the Philippines and the company most committed to corporate governance. This supported the latest survey of Far Eastern Economic Review which ranked Ayala highest for long-term vision and second in business leadership in the Philippines. BPI, Globe, and ALI also figured prominently in the surveys.

Zobel says that these developments indicate a vote of confidence from the international market: “These are clear indicators that we have achieved a significant amount of trust and respect among the global investor community which has been critical to our long-term success.”

New strategies
However, Zobel believes that Ayala Corporation must be ready to respond to new challenges posed by globalization if the conglomerate is to continue to thrive in the increasingly competitive regional and global market. Early this year, the company announced a new corporate direction to actively manage its existing and future businesses. This new strategy is being driven by a new division called AC Capital, which will take over responsibility for all Ayala businesses except BPI, Globe, ALI and Ayala International. AC Capital will take charge of evaluating and managing the Ayala portfolio by bringing in partners and building regional alliances.

The company’s new strategy is supported by an internal reorganization that will result in a significantly leaner but more sharply-focused workforce. Ayala Corporation also intends to eliminate duplication of activities by its subsidiaries and let go of businesses where it is no longer deemed as the natural owner, or where its performance criteria are not met. Zobel cited the sale of Pure Foods as a good example of this new philosophy.

Corporate citizenship
As part of its corporate restructuring, Ayala Corporation is committing itself even more to the ideals of good corporate governance. It has already adopted accounting changes mandated by the Philippine Accounting Standard Council disallowing the deferral of foreign exchange losses by 2005. While Ayala Corporation’s early adoption of the changes resulted in lower retained earnings in 2001, it has made clear its desire to maintain high level of transparency in its accounts. The move is also in line with the company’s ongoing debt reduction program to improve the health and stability of the company’s balance sheet and cash flows in the long-term.

Meanwhile, the company has made social and national development initiatives part of its franchise. These projects are managed by Ayala Foundation, Inc. and include youth and community development, arts and culture, education, and environmental conservation. The foundation is constantly on the lookout for innovative projects that will create a lasting impact on Philippine society. This stems from the belief that to be truly successful, businesses must exercise good corporate citizenship.

Concludes Zobel: “Our aspiration is to build an enterprise that will truly transcend all traditional notions of the Asian conglomerate. Our core values, trust, respect and commitment to nation building, remain unchanged, but the way we manage our businesses will.”

Integrated Microelectronics, Inc. (IMI) today announced a new partnership between subsidiary Eazix, Inc. and Sharp Electronics (Singapore) Pte. Ltd. that could potentially catapult locally designed and manufactured electronic components in the global marketplace.

Eazix, Inc., the design arm of IMI, is now a member of Dream Team, a Sharp Electronics Singapore initiative that offers one-stop shopping solutions and design services to its customers. Dream Team combines the marketing and technological expertise of Sharp and that of established design and manufacturing houses such as Eazix and IMI.

As a member of Dream Team, Eazix will provide services such as system application development and component level design by adopting Sharp’s key components such as liquid crystal displays (LCD) and flash memories as well as pre-manufacturing and value engineering. The partnership also draws on the strengths of IMI, one of the country’s leading contract manufacturers and a member of the Ayala Group of Companies.

Says Arthur Tan, president and chief operating officer of IMI: “Being a member of Sharp Electronics Singapore’s Dream Team will further enhance the value proposition of the IMI Group as a product realization company for its strategic customers. This milestone is a recognition of the creativity of the Filipino.”

Masao Shimizu, managing director of Sharp Electronics Singapore, added: “With EAZIX’s strong reputation in its product development and design services and its high-volume manufacturing and logistics expertise, I am delighted to have such a reputed partner. It is my belief that our collaboration will lead to new innovative applications in the Philippine and global market.”

Global demand

Sharp Electronics Singapore launched Dream Team last year in response to the “growing demand for integrated products that meet the network-linked lifestyle of home, office and mobile communities.” Dream Team now has 15 business partners in six continents that provide customized development services and contract manufacturing in hardware and software design. Through these partnerships, Dream Team is able to offer cost-effective and high competency technology solutions for consumer electronic devices such as personal digital assistants, LCD-related products, and smart cards.

