A Filipino First: Sabin Aboitiz’s Vision for Aboitiz Group’s Tech-Driven Transformation

Aboitiz Group’s commitment to being the first techglomerate in the Philippines isn’t so much about trendy buzzwords as it is about driving economic development for the country’s industry and its people, explains President and CEO Sabin Aboitiz.

If you search online for the term ‘techglomerate’, one of the first results to pop up is the Aboitiz Group. This term refers to a legacy conglomerate that has harnessed technology and a startup mindset to dramatically transform its operations. Aboitiz Group perfectly fits this definition, proudly proclaiming itself as the Philippines’ first techglomerate.

Founded in 1920, the company began its journey in the late 1800s as a hemp trading business and has since evolved to encompass power, financial services, food, land, construction, shipbuilding, and infrastructure. Leading this transformation is President and CEO Sabin Aboitiz, now four years into his tenure, who took the reins just as the COVID-19 pandemic emerged, forcing him to rethink his initial leadership strategy.

The Shift to a Techglomerate

“Before I came in, I wanted to embark on a transformation story, but the pandemic was the wrong time to do it, for various reasons,” Sabin Aboitiz tells The CEO Magazine. “During the pandemic, people weren’t focused on the long-term. It was about survival.”

During the pandemic, Aboitiz’s focus shifted to the organization’s people, helping them and their families stay afloat during these difficult times. But now, as the memory of the pandemic recedes, he has firmly placed transformation back on his agenda. “I’m two years behind where I wanted to be in general terms,” he admits. However, he has now set Aboitiz Group firmly on the transformation path.

The Great Transformation

A company’s legacy can be both a blessing and a curse in the business world, bringing with it roots and robustness but also lethargy. “Companies like us are known for bureaucracy and slow decision-making,” Aboitiz admits. “And it’s true, it’s a struggle. We’ve had these policies that have been there for years and to turn that around is like turning a 20,000 metric ton vessel, which takes a while.”

Aboitiz describes the process as one of reinvention, taking advantage of the synergies a conglomerate offers while removing inefficiencies. Foremost among the benefits is the ecosystem that comes with it. “If one business does badly, you can always survive. If you’re a single business, the risks are higher,” he reflects. “The negatives are the slowness and that your focus is all over the place.”

It’s these drawbacks that Aboitiz seeks to temper by harnessing the power of technology across the group and creating synergies, known company-wide as ‘The Great Transformation’. He advocates for agility, leading the company to rethink its structure. “We have federalized more, so our units have been let go to operate more on their own, particularly when it comes to hiring,” he explains.

Change in Thinking

This shift in mindset is crucial to the strategic overhaul, with Aboitiz highlighting ten key behaviors integral to its new persona: openness, entrepreneurialism, synergistic, innovative, smart, fast, simple, articulate, purpose-driven, and fun.

“That transformation has led us to become a techglomerate, which is basically operating a legacy business using technology and moving forward, maximizing tech to compete in the new world,” he explains.

Harnessing the right technology, rather than tech for tech’s sake, is crucial, as is creating new roles for the right people – often through trial and error. “But making those errors is part of the transition into a techglomerate. This is an all-new space for us,” he says.

Some of the new tech programs include a predictive cement production process delivering top-quality products, digital twins for power plants preempting failures, and AI-powered solutions optimizing operations in its banking arm, UnionBank.

Broader Horizons

New business opportunities identified by the Group are largely in the tech sphere, particularly data innovation. Aboitiz Data Innovation, launched in Singapore in 2020, focuses on IoT, digitization advisory, and data validation services. Initially designed to accelerate operational efficiencies within the group, its successes have expanded its services to the market.

Aboitiz Group’s diversification strategy includes major moves into airports and consumer products. Following the acquisition of Coca-Cola Beverages Philippines in partnership with Coca-Cola Europacific Partners, and Citibank’s consumer banking business in the Philippines, Aboitiz Group has strengthened its consumer-focused ecosystem.

Preparing for the Future

While the new acquisitions bring gravitas, they do not grant immunity to market conditions. Aboitiz prepares for any eventuality, emphasizing the importance of a strong balance sheet and strategic sense. “Sometimes, your businesses don’t make sense alone, but they make sense when you’re with other people. Right now, you are much stronger if you’re integrated.”

This integration model is employed in all countries of operation, minimizing supply chain issues and partnering with external businesses to lower costs.

Community and Sustainability

People are an intrinsic part of this forward-thinking approach. “Community must grow with you,” Aboitiz stresses. “We spend a lot of time talking about that, making sure we do whatever we can do, be it through education or advice. During the pandemic, we spent a lot of time and effort with mental health to ensure our team was really OK.”

Aboitiz Group’s quest for techglomerate status requires cohesion and collaboration across its diverse business, still a work in progress. Government support creates perfect conditions for its resurgence, with President Bongbong Marcos engaging regularly with private sector leaders.

A Legacy of Clean Energy

Aboitiz Power Corporation, a major pillar of the Aboitiz Group, supplies power to around 20 percent of the Philippine population. With a focus on clean energy, it balances carbon-based energy with a goal of a 50-50 portfolio between thermal and renewables by 2030.

Innovative new technology in nuclear energy is also being explored, with partnerships in countries like the United States, Canada, and Japan.

Making It Happen

The Aboitiz Group’s sustainability efforts integrate nature-based solutions, education, and poverty alleviation through empowerment. Initiatives like Elevate AIDA drive economic empowerment among women by upskilling them for positions in the digital economy.

Aboitiz Group’s journey toward becoming a techglomerate calls for continued innovation and adaptation. As Sabin Aboitiz emphasizes, “For me, it’s really about supporting the people. My focus is on that: How can I make you successful?”

By focusing on both what’s good for the country and its business, Aboitiz Group is poised to thrive for another hundred years, driven by its commitment to technology, sustainability, and community.

4o