Edgar Saavedra, the 38-year-old co-founder, president and chief operating officer of industry giant Megawide Construction Corp., plans to join more public-private partnership projects as the Philippines rebuilds its infrastructure system.
“A lot of our plans and strategy now is to get more PPP projects,” Saavedra says during the Anvil Business Summit 2016 organized by the Association of Young Filipino-Chinese Entrepreneurs at Marriott Hotel Manila in Pasay City.
Saavedra established Megawide with Michael Cosiquien in 1997 after graduating with a degree in civil engineering from De La Salle University in Manila a year earlier. The partners took Megawide public in 2011.
From building projects for SM Group, Megawide expanded to government infrastructure projects.
“So I would say, more than half of our revenues and earnings are coming from these PPP projects, from airports, to school buildings, now to transport terminal project,” says Saavedra.
Megawide is now on its third PPP project, as the construction of Southwest Integrated Transport Terminal starts.
“This project is a vision to ease the worsening traffic in Metro Manila,” Saavedra says.
It followed the “construction of classrooms in more than 1,700 sites on different locations on seven different municipalities in Luzon” and the expansion and operation of Mactan-Cebu International Airport.
“It’s the spirit of believing in ourselves that led us to this new business,” Saavedra says. “We were able to develop the skills in winning the bid in PPP.”
Saavedra, the youngest among five siblings who grew up in a small town in Mindanao playing ‘sipa’ and other local games, treasures his experience as a child “because I learned to relate to people from all walks of life.”
“When I was about six years old, my parents decided to send me to Zamboanga City with my ‘lola’, where I can be enrolled in a private school. I still remember the day when I was away from them. It was the loneliest day in my life. It was very hard for me because I’m the youngest among the five siblings and I’m very attached and close to all of them,” he says.
Saavedra says this experience defined what he is today. “This is how I learned my independence early. From the town and [being a] sheltered child, I became a strong and resilient person. During summer, I would go back to my town to work for my father who assigned me as a timekeeper and errand boy in our shipping business. Such small learning, I realized now, were very important in molding my behavior and personality as an entrepreneur,” he says.
The next major development in Saavedra’s education was when he went to college at De La Salle University.
“Many people choose this school based on the prestige of the quality of education. But me, I just chose my school back then because I thought it was cool to study there. This was where I met Michael Cosiquien who later became my partner in the business and who shares the same drive and passion for the company as myself. I also met many new friends who also later joined us in helping grow the company,” he says.
Saavedra chose electronic engineering as his first course, “because I thought it was fun and I loved playing computer.”
“One day, I realized I couldn’t see myself as an electronics engineer. I asked myself what I am gonna do after graduating. I imagined myself running and preparing shots for televisions. I thought it is what an electronics engineer does. So I decided to shift to civil engineering. Now you know why I’m in the construction business right now,” he says.
It was after college that Saavedra and Cosiquien decided to go into construction business together. “Our first project was a P5-million residential building in Quezon City. I remember we didn’t even know how to do a proper bidding for the project so we had someone to do it for us. We were fresh graduates and we had no idea on how to [do estimates]. But we have [pushed through] the construction business,” says Saavedra.
He says being new to the industry turned into an advantage because they felt they had “nothing to lose.” And soon enough, they found a “silver lining” amid the crisis.
“That was in 1997. And it was the time of Asian financial crisis. So many people warned us about starting business during that time. But we went ahead anyway partly out of bravado but also out of our inexperience. It was the hard part but we were able to find a silver lining. There was a surplus of materials during the crisis. So we were able to get them at a cheaper price. Hiring employees back then was also a lot easier since job opportunities were limited. So we got the chance to hire more skilled workers and engineers easily,” he says.
As newbies in the construction industry, Saavedra and Cosiquien had to rely on personal research and “forming relationships with experts to improve [their] construction methods.”
“Through email, we were able to meet a German national who happened to be married to a Filipina and was willing to help us introduce the technology in the Philippines,” Saavedra says. “In connecting with experts from around the world, we were able to learn about the latest construction technologies and advanced techniques and methods.”
“We became the company with the most advanced formworks system in the country and this eventually led us to the prefabricated concrete or precast”•another new technology that gave us the edge because we delivered better quality construction at a faster time with lesser manpower,” Saavedra says.
In 2007, Megawide was awarded the Berkeley and Grass Residences, two big projects of SMDC, the residential housing arm of the SM Group.
“Everyone wanted to get those projects. We were neophytes and everyone was struck to see that we use many new technologies from Germany which allowed us to give competitively and offer a quick turnaround time,” Saavedra says.
This opened a flourishing relationship with the SM Group’s Sy family who eventually became shareholders in Megawide through Sybase Equity Investments Corp.
In their attempt to go public, Saavedra and Cosiquien started consulting college friends at DLSU about “branding and business development.” Eventually, their former classmates Oliver Tan and Louie Ferrer became the company’s financial consultant and marketing consultant, respectively, which led to their “initial public offering” in 2011.
“Our shares were oversubscribed and we were able to raise capital to invest in a highly advanced precast production company, now considered as one of the largest and most progressive in Southeast Asia. We were able to invest in more formal technologies and highly advanced equipment. We now have the capability to undertake bigger and more projects with faster turnaround. This gave us another advantage to compete with other big companies,” Saavedra says.
Saavedra says being inexperienced and “suwail” at first, they were “not influenced by traditional practices.” He says they “sought out own solutions to come up with fresh ideas.”
“We dove into every piece of technology we encountered and deepened our understanding of construction processes to find their value,” Saavedra says.
Recently, the Megawide group welcomed CitiCore Power, “an all-renewable energy producer with assets in solar, hydro and biomass,” with whom they plan to “produce 1,000 megawatts of clean energy for the country.”
“While we wanted to enter the energy sector, we want to keep our focus for renewable energy only, as a part of our commitment to generate a healthy energy surplus and to do our part in mitigating the effects of climate change,” Saavedra says.
Megawide posted a P1.5-billion profit out of P15-billion revenue in 2015.
Sybase Equity of the Sy family is selling its 17.2-percent stake in Megawide as the latter diversifies into power. The Sy family is already into the power sector with a controlling stake in National Grid Corporation of the Philippines, which prevents it from engaging in power generation.
“Today, Megawide has become an innovative engineering and infrastructure developer with assets in construction, airport, progressive property development and renewable power generation,” Saavedra says.
On how Megawide became a successful company, Saavedra says drive and passion played important roles. “In our early days, we didn’t know much about running a construction company because we had no experience, but we loved what we were doing, so this gave us the drive to achieve our goal. We were very passionate for our work. We’re almost like a fool, otherwise, we would’ve given up,” he says.
“But my greatest learning has to be the simplest. Our growth was not by any means conventional, nor did we find any shortcuts. There is no set of formula for success. We just get going. Because we didn’t know what the future would hold for us, we made our mistakes and had our failures. But they eventually became learnings and skills that we used to get to where we are now,” he says.
Saavedra now shares six simple keywords to young engineers: believe, drive, fate, learn, skills, and goals. “Because you need to believe in yourself, you need to love your work, then you will have the drive to keep on doing it. Never be afraid of failure because this will give you learning and eventually turn this to be your skills. With your skills, you will have a bigger chance to achieve your goals. I guess, that’s how I ended up here,” says Saavedra.