According to Tan, IMI’s knowledge-based capabilities make it an excellent partner of Sharp’s Dream Team. “We can ensure a seamless transition from product conceptualization to process design and high-volume manufacturing,” he notes. IMI currently serves leading Japanese multinational corporations in the hard disk drive and optical disk drive industries. It has also worked with global companies in the telecommunications, industrial, automotive and other electronics segments.

Meanwhile, IMI established Eazix, Inc. to assist customers in translating their ideas and technologies into products. The design house is focused on customized product design of digital multimedia, wireless technologies such as Bluetooth and global positioning systems (GPS), and Internet devices.

On its 40th year of uplifting the quality of life of many Filipinos, Ayala Foundation honored its partners, donors, and sponsors on “Funders’ Night” on April 22 at Onstage, Greenbelt Mall. The event highlighted various social development and cultural programs as well as future plans of the foundation.

Among those who were acknowledged are Washington SyCip and the SGV Foundation which gave one of their prized Fernando Zobel paintings on permanent loan to Ayala Museum.

Ayala Foundation was established by Col. Joseph McMicking and his wife Mercedes Zobel to uplift Filipinos through education and livelihood. Today, the social development arm of Ayala Corporation continues to focus on projects that build and sustain communities, promote culture and heritage, and provide Filipinos with the means to shape their lives.

Explains Victoria Garchitorena, president of Ayala Foundation: “Ayala Foundation takes up the challenge of empowering Filipinos, especially the under-resourced, to join the country’s journey to progress. We are ready to find innovative solutions to the age-old problems of illiteracy, of homelessness, of environmental degradation, of social turmoil and discontent.”

The foundation’s flagship program for youth development, the Center of Excellence in Elementary Education (Centex) now has more than 400 students in its Tondo and Bauan, Batangas campuses. Centex provides young, bright children from poor families with quality education at par with that of the country’s best private schools. The Centex children presented a musical production called “Ala-Ala-Mat” on Funders’ Night to thank all those who have supported the school and other programs of Ayala Foundation.

Global outlook

Ayala Foundation also unveiled plans for the new Ayala Museum, which is expected to open in 2004 as part of the redeveloped Greenbelt Park. It is set to become the new symbol of art and culture in Makati. As a venue for major international exhibitions, the new Museum aims to promote Filipino artists and the Philippines in the international art arena.

Ayala Foundation is also focusing on information technology projects to help prepare young Filipinos for the global economy. Project Youth Tech provides Internet laboratories and computer training to public high schools all over the country. More than 18,000 students and 180 teachers in 36 public high schools have benefited from the project since it began in 2000. Other IT-related projects of Ayala Foundation such as the Center for Technical Training Excellence, the Intel Computer Clubhouse, and the CISCO Networking Academies give technical skills training to students and out-of-school youth. In arts and culture, the Filipinas Heritage Library (FHL) creates electronic media and online research facilities for Filipiniana materials.

According to Garchitorena, a great part of the foundation’s work is made possible with assistance from generous donors and partners. It is an active member of the League of Corporate Foundations, Association of Foundations, the Makati NGO Network, and the Asia Pacific Philanthropy Consortium.

It has now ventured into tapping Filipinos abroad who wish to help their countrymen by establishing the Ayala Foundation USA as a conduit for their funds which then enjoys tax deductibility as well as a facilitator, monitor and documentor for the projects that will be funded in the country.

Says Garchitorena: “Through our partnerships, Ayala Foundation is able to arm Filipinos with the skills they need to bridge the gap between their dreams and their lives.”

The Ayala Group of Companies recently won the prestigious International Gold Quill Award for Publication Design for its 2000 Annual Reports. Presented by the International Association of Business Communicators, which counts 13,500 members in 58 countries, the Gold Quill Award recognizes excellence and outstanding achievement in business communication.

The Ayala Group 2000 Annual Reports focused on the Ayala Group’s commitment to youth development as theme. Designed by Jimenez D’Arcy, the annual reports also highlighted the group’s New Economy thrusts using leading-edge technology and systems that provide the best products and services to its customers. The International Gold Quill Award for Publication Design “recognizes the importance of the communication project’s goals and measured results and emphasizes the creative process of project execution.”

