Concepcion Building and Industrial Solutions (BIS), the commercial arm of Concepcion Industrial Corp. (CIC), posted a total revenue of Php 2.7 billion in 2015 or 33% growth against 2014, fueled by demand from high-rise residential condominiums and commercial buildings occupied by business process outsourcing (BPO) offices. The group contributed 25% to CIC’s total revenue in the past year. Moreover, it recorded improved sales for its Midea and Otis brands since the respective joint ventures began in 2013 and 2014.

 

Stellar performance of Otis and Midea join ventures

Orders for Otis technologies rose by 92% and Midea air-conditioner sales jumped by 300% in 2015 compared to the previous year. “This positive growth further cements Concepcion BIS’ role as a cornerstone in the flourishing Philippine construction industry,” shares Rajan Komarasu, Group Director of Concepcion BIS. “There is also higher confidence to work with Concepcion-Otis Philippines, Inc. as evidenced by 2015 revenues at Php 690 million, an 81% increase from the past year. Moreover, we have focused on building the Midea brand and introducing new products in 2015, which have resulted in better traction and acceptance of Midea in the marketplace.”

 

The year 2016 marked a positive start for Concepcion BIS, with first quarter revenues reaching Php 700 million. Komarasu adds, “This shows a 19% growth rate compared to the same period in 2015.”

 

As of Q1 2016, the Concepcion BIS has a backlog of orders worth Php 1.7 billion to be delivered throughout the rest of the year. They continue to receive a healthy number of queries from the high-demand segments, putting them on track to reach their projected growth rate of 20% for 2016, backed by Php 15 billion worth of projects in the pipeline. Concepcion BIS’ pipeline projects in the booming industrial and hospitality segments are about Php 2.5 billion and Php 800 million, respectively.

 

Focus on demand for green technologies

According to Komarasu, Concepcion BIS has also observed a higher awareness of going green among its customers, who are demanding more energy-efficient, cost-effective solutions. He adds that consultants have been engaging them in the early phase of projects for advice on applications that can reduce energy consumption.

 

“We have been seeking new green technologies to address this demand. One of these is the memorandum of agreement signed with Ionics EMS, Inc., allowing us to explore opportunities to integrate the Internet of Things (IoT) and automated controls that could help monitor and maximize the efficiency of our solutions,” explains Komarasu.

 

In line with CIC’s Green Footprints Movement, Concepcion BIS has also started to move away from using ozone-depleting refrigerants, and has committed that all its products would switch to environment-friendly refrigerants by the end of 2017.

 

The future of construction

Concepcion BIS is optimistic with the continued activity in the construction industry, citing Philippine Statistics Authority figures that 2015 construction permits adding up to 25.6 million square meters of floor space are up for construction. “Although this saw a moderate growth of 2% compared to 2014, this still translates to a sizeable number of construction activities that will go on for the next three to five years,” notes Komarasu. He also shares that the group is confident that more development opportunities will emerge for the country in the long-term.

 

One of its biggest projects last year was supplying air-conditioning units for a major casino development, and collaborating with major developers on different projects ranging from commercial, high-rise residential, retail malls, and industrial buildings. “Working with several big players in the industry all over the country has earned us deep local market expertise,” notes Komarasu.

 

However, Komarasu warns that the main challenge for his team and the rest of the industry’s players is still the shortage of project managers and skilled personnel. “While the volume of projects has surged, there continues to be a lack of highly experienced people who are capable of managing multiple large projects at once. The increase of projects also caused a shortage of personnel with high technical expertise. This can result in significant project delays and mistakes at construction sites,” he emphasized.

 

To help sustain the currently thriving industry, aside from providing innovative cooling and vertical technologies, Concepcion BIS has built its Project Management and Design and Estimates teams as integral parts of its end-to-end solutions offering. “The value of our services lies in the strength of our Project Management and Design and Estimates teams who provide design assistance in projects during the concept stage. These teams also ensure that projects run on time and cost overruns are minimized for developers,” Komarasu shares.

 

“With a lot of projects on their plate, contractors are unable to cope, and that is when mistakes are made. As a response, we offer the services of our project management team in managing quality installations and overseeing projects to minimize mistakes. Aside from this, we also train our business partners and third parties on how to ensure quality and safe installations.”

 

Though analysts paint an uncertain future for the economy after the recently concluded national elections, Concepcion BIS remains positive about the continuous development of the local construction industry. “We will continue to do our part and support the air-conditioning and vertical transportation needs of the rising Philippines in the many years to come,” Komarasu concludes.

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