Why PH's top developers turn to Datem for construction projects

Posted at 07/20/2014 9:11 AM | Updated as of 07/21/2014 3:26 PM
Datem founders (from left), Morris Agoncillio, Vice President of Engineering; Levy Espiritu, President; and Arnold De Asis, Vice President for Operations, celebrate the company's 30 years in Philippine construction.

MANILA - What do ABS-CBN's ELJ Building, The Mind Museum, Discovery Shores Boracay, and St. Luke's Medical Center in Bonifacio Global City have in common?

All these buildings were constructed by construction giant Datem Inc.

2014 is turning out to be one of Datem's busiest years, with 28 on-going construction projects in the country.

The company, which celebrated its 30th anniversary this year, shows no signs of slowing down and is even expanding into affordable housing, water and mineral resources.

ABS-CBNnews.com recently sat down with Datem's founders, Levy Espiritu, president; Arnold P. De Asis, vice-president for operations and Morris S. Agoncillo, vice-president for engineering to talk about starting Datem during the turbulent 80s, weathering the financial crises in the 90s and late 2000s, and now, thriving in the Philippines' boom years.

The three men recalled how they met while working for a big construction company. In 1984, they decided to start their own business, with around P90,000 in capital.

"We had had around 6 years experience with the construction company... (But) we saw the opportunities to go into construction with innovation and technology. That was the start of Datem," Espiritu said.

Datem started by building houses. One of their first projects was an all-wooden house for newspaper editor Lorna Kalaw-Tirol.

HARD TIMES

Agoncillo recalled the political situation in the Philippines at that time was not conducive for business. "Ninoy Aquino was just assassinated. Those were hard times, no foreign investors, no projects," he said.

Datem halted operations from 1986 to 1988 due to the political and economic instability in the country, but resumed operations in 1989.

The company slowly graduated to bigger projects, such as the Gateway Business Park.

Interestingly, ABS-CBN Corp. actually played a key role in Datem's story. In the early 1990s, ABS-CBN was looking for a construction company that can construct studios in 30 days, including Holy Week.

"We were recommended (to ABS-CBN) by the Gateway Business Park. They said, 'ask Datem, they can even do it earlier.' That was a challenge for us. I guess we performed and that was the start of our relationship with ABS-CBN and the Lopezes," Espiritu said.

ABS-CBN ELJ Building

ABS-CBN then tapped Datem for the Eugenio Lopez, Jr. Communications Center (ELJ), which was constructed in 1998. Datem partnered with a foreign company, and used a new construction technology to build ELJ Building, which they finished six months ahead of schedule.

"We saw the opportunity to offer something different, a new technology that would be advantageous to ABS-CBN...We eventually won the project on the basis of the technology and the time. If the building is done conventionally versus the technology we introduced, we saved the owners 6 months," Espiritu said.

After ELJ, Datem started getting more projects, such as One Rockwell, Power Plant Mall, Greenbelt 2,3 and 4, Market, Market, Serendra, The Columns, and St. Luke's in Bonifacio Global City.

Other notable projects Datem has completed in its 30 years are the world-class Discovery Shores Boracay, Mind Museum, Mercury Drug's MDC in Libis, Oakwood Premier in Makati and Our Lady of Guadalupe Church in General Trias, Cavite.

CHALLENGES

Datem has weathered challenges, such as the Asian financial crisis in the early 1990s and the global financial crisis in the late 2000s.

"We endured a lot storms, but we were able to keep our heads above water. That made us stronger. If any crisis comes again, we will know how to handle it," Agoncillo said.

Asked what was the biggest challenge they faced in 30 years, Espiritu said it was making sure Datem maintained its integrity when it comes to dealing with their people.

"Some of the contractors, during the hard times, they said you can't survive the business if you pay your workers right with the minimum wage. They said you should give them lower because how will you win projects? We took the challenge. We said we will pay our workers the right pay. Their loyalty is with us, they give us productivity rates that are very good, then we are able to compete. If you increase productivity, you also raise the quality. That's what our clients are looking to Datem for their projects - the quality work and the speed in the completion of the projects," he said.

Agoncillo said another challenge was to plant the core values of integrity, excellence, innovation and "malasakit" in each Datem employee.

"Because of that, we have established good relationships with our clients. Proud to say most of our ongoing projects are repeat orders... If not repeat orders, negotiated na yun susunod na projects," he said.

