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The hidden champions of Philippine business

If I cannot do great things, I can do small things in a great way. Rev. Martin Luther King Jr.

Congratulations to Young Star columnist Samantha “Mae” T. Coyiuto for being accepted into the prestigious Pomona College, joining a daughter of Jollibee fast-food chain founder Tony Tan Caktiong and son of SGV Group founder Washington SyCip, who both also studied at this school, recently ranked by Forbes magazine as No. 9 among the “Best US Colleges” in a roster of 650 colleges.

The top 10 US colleges, according to the list Forbes published on Aug. 1, are Princeton, Williams College (previously No. 1 for two years), Stanford, the University of Chicago, Yale, Harvard, the US Military Academy (better known as West Point), Columbia, Pomona College and Swathmore College. Williams College, the 123-year-old Pomona College and the 148-year-old Swathmore College are America’s top private liberal arts colleges  low-key but elite hidden champions.

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Beyond respected giants like PLDT, SM, Ayala, JG, ICTSI, Megaworld, Filinvest, Vista Land and others in the news, which firms are the low-profile hidden champions of Philippine business? What lessons can we learn from their unheralded successes?

Hidden Champions: Lessons from 500 of the World’s Best Unknown Companies by Dr. Hermann Simon is an interesting book by a German management expert that reveals the strategies of numerous low-profile yet world-class companies (many of which are German). Most are family-owned, privately held small- and medium-sized enterprises (SMEs). Some grew to become giants. They are focused on their niches, offer the best services, are international in mindset, avoid outsourcing, diversification and strategic alliances. 

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After talking to many businesspeople, here are some companies that I believe are the “hidden champions” of the Philippines  low-profile but very successful (in no particular order):

Ramcar Group  Former banker Manny Agustines and son Mauro lead the biggest manufacturer of batteries in the Philippines (Oriental and Motolite brands). Their sales every year reportedly reach about P30 billion, with their chain of 220 KFC fast-food restaurants alone generating an estimated P10 billion in annual sales. They also own the Tokyo Tokyo resto chain and Mister Donut. This writer heard that they recently bought 60 KFC fast-food restaurants in Canada. A few years ago they faced a crisis, but survived with more strength.

 Waltermart  This sister company of appliance chain Abenson is a dynamic retail chain that can become a major shopping-mall chain, starting mostly on the outskirts and provinces. It reminds me of publicly listed Puregold due to its nonstop growth.

 Gardenia Bakeries (Philippines), Inc.  Led by its dynamic general manager Simplicio “Jun” Umali Jr. since 1999, Gardenia has grown to become the Philippines’ biggest bakery business. Annual sales have soared from P175 million in 1998 to P3 billion in 2011. Its state-of-the-art factory in Laguna is open to the public and students for plant tours.  

 Peerless Products Manufacturing Corp./Champion detergents  James “Jim” Lafferty, British American Tobacco (BAT) general manager and Business Life writer, told me that when he was president of the multinational giant Procter & Gamble (P&G) Philippines a few years ago, he once met Champion detergent boss Simeon Tiu. Lafferty shook Tiu’s hand and congratulated him on making his homegrown Philippine brand Champion the market leader in the bareta or detergent-bar segment. By the way, despite being in the cigarette business, Lafferty supports the government’s push for higher “sin taxes” across the board, which will raise an additional P30 billion in taxes and make cigarettes more expensive  thus hopefully beyond the reach of young people.

Monde Nissin/Lucky Me! noodles  A competitor of Monde Nissin told me that Lucky Me! became No. 1 in instant noodles with one innovation, when it came out with the popular pancit canton or dry noodles in instant form and affordable pouches. Monde Nissin has also bought the famous institution M.Y. San biscuit business.

 Southeast Asia Foods, Inc. (SAFI)/Heinz UFC Philippines, Inc./Nutri-Asia, Inc.  Joselito “Butch” Dee Campos Jr. leads these businesses as the undisputed “Condiments King.” Their popular brands are Datu Puti, Jufran, Mafran, Mang Tomas, Papa, UFC, Heinz and others.

 Greenfield Development Corp.  This low-profile and successful firm has one of the country’s biggest land banks among Philippine developers. Greenfield is led by Jeffrey Dee Campos, son of the late self-made industrialist Jose Yao Campos.

