Family businesses must explore overseas market

GOING regional is the path small and medium enterprises (SMEs) are encouraged to go for in the Philippines. The opportunities are plenty.

While the large companies in the Philippines are eager, careful and taking every opportunity as it presents itself in the ASEAN Economic Integration on a more in-depth and long-term vision, the emerging enterprises are in the process of learning and finding ways to expand in the more basic levels.

Our SMEs are like toddlers who are starting to walk and explore. They should think strategic so they can make their products relevant. The past year, I have helped a handful of family businesses expand overseas especially in stable economies like Singapore and emerging growth areas like Indonesia and Vietnam.

At present, my coaching work requires me to handhold a number of companies seeking out opportunities in the ASEAN region. Help is available, and more changes are expected in due time to support the needs of these family enterprises.

Can family businesses from the Philippines thrive in the global arena?

As the ASEAN economic integration begins with its daunting challenges and the world economic center of gravity shifts to Asia, how can we in the Philippines take advantage of opportunities and adapt to irreversible changes? I have identified some inspiring stories of family businesses in the country who successfully hurdled the challenges. Let me start with my former boss and mentor of eight years, Dr. Andrew Tan’s listed company, Alliance Global, Inc.

Alliance Global Group, Inc.

One of the most inspiring new “rags-to-riches” billionaires of Southeast Asia is Dr. Andrew Tan of listed firm Alliance Global, Inc., the new $3-billion holding company for his three major businesses – condominium-developer Megaworld, the world’s biggest brandy producer Emperador Distillers, Inc. and 49 percent shareholdings in the nationwide Philippine franchise of McDonald’s fastfood chain.

It is difficult to believe that authentic “rags-to-riches” sagas built on honest hard work still happen in this modern and complex world. The son of poor immigrants from Fujian province, south China and himself born overseas, Andrew grew up in downtown Manila dreaming of someday owning a store or small business like many of his peers’ families (See my past columns of Andrew Tan’s rise to the top).

Emperador: A global brand after acquiring Whyte and Mackay for P31.7 B

One of the amazing accomplishments of this self-made businessman is his unexpected success in making his homegrown Emperador Brandy into the world’s largest-selling brandy in terms of total number of bottles sold. Tan’s firm sold 7.2 million nine-liter cases of brandy last year, and plans to soon expand into Thailand, Vietnam and the vast China market.

Sources said there were originally 16 groups interested in Whyte & Mackay, but these were shortlisted. Tan personally oversaw Emperador’s win in London over Western conglomerates such as the French luxury giant LVMH Moët Hennessy Louis Vuitton, American liquor group Brown-Forman (producers of Jack Daniel’s Tennessee whiskey), Italian beverage group Gruppo Campari and Russian billionaire Roustam Tariko (producer of Russian Standard vodka), after two rounds of bidding.

Despite being ranked as one of the country’s wealthiest billionaires, Tan remains unassuming and self-effacing when asked about his “rags-to-riches” saga. Here are excerpts from the exclusive interview as featured in The Philippine Star, “Bull Market, Bull Sheet”, by Wilson Lee Flores:

What are the benefits of Philippine companies going overseas?

Apart from boosting our long-term economic strength like other Asian economic powers, Philippine companies expanding overseas and going beyond our comfort zones or going to some uncharted territories, will help sharpen our management skills. This is also positive for the country in terms of raising the prestige and international profile of the Philippines as a fast-growing economy with our own foreign investors, too, going abroad. This Emperador investment in Whyte & Mackay has also increased interest in Philippine tourism among the British people, Europeans and other foreigners, who in the past might have had little knowledge about the Philippines.

Why did you audaciously decide to invest in this British distillery?

I believe this Emperador Distillers investment in Whyte & Mackay is good for the Philippines as a whole, not only beneficial to our business. I believe that our Philippine companies can be globally competitive, although not many have invested beyond Asia like going to the US or Europe. The recent notable ones are Manny V. Pangilinan’s PLDT Group investing in the German tech startup firm Rocket Internet in Europe; John Gokongwei Jr.’s Universal Robina has also this year bought New Zealand’s biggest snack producer, Griffin’s Foods. All these are positive developments, a good sign that we in the Philippines can also go global.

(sorianoasia@gmail.com)

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I am excited to deliver a very timely real estate talk on Sept. 25, 2015, a Friday, at the AIM Conference Center in Makati. The title of the one-day talk is “Anticipating a Real Estate Bubble? Manage Your Growth During Uncertainties”. To reserve slots, please call the organizer, Octopus Branding, at 0915-9108686.

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