The Ayala Group’s award is one of only two Gold Quills that were given to communication programs from the Philippines. The other program was Kontra Kalat sa Dagat submitted jointly by Petron Foundation, Inc. and the Bataan Coastal Care Foundation. It won in the category Economic, Social and Environmental Development/Third World Development. Winners of the International Gold Quill Awards will be recognized at IABC’s international conference in Chicago this June.

The IABC, a non-profit international network of business communicators, annually reviews more than a thousand entries from communication professionals all over the world. Winners are selected by a blue ribbon panel of judges made up of IABC fellows, accredited business communicators, past Gold Quill winners and other leaders in the communication profession. This year, International Gold Quill Awards will be given to roughly 100 entries representing countries that include the United States, Hong Kong, Canada, Japan, Mexico and Australia.

FinanceAsia, a regional magazine on Asian financial markets, recently named Ayala Corporation as the Best Company in the Philippines in the Asia’s Best Companies 2002 survey. Ayala Corporation won the top spot in two categories: Overall Best Company and Company Most Committed to Corporate Governance.

The survey, which will be disclosed in full in the April issue of FinanceAsia magazine, was conducted among institutional investors and equity analysts from around the globe. It covers the performance of the top companies in 10 countries in Asia. In the Philippines, Ayala Corporation led as Overall Best Company, earning 50 out of 331 votes, or 15 percent of all votes. It was followed by San Miguel Corporation, which received 36 votes, and SM Prime Holdings, with 34 votes. Other companies in the Overall Best Company category were Jollibee Foods Corporation, Globe Telecom, Bank of the Philippine Islands (BPI), Philippine Long Distance Telephone Co. (PLDT), and Ayala Land.

Ayala Group companies figured prominently in all categories. Ayala Corp. ranked first in the category Company most committed to Corporate Governance with 61 votes, followed by PLDT with 25 votes. In the same category, BPI, Globe, and Ayala Land placed third, sixth, and eighth respectively. Ayala Corp., Globe, and BPI also ranked high in Best in Investor Relations.

Ayala Corp. was ranked second best in Best Financial Management, bested by San Miguel by only one vote. Other firms which rated highly were Globe, SM Prime, PLDT, BPI, Jollibee and Ayala Land, which tied with JG Summit in eighth place. Globe Telecom’s Delfin Gonzales was named Best Chief Financial Officer. Globe Telecom’s commitment to enhancing shareholder value was also recognized as third best among the country’s top companies. It was followed closely by Jollibee, Ayala Corp. and BPI.

Ayala Corporation recently announced a new strategy aimed at delivering increased shareholder value over the medium-term. Jaime Augusto Zobel de Ayala, president and CEO of Ayala Corp., explained that the company needs to be much more active in the management of its portfolio and that it needs to focus on building new businesses more aggressively. The company is potentially looking at structurally attractive industries in the Philippines where it feels it can achieve a position of leadership, as well as some select overseas exposure.

Explained Zobel: “We need to be much more active in how we manage our portfolio. We will not just hold businesses on an ‘as is’ basis. In this fast changing world, we will need to be prepared to constantly change our strategic stake in each of our existing businesses – bring in new partners, build regional and even global alliances, merge businesses with others. We need to be more open minded about how businesses evolve, more focused on value creation, and more prepared to forfeit control where doing so is best for the business.”

Zobel said this new strategy entails the creation of a new division within Ayala Corporation. Internally known as AC Capital, the new division has taken over responsibility for all domestic non-listed subsidiaries and will manage these businesses as a separate portfolio. AC Capital will be charged with finding new and creative ways for Ayala Corp. to create more value from each of these businesses and will also be the vehicle which will drive its new business building efforts.

Mr. Jaime Augusto Zobel de Ayala II, President and CEO of Ayala Corporation, today announced that Ayala will pursue a new strategy aimed at delivering increased shareholder value over the medium-term. Speaking before an audience of foreign and local institutional investors, Zobel noted that the company needs to be much more active in the management of its portfolio and that it needs to focus on building new businesses more aggressively. He also mentioned that the company has in fact already begun to reorganize itself along these lines.

