MAVERICK BUSINESS LEADERS OF 2005
MANILA, January 11, 2006 (STAR) BULL MARKET, BULL SHEET By Wilson Lee Flores - (But the bravest are surely those who have the clearest vision of what is before them, glory and danger alike, and yet notwithstanding, go out to meet it. – Thucydides)
It’s admirable how indefatigable business people defied the nauseating "Hello, Garci" scandal, corrupt politics, high oil prices and other problems and made a positive impact on the Philippine economy in 2005. Tycoons like Lucio Tan of Philippine Airlines (PAL) and Philippine National Bank, brothers Jaime Augusto and Fernando Zobel de Ayala of Ayala Land and Globe Telecom, Atty. Felipe Gozon of GMA Network Inc., and others have continuously invested in the Philippine economy. However, here is a list of inspiring mavericks – gutsy business people who were the most innovative – and audacious – in their 2005 investments. This list is not in any order of importance, seniority or degree of charisma.
John Gokongwei Jr. – Who can forget this rags-to-riches taipan’s runaway winners like the Sun Cellular free texts and free calls blitzkrieg promos, which shook up the telecom industry? His upstart Sun Cellular’s assault on the Smart and Globe telecom giants validates the age-old economic idea that free market competition is good for mass consumers and for the whole economy. Congratulations, too, for his massive investments to purchase new jets and for drastically slashing the air fares of Cebu Pacific Air. Of course, there’s his popular concoction called C-2 green tea beverage and JG Summit Holdings’ rapidly expanding Mini-Stop convenience stores network, Robinsons malls and other diverse ventures. In a historic speech before 180 young Filipino-Chinese entrepreneurs of Anvil Business Club, Gokongwei challenged them to help the Philippine economy be globally competitive and to expand overseas throughout ASEAN and in booming China.
Henry Sy – Bestowed with the first ever "Father of Philippine Retailing Industry" by the Philippine Retailing Association this year, Sy has been bucking the odds of corrupt politics, high world oil prices and economic slowdown by steadily increasing his diverse investments in new shopping malls, banking, tourism ventures and even in blue-chip public companies like San Miguel Corporation. He is an immigrant rags-to-riches taipan who is not ashamed of his humble beginnings. He also envisions SM Group to rival the western retail giants in the vast China market with ambitious projects.
This year, Henry Sy of Banco de Oro consolidated his control of China Banking Corporation and Equitable PCIBank, plus other banking acquisitions. China Bank was established in 1920 by pre-war Philippine "Lumber King", 19th century lumber pioneer Dy Han Kia’s grandnephew and respected activist tycoon Dee C. Chuan. Among the pre-war clients of China Bank was an immigrant entrepreneur named Go Kim Pah, who was inspired by Dee and who after World War II established Equitable Bank as a major force supporting Philippine economic reconstruction. Coincidentally, Go Kim Pah’s wife is a Lee of Dee C. Chuan’s Li (spelled as Lee, Dy or Dee) clan of Chio-Village near the Go family’s ancestral Hwi-Thai Village both in Kim-Chi municipality of Fujian province.
One of the postwar small immigrant traders who did business with China Bank and Equitable Bank was Henry Sy. The rise of Henry Sy in these two respected banks represents the sunrise of new entrepreneurial money versus the sunset of old money. In the 1950s, China-born traders Henry Sy, Lucio Tan, John Gokongwei Jr. and Jose Yao Campos were looked upon by established business families then like the way we today look upon the small traders at 168 Mall, Divisoria, Tutuban or Baclaran areas.
