PSE-listed call center sets sights on Europe, Asia and Australia

Hoping to take advantage of the huge demand for outsourcing services worldwide, Fil-Hispano Holdings Corp., the first and only call center listed on the Philippine Stock Exchange, is scouting for opportunities in Europe, Australia and the Asian region.

Fil-Hispano’s Tarcisio M. Medalla said the company is considering tapping opportunities in Malaysia, Singapore, China, India, Australia, and the United Kingdom to allow it to optimize capacity utilization and generate a higher return on assets.

Victor M. Endaya, president of Fil-Hispano call center unit Advanced Contact Solutions Inc. (ACS), said the diversification plan is aimed at maximizing the use of the call-centers that are now primarily used at night to service US clients, and in turn increasing return on assets.

"We hope to get new clients or enter into partnerships with other business processing outsourcing operators," Endaya said.

Medalla, however, said the US will continue to be the company’s major target market. At present, 80 percent of Fil-Hispano’s call center business is coming from the US.

Endaya said the company is also looking at acquisitions, mainly in the medical and legal transcription outsourcing business.

From only 700 call center seats in 2003, ACS now has a total of 2,800 as of end-March this year. The company expects to end 2005 with 3,000 call center seats on its strong competitive size and cost-efficient infrastructure.

Fil-Hispano reported a net income of P51.4 million in the first three months of the year or more than three times the P14.2-million profit posted in the same period in 2004 due to the continued expansion of its call center operation.

The company expects its net profit to grow by 126 percent this year to around P270 million from P119.5 million last year. Revenues are also seen to increase to P1.3 billion from only P647 million on existing call center contracts alone.

ACS currently has three world-class facilities at the Citibank Center in Makati City, The Allied Bank building in Makati, and in Cabuyao, Laguna. It is looking at Cubao, Libis, Alabang and Ortigas as future sites for expansion.

Endaya said Fil-Hispano will push through with its planned P300-million stock rights offering in July to fund its planned expansion and acquisitions. He said the company may also tap borrowings.

Under the planned rights offer, qualified shareholders may buy one share for every two common shares held. Each rights share will be priced at P1, a sharp discount to market price and from the P3.95 per share price of a secondary offer last November. Last Friday, Fil-Hispano closed P7.80 a share.

Medalla said the company plans to change its name to Paxys Inc. which is a contraction of the words "Pacific Systems."

"The new name is more descriptive of its current activities and signals a new era for the company its drive to excel in this globally competitive and thriving business," Medalla said.

Fil-Hispano was formerly engaged in the manufacture and sale of ceramic wall and floor tiles.

In 1999, however, the company decided to shut down permanently its ceramic tile manufacturing facilities due to unprofitable operations. Since then, the company has developed a business plan to raise funds to retire its existing loans and to fund investments in the information technology business.

ACS has been increasing its capacity significantly over the last three years and is confident its break neck expansion rate will be sustained in the medium term in view of the promising prospects of the outsourcing industry.

The outsourcing business is expected to outperform the telecommunications industry as the Philippines’ top money maker over the next five years with the continued expansion of call center operations in the country. The worldwide demand for outsourcing services is expected to grow to $180 billion by 2010.

With the Philippine cost advantage, English proficiency and the country’s close tie with the US, the Philippines is expected to be one of the major beneficiaries of the growth opportunity in the offshore outsourcing business.