PHINMA targets Surabaya school deal in 18-24 months

PHINMA Corp. is working to acquire a school in Surabaya, East Java, Indonesia within 18 to 24 months to expand its education network, the company’s chairman said.

“On the deal in Surabaya, it was sidetracked. We were supposed to be there already, but we could not close the deal. We’re in active discussion,” PHINMA Corp. Chairman and Chief Executive Officer Ramon R. del Rosario, Jr. said on the sidelines of the Asia CEO Awards in Pasay City late Tuesday.

“Hopefully, (we can close the acquisition) within the next 18 to 24 months. It’s the same pattern as we are doing in the Philippines. We acquire ongoing schools and then we build them up and improve them,” he added.

The conglomerate’s education unit, PHINMA Education Holdings, Inc., manages Horizon Karawang in West Java, Indonesia.

Asked about other expansion plans, Mr. Del Rosario said PHINMA Education is also looking at Cambodia and Vietnam. However, he said the company is focusing first on its Indonesian expansion.

“We’re focusing on Indonesia because it’s easier to grow where you already have a footprint than to enter a brand new country,” he said.

“It will take a while. The runway for growing the enrollment in our schools is quite long. Even here in the Philippines, it takes about five years for us to hit the critical mass that allows us to grow the enrollment very quickly. That’s the pattern we’re seeing in Indonesia,” he added.

Some of the schools within the PHINMA Education network include PHINMA Cagayan de Oro College, PHINMA University of Pangasinan, PHINMA University of Iloilo, and Southwestern University PHINMA in Cebu City.

Phoenix Investments II Pte. Ltd., an investment vehicle of funds managed by global investment firm KKR, recently closed its P2.52-billion initial investment in PHINMA Education. The amount represented 70.22% of KKR’s total investment worth P3.59 billion.

Meanwhile, Mr. Del Rosario said that PHINMA Corp. is also setting its sights on affordable housing. The conglomerate has a presence in the property segment via PHINMA Property Holdings Corp.

“The next area in the property business that I want to focus on is affordable housing,” he said.

“I know all the major developers are not enthusiastic about it because of the cost and the difficulty of making profits. I’m not yet intimidated by it,” he added.

Mr. Del Rosario said the conglomerate wants to replicate the success of its education segment in the affordable housing sector.

“The challenge is I want to do in housing what we’ve been able to do in education — offering education for the poor. We found a way to do it successfully in terms of delivering quality education, but also profitably,” he said.

“I think we can do the same in housing. That’s the next challenge. That’s the area I want to focus on,” he added.

On Wednesday, PHINMA Corp. stocks rose 0.48% or ten centavos to P21 per share. — Revin Mikhael D. Ochave