JOHN GOKONGWEI JR. (Filipino Businessman)

Filipino Business

John Gokongwei Jr. Means Business

One of the irrefutable and strongest arguments in favor of increasing long-term investment in the Philippine economy regardless of the country's seemingly disconcerting political turbulence - is the bullish multi-billion-peso new investment of Asian's legendary rags-to-riches taipan John L. Gokongwei Jr.

Last Oct. 19 at a private dinner with Anvil Business Club members, he encouraged 180 topnotch young Filipino-Chinese entrepreneurs from diverse industries to aggressively continue investing and help make the Philippine economy globally competitive.

One reason Gokongwei is a billionaire and most of us entrepreneurs still aren't is because he is bold and can see beyond the noisy political tumult. He perceives money-making opportunities where the faint-hearted or the pessimists only see danger.

His daughter Lisa Gokongwei-Cheng of Summit Media first met her future husband Berck Cheng at the Anvil Business Club, of which he was one of the 17 original co-founders.

His son Lance Gokongwei's best friend and compadre Asia Brewery boss Michael G. Tan is also co-founder and past Chairman and President of Anvil. Gokongwei's business partner in the Robinsons Handyman and Do It best hardware chains is Anvil's past Chairman and President Wilfred "Willy" Co.

Anvil co-founder and two term past president Jeffrey Ng of the South Forbes Golf City project said Gokongwei's rags-to-riches success is an inspiration for all young people.

Anvil's first president and Philippine Business Conference chairman George Siy said: "We look up to Gokongwei not only for his prowess in money-making, but for his lifelong discipline, strategic thinking and management excellence."

His group is also investing $400 million in his telecom firm Digitel, which operates the fast-risking maverick Sun Cellular. Digitel, he said, will have a six million-line capacity by December 2005.

As examples of why people should invest in the Philippines now, Gokongwei cited his investing $700 million for buying new Airbus319 jets, which will make his Cebu Pacific Air the youngest and most modern fleet in Asia by the end of 2006. His group recently clinched a deal to bring world-famous Toys R Us to the Philippines this year. His popular C2 green tea drink is doing so well in sales that the 24/7 production can't cope. Gokongwei is investing to double the total production capacity in its Laguna plant.

Reminding the Anvil members that the irreversible force of globalization is changing the rules of business and borders are disappearing, Gokongwei urged the young entrepreneurs to look beyond the Philippines' 84 million population.

He said: "The western colonial powers are now gone from Asia. Now it is us locals who have the opportunity to be business leaders. All over Asia, whether Hong Kong, Taiwan, Thailand, Malaysia, you've got big conglomerates as prime movers."

"Without big local companies, we cannot compete. I urge you young people to look at the Asean region with 500 million people as one big market. Work hard, because you'll be competing against toughest business people in the region."

Gokongwei added: "Our business group, JG Summit Holdings, is investing a lot now in the Philippines, and I have to say that of course I am confident about the economic growth prospects. Even during the troubled years of the Marcos era, we were also investing and making money. We are apolitical. We just want to contribute to economic development." Unwilling to make direct comments on raging political issues like the Garci tapes controversy or the opposition's protest rallies, Gokongwei said ...

"I think President Gloria Macapagal Arroyo is trying her best to push economic progress, and on economic activities we should all try to support her and invest more. There are groups that want to remove her from power. I'm not into politics but I hope they use constitutional means. If they use unconstitutional means to achieve their goals, it might become a habit."

Gokongwei hopes government can help lower our electric power costs, among the highest in Asia, lower bank interest rates (also among the highest in Asia), and help so labor unions won't be too militant.

He hopes the peso will be strong and have a stable exchange rate. He said: "Our business group made P30 billion in the past five years. In 1997, we're $1 billion and now we're $2 billion. We lost in values in recent years in terms of US dollars due to peso devaluations."

Despite his strong faith and investments in the Philippines, his long-range vision to make JG Summit a future global player has made him establish businesses in Singapore, Thailand, Malaysia and different parts of China. Gokongwei advised Anvil members to watch out for emerging global trends like the importance of oil and the re-emergence of China as a world economic superpower.

He pointed out that thoughout most of world history, China was the No.1 world economic power up to the 1600s until the decline during the Ching Dynasty. Today, China is the world center of manufacturing. He said: "The Philippines should be part of these global trends and changes."

Making international business headlines recently is Gokongwei's audacious $1 billion takeover bid for control of Singapore's blue-chip realty conglomerate United Industrial Corp. (UIC), now headed by billionaire Wee Cho Yaw, taipan of Singapore's biggest bank, United Overseas Bank (UOB). This realty giant owns Singapore Land which is among the city-state's biggest office landlords with retail mall Marina Square, office block Singapore Land Tower and others.