BRAIN DRAIN

Another challenge Datem faced was the loss of their engineers, architects and workers, who were recruited to work in the Middle East, Singapore and other countries

"Challenge din for us, yun staff. When there was a boom in Dubai, there was an exodus to Dubai. Mga early 2000... After that, it was Singapore and Macau," De Asis said.

Agoncillo even recalled a time when he visited Singapore and some former Datem staff wanted to treat him to dinner. "I was surprised there were about 30 of them who treated me to dinner," he said with a laugh.

Datem employees are still in demand, but now it's other construction companies that are trying to poach them.

"In demand talaga ang workers. There was a time they (recruiters) were going direct to our project sites and when the engineers and architects go out of the project site, they approach them and offer na," Espiritu noted.

ON-GOING PROJECTS

Construction site of Megaworld's Venice Canal Grand Mall

Datem is benefiting from the Philippines' booming property market, which some property consultants have called the best in decades.

"Our key business is high-rise construction, residential, hotel, office, commercial... We have grown tremendously in the last three to four years, and all of these projects are from the private sector," Espiritu said.

Datem currently has 28 on-going projects, mostly in central business districts in Metro Manila.

"We're doing the Discovery Primea, the One Shangri-La Place, Net Park, seven hotels and two casinos at Resorts World and Winford Hotel in Manila, 3 to 4 office buildings and the rest are residential condominiums. Also the Savoy in Boracay," De Asis said.

Their list of clients reads like a list of the Philippines' biggest property developers and companies. Datem is currently constructing the following:

Megaworld's Two Central, Venice Corporate Center and Venice Grand Canal Mall;
Unilab's corporate center;
Robinsons Land's Axis Residences;
Anchor Land's Monarch Parksuites;
Arthaland's Arya Residences;
NuvoLand's Dream Tower;
Alphaland's Makati Place; and,
Greenfield's Twin Oaks Place.

It is also constructing Federal Land's Grand Hyatt Residences and Williamson's Incorporated's Ascott BGC, both in Bonifacio Global City.

Datem's officials believe the Philippine construction industry shows no signs of slowing down.

"We see it continuing because of the thrust of government towards tourism projects... This is related to construction because you need hotels, resorts and facilities to support this tourism endeavor of government... Also, the BPO business is still there. It's still growing, now it's KPO - knowledge proess outsourcing because of engineering, design, medical... It has been growing not just in Metro Manila but in major cities around the country," Espiritu said.

AFFORDABLE HOUSING

Arthaland's Arya Residences under construction

Datem is also diversifying into other industries related to construction with its subsidiaries Datem Water, Datem Homes and Datem Mineral Resources.

With Datem Water, Agoncillo said they are now in talks with water districts around the country for bulk water projects.

"We are introducing the water treatment technology. There is no chemical dosage. Very environment friendly and the expenses are very small to be affordable to the small municipalities... We are in talks with some municipalities," Agoncillo said.

Datem is also making its foray into affordable housing via Datem Homes. Datem Homes' flagship project is Datem Horizons East Ortigas, located in Cainta and Angono.

"We're doing one in Angono for affordable housing. Our range is P900,000 and P1.6 million for a house and lot. In Cainta, we are doing a medium-rise building, offering about P3 million a unit," De Asis said.

De Asis said Datem Homes is also planning projects in Cebu, Davao and Iloilo.

"We're at the affordable market because there is already a saturation in the high-end luxury condominiums. But we believe there are still a lot of Filipnos who would like to own a house at a range of P1 to 3 million," he said.

PPP VENTURES

Like many companies, Datem is also interested in government's public private partnership (PPP) program, particularly in airports and hospitals.

"We will continue to develop our core competency in high rise construction but we are also looking at partnering with government in PPPs," Espiritu said.

Not to be content with its success in Metro Manila, Datem is looking to expand its operations in major cities outside of Metro Manila and in the Visayas, as well as other Southeast Asian countries.

"We are in Visayas through Boracay projects. We are going to Iloilo, Davao. We initially have it in Asean countries like Vietnam, Cambodia, Myanmar and East Timor," Espiritu said.

"The growth is in Asean now, not Europe or US. Major players in the industry from US and Europe, even from the mainstream Asian countries like Japan and Korea, they're all coming here... And it will continue to grow," he added.