Manuel "Manny" Pangilinan – Honored as "Management Man of the Year" for 2005 by the Management Association of the Philippines led by its president and the Credit Suisse First Boston managing director Simon Roces Paterno, MVP has brought the Philippine Long Distance Telephone Co. (PLDT) to undisputed leadership as the country’s most profitable enterprise. The Jesuit fathers of the Ateneo de Manila University revealed that MVP is donating a brand-new Manuel Pangilinan building early next year to his alma mater which shall house all the student organizations such as the Guidon college newspaper, Celadon, AIESEC, etc. For the first nine months of 2005 alone, Pangilinan led PLDT to record-breaking P25 billion in profits despite the weak Philippine economy. PLDT assistant vice president Raul Alvarez said: "Pangilinan has transformed PLDT into a leaner, more dynamic and aggressive organization with higher revenues, better services to the public and lower costs. He is a remarkable business leader and an inspiration for all." Manny Pangilinan is also the big boss of Hong Kong-listed First Pacific Group, the multinational group with successful ventures in Asean and China.
Eduardo "Danding" Cojuangco Jr. – The enigmatic and media-shy billionaire and political leader of the Nationalist People’s Coalition has steadily transformed San Miguel Corporation into a leader in global expansion. While narrow-minded radicals and other demagogues decry the irreversible trend of globalization or overseas investments of Philippine firms, Danding knows the wave of the future is to make San Miguel a multinational rival of the world’s biggest western food and beverage giants. He has boldly led San Miguel to invest in China, Hong Kong, Australia, Indonesia and ASEAN. San Miguel’s Anker Bir became No. 2 in Indonesia and its Boag brand became the No. 2 premium brand in Australia. It also has growing investments all over booming south China centered in Guangdong province and Hong Kong.
The San Miguel Food Group staged a strong financial performance for nine months in 2005, driven largely by double-digit revenue growth in most of its businesses, registering consolidated revenues of P44.07 billion for the period, or seven percent higher than 2004 despite political and economic difficulties.
San Miguel early this year acquired Australia’s National Foods Limited for over $1.4 billion. SMC offered Australian $6.40 per share for all the shares of National Foods, defeating the rival bid of New Zealand’s Fonterra Cooperative Group, which originally offered $5.45 a share only to match SMC’s original bid price of $6 a share. SMC made a counter offer of $6.40 share, forcing Fonterra out of contention. In partnership with Joselito "Butch" Dee Campos Jr., Danding’s San Miguel also recently acquired control of Del Monte Pacific based in Singapore for $400 million. Lucio Tan was originally interested in acquiring control of Del Monte.
Cojuangco said when he made the bid in December, "Being one of Australia’s leading consumer product companies, National Foods is a highly attractive acquisition for San Miguel. This proposal reflects San Miguel’s long-term strategic ambition of leveraging its core competencies to expand its presence in non-alcoholic beverages and food in selected countries in the Asia Pacific region. National Foods is a good strategic fit for San Miguel, and their management is strongly committed to growing the business. We recognize National Foods’ strong growth prospects and believe closer links with our existing Australian and Asian operations will create opportunities for both companies."
SMC also controls the multi-billion-peso Berri Limited. Berri is Australia’s largest citrus fruit processor and plans to increase its Asian sales to 30 percent from eight percent using San Miguel’s investment presence in the China beer and beverage market, the largest in the world.
Joselito "Butch" Dee Campos Jr. – He is an alumnus of Cornell University, son of United Laboratories (Unilab) founder immigrant taipan Jose Yao Campos, grandson of the late lumber magnate Dee Hong Lue and great-great-grandnephew of 19th century Philippine lumber industry pioneer Dy Han Kia.
In a dramatic end to a big business corporate battle for control of Singapore-listed Del Monte Pacific Limited, which owns the world’s biggest pineapple plantation in Bukidnon province, Mindanao, "Condiments King" Butch Campos partnered with Danding Cojuangco of San Miguel Corporation to win the bid in a deal worth $420 million and to thwart a rival bid of Hong Kong-based First Pacific Co. Limited led by Manny Pangilinan and backed by the Salim Group of Indonesia.
