Project Crystal
The issue. Metro Pacific wanted the sugar business understood on its own terms. Food was the growth thesis. The mill was the asset. A conglomerate that buys a processor without a view on farmer supply, and on what the plant can still give, has bought a crop cycle.
The questions.
What is the business case for buying Central Azucarera de Tarlac, once sugar is separated from the food narrative?
How does the mill keep cane coming from farmers, in a year when the price or the weather argues otherwise?
Which assets can be made to earn more, and which are already at their limit?
What is the growth left in the target, after the easy operating fixes are taken?
The outcome. Commercial diligence and the valuation were run on the plant, not on the strategic label. Metro Pacific left with a realistic value, and with the operational improvements a post-merger integration would have to deliver for that value to hold. Supply risk, asset upside, and growth were no longer one number.
Project Nikola
The issue. MIESCOR wanted an internal valuation, and a view of how to raise it in the private market. External capital was under consideration. Capital raised against an under-explained business prices the confusion. Capital raised against a stated potential, with the moves to get there, prices the plan.
The questions.
Which levers actually move MIESCOR’s value, and which are activity?
What is the full potential, in cash rather than in ambition?
What has to be visible, and done, before that potential shows up in the valuation a private investor will pay?
The outcome. The valuation was built so management could see the distance between the business as it stands and the business a growth investor would underwrite. The moves required to close that distance were named. MIESCOR left knowing what would increase its private-market value before it asked anyone else to fund it.
Project Paris
The issue. CRH wanted into plasterboard distribution and retail. A building-materials manufacturer can ship board. It cannot assume the wholesale and retail layers will make room. The entry depended on who already sells it, and on what they earn for doing so.
The questions.
How is plasterboard distributed and sold, at wholesale and at retail, once the informal path is counted with the formal one?
Who are the major distributors and retailers, and which of them can be displaced?
What margin do the middlemen command at each stage, and is that margin the barrier?
How does CRH enter, given that structure, rather than around it?
The outcome. The market was segmented and the value chain was mapped stage by stage. Margins were determined at each layer, so the entry was priced against what the channel keeps. Major distributors and retailers were named. CRH left with a view of how to enter the Philippine plasterboard market: where the chain will take a new supplier, and where it will not.
Project Garden
Project Ceres
The issue. Jardine Distribution needed the Philippine agricultural-chemical industry read as a chain, and a path for a distributor to accelerate in a market that was no longer young. The product was mature. The question was whether growth was still available in position, and whether consolidation was the way to take it.
The questions.
Who holds each stage of the agri-chemical value chain, from formulator to farm?
What margin does each position earn, and what happens to that margin when a player moves?
Where does a distributor find growth once the category has stopped expanding?
What is gained, and what is destroyed, by consolidating across segments rather than staying in distribution?
The outcome. The value chain was defined and the competition was segmented by where each player stood on it. Margin was assessed as a function of position, not as an industry average. Mergers in other countries, across different stages of the same chain, were then used as the test of what consolidation does. Jardine Distribution left with a point of view on where M&A could accelerate growth, and where buying an adjacent layer would only buy its problems.
The issue. Itochu wanted the business case for a stake in Mabuhay Interflour Mill. The Philippine flour market is held by a few millers. A new owner does not get growth because wheat is milled. It gets growth if utilization, grade, and customer access beat the mills already running.
The questions.
What is the case for buying in, once the oligopoly is treated as the structure rather than as a backdrop?
What drives value and growth: wheat price, capacity, utilization, grade, or demand?
Who are the players, and where do they actually compete?
How does a new owner enter a market the incumbents already consider closed?
The outcome. Industry and commercial diligence were run together. The oligopoly was mapped, and the drivers were separated: wheat-price volatility, capacity, asset utilization, grade of flour, and market demand. An industry cost curve and a firm-level manufacturing cost curve put Mabuhay Interflour against the mills it would have to beat. Customers and distributors were interviewed, so the route to market was not taken from the information memorandum. Itochu left with the factors that decide success in domestic flour, and with a view of whether this mill had them.
Project Project Kent
The issue. Hyundai Steel wanted the industry understood, and the business case for entry written, before capacity was pointed at the country. Downstream demand was the easy claim. The hard claim was who already holds the customer, and what margin is left after the distributor is paid.
The questions.
How much can the Philippine steel market grow, once the economy and the industries that actually use steel are the forecast?
What is the structure, and where does the margin sit from manufacturer to distributor?
Who are the players and the customers that matter, by product rather than by tonnage?
What is the case for entering, and what case does not survive the channel?
The outcome. Market structure and distribution channels were mapped, and margin was assessed at each stage. Size, product segmentation, and customer segmentation were separated, so “steel” stopped being one market. Future demand was tied to Philippine economic growth and to the downstream industries that consume it. Hyundai Steel left with an entry case built on who buys, who distributes, and what the chain keeps.
Project Alchemist
The issue. Kalinisan Chemicals wanted a value-creation project in support of selling a stake. Cleaning chemicals was the business. The existing customer base was the constraint. A buyer will not pay for markets the company has not named, and will not pay a growth multiple for a book it already has.
The questions.
What has to change for the target valuation to move, rather than for the asking price to move?
What is the growth case, in customers the company can reach, not in a category forecast?
Which cleaning-chemicals markets are open, and which are already held?
The outcome. The customer base was segmented. Segments where Kalinisan was underrepresented, and segments where it was absent, were separated from the accounts that already explain the earnings. A growth strategy was then written around the underserved markets, so the higher valuation had a route to it. The company left knowing which segments to target before the process,