Ayala began its strategy review by taking a hard look at itself and its reason for existence. “We asked ourselves some very tough questions. Why have a holding company at all? Why not just let shareholders invest directly in our listed subsidiaries?,” Zobel asked. He went on to add that the traditional model for the Asian conglomerate is under threat because of the rapid globalization of the product, capital and talent markets as they face the entry of tough regional and global competitors.

Despite these trends, Zobel is excited about the future of the company and concluded that Ayala can add value above and beyond that of its subsidiaries. As part of its strategy review, Ayala realized that its brand value, reputation as a “partner of choice,” talent bank and world-class business processes provide a unique source of competitive advantage. Citing the examples of its major subsidiaries, Zobel said that the parent company had played a critical role in their respective success stories. He noted that timely interventions and the use of Ayala Corporation’s balance sheet have allowed the company to develop Globe Telecom into one of the most successful companies in the country by attracting strong strategic partners in Singapore Telecom and Deutsche Telekom and by putting a strong management team in place. This same model of value creation, where Ayala Corporation was seen as a partner of choice, has also facilitated BPI’s acquisitions of Citytrust and Far East Bank as well as many of Ayala Land’s joint ventures in property development.

Zobel noted though that several changes were deemed necessary. In articulating his company’s new strategy, Zobel summed up what needs to happen: “We need to be much more active in how we manage our portfolio. We will not just hold businesses on an “as is” basis. In this fast changing world, we will need to be prepared to constantly change our strategic stake in each of our existing businesses‚ bring in new partners, build regional and even global alliances, merge businesses with others. We need to be more open minded about how businesses evolve, more focused on value creation, and more prepared to forfeit control where doing so is best for the business. He added that Ayala will, in the long-run, not keep businesses where it is no longer the natural owner, or where its performance criteria are not met. The recent sale of Pure Foods was cited as good example of a case where the company felt it was no longer possible gain additional synergies and benefits that could accrue to its acquirer.

Zobel went on to say that Ayala Corporation must build new businesses much more aggressively. He feels that this is how the holding company creates new value and therefore justifies its continued existence. “In the future, the main reason why investors will be interested in investing in Ayala Corporation, rather than just the subsidiaries, will be this business building capability, the faith that Ayala Corporation can build the “next Globe”, if you like. “In terms of opportunities, the company is potentially looking at structurally attractive industries in the Philippines where it feels it can achieve a position of leadership, as well as some select overseas exposure.

Finally, Zobel mentioned that Ayala Corporation can only execute this strategy properly if it has the correct structure in place. A reorganization of the holding company was therefore seen as necessary, and he confided that this process has actually begun. The key feature of this reorganization has been the creation of a new division within Ayala Corporation. Internally known as AC Capital, the new division has taken over responsibility for all domestic non-listed subsidiaries and will manage these businesses as a separate portfolio. AC Capital will be charged with finding new and creative ways for the Ayala to create more value from each of these businesses and will also be the vehicle which will drive Ayala Corporation’s new business building efforts. Another product of the reorganization is that by examining outsourcing options and reorienting its work processes, the company sees itself becoming leaner over the next few months and will be able to reduce its staffing complement considerably.

In concluding his presentation Zobel said : “We are just beginning to evolve Ayala Corporation into a more sharply focused enterprise. Our core values‚ trust, respect and commitment to nation building, remain unchanged, but the way we manage our businesses will. Our aspiration is to build an enterprise that will truly transcend all traditional notions of the Asian conglomerate.”

Ayala Corporation’s Business Process Outsourcing (BPO) investment company, LiveIt Investments Ltd., announced today that its investee company HRMall, which provides outsourced IT-enabled HR services out of Manila, has entered into a definitive agreement to acquire IQ BackOffice, LLC of Los Angeles, California, which delivers high quality, software-enabled, real-time, SAS70 Type II-certified finance and accounting BPO services to mid-sized companies in the U.S. IQ BackOffice targets companies with annual revenues of $50 million to $1 billion, but its business includes clients with revenues up to $10 billion.

The combined companies are valued at approximately $15 million. The management team of IQ BackOffice LLC, including David Schnitt, its founder and CEO, will purchase a 17.5% ownership interest in HRMall. LiveIt will own the balance of 82.5% of the company and will support the company’s strategy to accelerate its growth in its current markets in the U.S. and Asia.