Campos is former chief executive officer of the country’s top pharmaceutical conglomerate Unilab now run by his sister. Today he controls NutriAsia Inc., producer of UFC catsup, Datu Puti vinegar and the biggest condiments manufacturer in the Philippines. His firm and San Miguel formed NutriAsia Pacific Ltd., to buy out the Lorenzo family’s 22-percent stake in Del Monte Pacific as well as the 40-percent shareholdings of Italian food maker Cirio Finanziaria in Del Monte Pacific.
Butch Campos controls 58 percent of NutriAsia Pacific, while San Miguel controls 42 percent of shares. Hong Kong Shanghai Banking Corp. Ltd., Henry Sy’s BDO Capital and Investments Corp. and the government’s Development Bank of the Philippines have agreed to provide debt financing to the NutriAsia Pacific mandatory tender offer. The total value of the deal is estimated to be $420 million. First Pacific had originally offered $164 million to purchase the Cirio stake, and prepared another $260 million for a general offer for the rest of the Del Monte Pacific shares as required under Singapore law. Cirio’s shareholdings had been offered for sale since 2003, with San Miguel initially losing a bidding to "Tobacco King" Lucio Tan.
The Singapore-listed Del Monte Pacific owns Del Monte brand rights for the Philippines and the Indian subcontinent, plus valuable long-term contracts to supply canned pineapple, juice and mixed tropical fruits to North America, Europe and the Far East. Del Monte Pacific businesses include canned fruits, various tomato-based sauces, fruit salad cream, pasta, condiments, juice drinks and concentrates, and what former Agriculture Secretary Cito Lorenzo once told this writer is "the world’s largest and among the most efficient pineapple plantations." In the Philippine market, their products are sold using the Del Monte and Today’s brands, controlling over 85 percent of the total market for pineapple solids and 80 percent for mixed fruits and tomato sauce.
In the aftermath of the 1997 Asian financial crisis, Butch Campos led his family and Unilab Group to partner with the Zobel-Ayala clan to acquire the Fort Bonifacio Global City prime real estate project from the then cash-strapped First Pacific Group. Campos said of the surprise Del Monte mega-deal: "This is an exciting opportunity to continue to build great brands. Together with San Miguel Corp., we will continue the exceptional growth of the brand and further strengthen Del Monte Pacific’s geographical reach." It is expected that like Unilab, Campos will most likely lead NutriAsia Pacific to become a multinational player rivaling the global western giants in China and Asean investments.
Owners of 168 Shopping Mall – A low-profile Divisoria textile and garments entrepreneur of the 1960s teamed up with two partners to establish the 168 Shopping Mall in the heart of Binondo, Manila, which has become the phenomenal business success story of 2005. From the traditional elite, fashion czars, frequent suki world-class shopper Imelda Marcos, provincial traders to the masses, shoppers from all walks of life have patronized the 168 Mall to survive the high world oil prices, the political turbulence and economic crunch of the times.
At the recent Mandarin Hotel wedding dinner of Intel product manager Sharon Khohayting, the media-shy owner of 168 Mall was coincidentally seated beside this writer. On taxation and other complaints, he said their tenants are now working out pragmatic win-win solutions good for both government and small traders. When asked to demystify the success secrets of the 168 traders, he said their tenants are small traders with low overhead costs and low inventories of goods, that the nimble micro-entrepreneurs personally source their goods from China factories or closing-out sales, that the traders and their kins are hands-on managers of their stalls, and that the traders follow the age-old Binondo business strategy of "lowest profit margins and big volume sales."
All these mavericks of Philippine business are not superhuman, but ordinary mortals with extraordinary dreams and vision. They should inspire all of us – whether tycoons, small entrepreneurs or professionals – to defy the corrupt and dishonest politics threatening to engulf our economy with pessimism. The best way to predict the future is to create it ourselves. We should be masters of our own destiny. We should continuously seek new challenges in crises situations, work hard, defy the odds, dare to dream, and boldly invest in a better future.
Chief News Editor: Sol Jose Vanzi
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