 Roxas Group  A top industrialist told me that this group’s publicly listed Roxas Holdings, Inc. is the Philippines’ second biggest sugar refiner next to Victoria Milling (which is now controlled by Tanduay/PNB taipan Lucio C. Tan). Led by Pedro E. Roxas as CEO, the Roxas Group is also into real estate and owns vast haciendas in Nasugbu, Batangas. The Roxases are one of the oldest Hispanic clans in Philippine business, cousins of the Zobel-Ayalas and Sorianos. Paseo de Roxas near Ayala Avenue in Makati City is named after this family.

 Pan de Manila  A top entrepreneur told me that the fast-growing 24-hour bakery chain Pan de Manila already has about 150 outlets, all company-owned. This low-profile business has quietly grown into a billion-peso company.

Property Company of Friends, Inc. (Pro-Friends)  A rival realty tycoon told me that the low-profile Pro-Friends has grown into a P10 billion-a-year developer; it has focused on low- and middle-income markets south of Metro Manila since 1999. 

Moldex Group  Founded by “rags-to-riches” industrialist Jacinto Uy as a plastic pipe manufacturer, Moldex has also grown into a major realty developer with its Metrogate subdivisions and luxury high-rise condominiums like the 57-story 1322 Golden Empire Tower on Roxas Boulevard, Manila.

Rockwell Land Corp.  Controlled by the Lopez clan and led by former top investment banker Nestor Padilla, Rockwell has carved a niche as a high-end developer with its mixed-use project Rockwell Center and Power Plant Mall. It was the late Eugenio “Geny” Lopez Jr. who invited Padilla to leave Indonesia’s multi-billion-dollar Lippo conglomerate and lead Rockwell. The company is now expanding its realty projects to different parts of Metro Manila and will also go into affordable housing by the end of this year. It recently became a publicly listed firm.

168 Mall  Despite being low-key in terms of advertising and not expanding to other places, this popular shopping mall complex has expanded in recent years by purchasing in 2008 the century-old former sawmill of the pre-war “Lumber King” Dee C. Chuan. It has also developed condominium towers. It is perhaps the country’s most successful mall in terms of per-capita rental income and volume of shoppers.

Crissa Jeans  Leading women’s jeans brand Crissa Jeans is a local Philippine firm, popular with young people. It is a homegrown brand like Bench.

Lucerne  The country’s leading group of watch retail shops doesn’t only distribute high-end brands, but also trendy, affordable watches.

Pacific Paint (Boysen), Inc.  This biggest paint manufacturer in the Philippines was also ranked in 2010 as the world’s 51st largest paint company.

Charter Chemical & Coating Corp./Davies Paints  Despite being a young company organized in 1982, this firm has grown steadily in its quest to challenge traditional and strong market leader Boysen Paints.

Bounty Fresh Chicken/Chooks to Go  The leading producer of chickens, Bounty Fresh Group only established its roasted chicken retail business Chooks to Go in 2008, but now has over 1,000 branches nationwide and is the biggest in the Philippines. Chooks to Go outlets are all company-owned and the chain sells over 100 million chickens every year.

Kopiko  Sterling Paper’s Henry Lim Bon Liong told me that he heard Kopiko’s annual sales volume has reached P25 billion  a phenomenal success.

Ever Bilena  Affordable cosmetics and fragrances sold through retail shops or direct selling, this business was founded by self-made entrepreneur Dioceldo Sy.

GiBi shoes  This top footwear brand is owned by Marikina’s self-made Chinese community leader and philanthropist William Castro. He also distributes America’s Florsheim shoes for children.

Profood International Corp.  Humble, self-made entrepreneur Justin Uy of Cebu is the “Mango King” of the Philippines. Established in 1980, his firm Profood exported 8,000 tons of dried mangoes last year. He now manufactures products from 15 tropical fruits. He is also part owner of the Imperial Palace Waterpark Resort & Spa.

Fern C  Led by young entrepreneur Tommanny Tan, this vitamin C marketing firm started out in 2003 with only six employees, a single product and a small room. It is now a billion-peso business. 

Asialink Finance Corp.  Established in 1997 and led by young entrepreneur Ruben Y. Lugtu, Asialink has grown to become a leading consumer finance business with 93 branches nationwide.

LICA Group/Rapide/Luzon Development Bank  Started in 1997 by the Limcaoco family, which also owns Calabarzon-focused Luzon Development Bank, the Philippines’ leading auto service repair chain Rapide today has 50 shops nationwide. It accepts franchising. LICA Group also owns Somerset Olympia in Makati. 

Rose Pharmacy  This drugstore chain was established in Cebu in 1952 and today has 183 branches all over the Philippines.

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