HRMall will now be able to provide a complete suite of low-cost, best-in-class HR, finance and accounting services to the underserved mid-sized enterprise sector in the US and Asia, through a combination of proven technology, proprietary software and processes, deep domain expertise in multiple industries, and efficient outsourced operations that enable its clients to gain world-class back office capabilities while achieving 30% to 50% annual cost reduction. HRMall’s clients will now include over 30 US companies in the manufacturing and distribution, restaurant, hotel and hospitality, retail, professional services, property management, financial services and other industry sectors, as well as members of the Ayala group of companies (including Ayala Corporation, Ayala Land, Bank of the Philippine Islands, Globe Telecom, Manila Water and IMI). The Company will operate as HRMall in Asia and IQ BackOffice in the US, and will employ a total of over 300 employees out of its centers in Manila, Chennai, Mumbai and Los Angeles.

David Schnitt, who before starting IQ BackOffice had previously co-founded NASDAQ-listed professional services firm Resources Global Professionals, will be appointed Chief Executive Officer of HRMall, while Gilbert Santa Maria, a senior adviser to LiveIt who had previously headed eTelecare Global Solutions’ (now Stream Global Services) Philippines operations and global M&A, will be appointed chief operating officer and chief finance officer. Both will be based in Los Angeles, California. The management team of IQ BackOffice in the U.S. and India will be combining with the Manila-based HRMall leadership team.

IQ BackOffice’s founder and CEO, David Schnitt said: “I believe that HRMall’s existing HR services such as payroll are very complementary to the services we provide to our existing clients in the US, and that the Philippines greatly complements our service delivery capabilities from India and the US. Furthermore, LiveIt’s investment strategy and philosophy are very much in alignment with our operating philosophy, and its leadership team has the knowledge and experience to help us achieve our growth plans. I am very much looking forward to working with HRMall and the Ayala group of companies to create significant long-term value for our clients, associates and shareholders.”

John Philip Orbeta, chairman of HRMall, stated, “The combination with IQ BackOffice will allow us to achieve our vision of offering a full range of highly efficient, market leading back office solutions to medium-sized clients around the world. We warmly welcome the IQBackOffice team into the Ayala family.”

Fred Ayala, CEO of LiveIt, added, “This acquisition by HRMall adds a high growth, high margin and very complementary business to HRMall, with numerous cross selling and operating efficiency opportunities, and is expected to create significant value for LiveIt.”

All of the stockholders of HRMall and IQ BackOffice have approved and signed the sale and purchase documents. The transaction is subject to customary closing conditions, and is expected to close before April 30, 2011.

About HRMall
HRMall, Inc. is a BPO company focused on providing Human Resource related services – including outsourced payroll – to clients in the Asia Pacific region. Its processing and data centers are located in Manila, Philippines. It implements, deploys, hosts and processes technology-enabled HR systems, including Peoplesoft HCM, to its clients. It also provides talent management solutions, allowing human resources professionals to strengthen and personalize employee experiences, resulting in a more motivated and engaged workforce. HRMall provides outsourced services to clients across a wide variety of industry sectors including telecommunications, banking and financial services, utilities, BPO, real estate, retail, construction, property management, resort management, management services, cooperative, and high-tech manufacturing. It currently services clients with employee counts from 100 to 12,000, and has the capability for full-scale ERP implementations or pre-configured SaaS-type requirements. Additional information is available at www.HRMall.com.ph.

About IQ BackOffice
IQ BackOffice is a comprehensive Finance and Accounting BPO provider to the underserved segment of Mid-Sized Enterprises in the US with annual revenues between $50 million and $1 billion. It is headquartered in Los Angeles, CA with operations in Los Angeles, Chennai and Mumbai. Services include accounts payable, accounts receivable, payroll and complete general accounting outsourcing. IQ BackOffice leverages its proprietary software platform to enable IQ BackOffice and its clients to manage processes at world-class levels across the enterprise. IQ BackOffice is SAS70 Type II certified. It has over thirty public and private company clients across multiple industry verticals, including restaurants, manufacturing and distribution, hotels, entertainment, property management, financial services and other industries. IQ BackOffice employs over 200 people in the US and India and has an experienced management team with deep finance and accounting domain expertise. Additional information is available at www.IQBackOffice.com.