When asked to update Anvil members on the UIC deal, he said he couldn't publicly comment since Singaporean laws forbid it as the transaction is now pending, but he said he could reveal some details off the record.

Since the majority of the Anvil Business Club members are entrepreneurs in their 20s to 40s, mainly second, third or even multi-generation scions of top Filipino-Chinese business families, Gokongwei advised them to either continue to work hard in growing their businesses or "just sell out and then split your money."

He urged young entrepreneurs to uphold their immigrant forebears' traditional Confucian values and cultural values and cultural traditions, the legacy of hard work, frugality, discipline, perseverance, non-stop education and resourcefulness.

Despite his acclaimed success, Gokongwei was humble enough to admit certain mistakes such as his group's failed Presto ice cream venture and computer business. For him, if after five years a new business hasn't yet reached No. 2 in industry rankings, he will be inclined to shut down that business.

Within his family, he said he is grateful none of his kids are bums or black sheep, and he enforces the strict policy that family members "who don't work do not deserve to get anything."

In response to a question, Gokongwei confirmed that he has bequeathed half of his personal wealth to his son Lance Y. Gokongwei, because he believes you have to give your designated successor the adequate resources and powers to run the conglomerate smoothly.

The taipan revealed that he got the idea from his friend, non-life insurance tycoon Robert Coyiuto Jr. of Prudential Guarantee and Assurance Inc., whose late father was a victim of a family squabble among his siblings in Pioneer Insurance. Gokongwei said that before his death, the Coyiuto patriarch called a family council meeting and revealed he was bequeathing 51 percent of his stockholdings to his eldest son to prevent future misunderstanding or intramurals. The taipan launched: "Look at the Coyiutos, up to now they are not yet quarreling."

Special guests at the Anvil Business Club dinner were Robert and his youngest brother Miguel "Mike" Coyiuto of PGA Cars, Porsche, and Audi.

The taipan warned the young scions about the pitfalls of not being able to sustain their family's business success beyond three generations.

He said he doesn't want to repeat the mistakes of his rags to-riches great-grandfather Pedro Lee Gotiaoco who wasn't able to build a lasting business group. So he has publicly-listed his companies in order to force him and his heirs to perform well.

He confided: "Almost all leading clans and tycoons who where at the top in business 50 years ago are now gone. They're almost gone."

Gokongwei asked whether the Anvil members can work hard and ensure that their family companies will still be flourishing in the future.

Gokongwei, whose dad died when he was young, dropped out of his school and was jobless for a while. Today, his JG Summit Holdings, Inc. employs over 30,000 people.

Every year, he donates to numerous charities. To keep fit, he does the treadmill or swims 20 laps. He loves to read, and is currently reading two books - The World is Flat by Thomas Friedman and DNA.

The 79-year-old taipan's dedication and hard work is amazing. Like what he did to his phenomenal bestseller C2 green tea drink, he is open to exploring new ideas. He was excited to announce that the following day, Oct. 20, his group would be doubling the production capacity for C2.

Among the tycoons Gokongwei admires are Li Ka-Shing of Hong-Kong, media mogul Rupert Murdoch, Microsoft founder Bill Gates and the visionary Steve Jobs of Apple.

In his 65 years in the business, he has gone through many Philippine presidents and said his lifelong drive to be No. 1 in excellence continues. He said: "As a boy in school, I already had the drive to be No.1. If I achieve my goals, OK, but if not, I always ask why and try to rectify myself."

The Anvil Business Club honored John Gokongwei Jr. with its first Anvil Plaque of Excellence Award, which is given to any entrepreneur or business leader in the organization's 14-year history of dining with international and local tycoons.

Anvil members look up to Gokongwei's life of rugged entrepreneurship, traditional Confucian values, passion and pioneering contributions to economic development as an "ideal role model for the youth." A school dropout, Gokongwei is nonetheless very well-read, and took his MBA in La Salle and advanced management courses in Harvard.

Who among the Anvil members and the youth of the Philippines can muster the guts, discipline and entrepreneurial skills to become the next John Gokongwei Jr.?

Gokongwei is eloquent proof of the dynamic wealth-generating powers of entrepreneurs.

Many developing countries with rich natural resources do not naturally grow prosperous, but need to rely on the creativity and risk-taking spirit of entrepreneurs to create real economic wealth.

In these times when corrupt, banal and divisive politics pollute our news and threaten to dampen our spirits, it was a great wake-up call from Gokongwei.

To the young entrepreneurs to the Anvil Business Club and to the rest of Philippine society, we need to focus our minds and energies on work and exciting, big dreams.

He said: "We need blood and sweat and hard work to make the Philippine economy compete globally, for our family businesses to be world class in this era of globalization. We must compete not just with rhetoric and words. We need hard work, perseverance, innovation, courage, and total dedication. We need to slug it out."