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Entrepreneur at his best

Boo Chanco (The Philippine Star) - March 6, 2017 - 12:00am

JOHANNESBURG, South Africa – Carlos Chan is not as talked about as an entrepreneur back home compared with Tony Tan Caktiong of Jollibee or even the upstart Injap Sia of Mang Inasal and now Double Dragon. That’s because Chan is so low key and prefers to do most of his business abroad.

But among all the Filipino-Chinese taipans, including the big ones like Henry Sy and John Gokongwei, I think none of them had been as daring as Carlos Chan. They all grew big in home turf before some of them started to spread their wings a bit on foreign shores.

Carlos Chan, whose family was behind Liwayway gawgaw of our youth, decided early on that he will take his business acumen abroad.  He is one risk taker who knows when to move into a virgin market and how to stage his investments there.

Mr. Chan has this frontier mentality. He went to China when, in his words, Pudong was nothing but rice fields. He now has 14 factories of his Oishi snacks all over China and half a dozen more all over Southeast Asia, from Myanmar, Vietnam, Cambodia, Indonesia and also in India.

His latest territorial move surprised me most… South Africa. It isn’t just the distance between Manila and Johannesburg but also the risk in putting up a factory producing snacks in a country whose culture is so dramatically different from ours.

The way he tells it, he fell in love with South Africa on his first visit… in love enough to invest in land and factory and a marketing network for his Oishi snacks. It didn’t bother him that the crime rate in Johannesburg is on the high side. Perhaps it makes him feel at home, given that our crime statistics are also nothing to be proud of.

What he saw in South Africa is also what many foreign investors are seeing in the Philippines… a young population with a fast growing middle class... despite obvious risks.

We visited his new factory outside Johannesburg. Construction of that factory was just completed and they are starting to install the machinery that will produce the Oishi snacks.

His engineering design and fabrication team in Imus, Cavite worked on all the major factory machinery and are now putting everything together here. His team of Pinoy expat managers have also started to arrive and are preparing for the factory to start full operations third quarter of this year.  

Always concerned about the living conditions of his staff, he bought three brand new townhouses in a well secured gated development 15 minutes away from the factory. He ordered to buy two more after our visit as he foresees sending more Pinoy executives to run the African business.

Mr. Chan visited South Africa less than two years ago and decided to invest. He explained to me that he sees a young population with a fast growing middle class and the big competitors are not yet here.

The investment was made by Liwayway’s holding company in Hong Kong that controls his overseas businesses. A major HK bank is providing credit support.

What amazes me is how quickly he made the decision to invest. That’s why he told me years ago he was not too keen about going public because that will restrict his ability to act fast to take advantage of opportunities.

He is most likely right about South Africa. It has an economy about the size of ours but half the population.

It has a very good road network, at least the ones we saw in this city and the capital Pretoria. 

Make no mistake, they have economic inclusion problems like we do. But they do a good job of hiding the places where the poor live. I haven’t seen any “squatters” so far. Government builds housing for them in townships away from the thriving urban centers of JoBurg and Pretoria. But the oldest squatter colony in Cape Town can be seen as you drive away from the airport. 

They have high unemployment and like us, a brain drain problem. Because of the growing perceptions of higher quality of life in South Africa, many of its high skilled professionals like lawyers, doctors, engineers and accountants are returning.

Then again, there is this talk about inclusive growth, something we constantly hear back home too. Mr. Pravin Gordhan, the Finance Minister warned of “growing impatience and ferment” over post-apartheid inequality and said: “Economic growth is slow, unemployment is far too high and many businesses and families are under stress.”

Maybe that’s the politician in the finance minister talking. But to an investor like Mr. Chan, he is looking beyond problems and is seeing opportunities. He saw these problems before in China, Myanmar, Vietnam and Cambodia and he saw these economies boom to build profitable businesses for Liwayway.

There are many lessons to learn from South Africa and their drive for foreign investments. Their politics is also very contentious and corruption is a problem. But that isn’t stopping the economy from growing and the young people from creating a middle class that is stabilizing society.

The Indians have been here since forever. The Chinese were more recent but have a thriving business community with active Chambers of Commerce organized by Chinese regions. Mr. Chan is probably the first investor from the Philippines. 

Here as it is back home, let the politicians have fun making all the noise but leave business entrepreneurs alone to make the economy grow and improve the quality of the people’s lives.

Boo Chanco’s  e-mail address is bchanco@gmail.com. Follow him on Twitter @boochanco

CARLOS CHAN
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