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Manila Water acquires Laguna water supplier

July 21, 2009 3:33pm

MANILA, Philippines - Manila Water Co. Inc. (MWCI) has acquired a company that supplies water in Laguna, betting the acquisition will help it serve more customers in one of the Philippines’ highly-developed provinces.

The Ayala-led water distributor now owns 100 percent of AAA Water Corp. (AWC), which holds 70 percent of Laguna AAA Water Corp. (LAWC), a joint venture between AWC and the Laguna provincial government, the company told the Philippine Stock Exchange (PSE).

Manila Water paid “around P180 million" for the acquisition, Rene Almendras, Manila Water president, told GMANews.TV.

In 2007, LAWC secured a 25-year concession to supply water to the city of Sta. Rosa and the municipalities of Biñan and Cabuyao, which are also locations of multinational companies such as Nestle, Coca-Cola, and Ford Motors.

A number of residential and commercial projects are also being undertaken by real estate giants such as Ayala Land, Vista Land and Eton Properties in the areas.

“The potential for growth is extremely high as the area is currently being underserved," Manila Water said. “At the moment, only 120,000 people, out of a total 600,000 population, are currently being served by the existing water network."

Sales growth will be driven by “new developments in the area…not counting the inflow of new residents to ongoing and proposed residential and commercial developments," the company said, adding that the area’s population is expected to grow to as much as 1 million people over the next 15 years.

Along with the company's takeover of water and wastewater operations in Boracay Island, the latest acquisition will help it expand services to other cities in Laguna, currently one of the country’s most developed provinces.

Manila Water, which services 5.6 million people in the east zone of Metro Manila, has started its operations in 1997. It has reduced its water losses from 63 percent to less than 20 percent presently.

On Tuesday, Manila Water's shares closed flat at P15 each. - GMANews.TV