Sid Consunji’s quest to transform more firms into gold

The alchemist

MANILA, Philippines — While flamboyance is not his style, tycoon Isidro “Sid” Consunji also has expensive habits – one of which is the penchant for buying and turning around ailing companies.

More than just a highly respected and successful businessman, the 76-year-old Consunji is a modern-day alchemist of sorts.

“We buy things in a junkyard, we sell it in Tiffany,” Consunji jokingly said during a recent conference organized by the Financial Executives Institute of the Philippines.

Describing himself as “very ambitious,” the chairman of diversified engineering conglomerate DMCI Holdings said that his group’s business mindset is simple: “How can we fix broken corporations?”

“I had figured out that, like Maynilad for instance, when we acquired it, it was negative equity. And then (we thought), what an opportunity. They have the access to Ipo Dam, they have access to 5,000 kilometers of pipeline and they have access to La Mesa Dam. The only thing that you have to do is make sure that it’s managed properly. So of a small equity, but you can manage a very big amount of asset, (it’s) dramatic,” Consunji said.

“If the initial public offering (IPO) pushes through, we’re just computing a few days ago, market value of P120 billion. It’s P120 billion from negative equity 19 years ago,” he added.

In 2007, DMCI, in a joint venture with Metro Pacific Investments Corp., took over Maynilad after wining a competitive bidding. DMCI currently holds 25-percent stake in the IPO-bound water utility firm.

Such was the same case as for Semirara Mining and Power Corp., which was then known as Semirara Coal Corp. when the DMCI group purchased a stake in 1997.

“It was negative equity, we acquired it,” Consunji recalled.

With his appetite for turning corporations around still unsatisfied, Consunji is once again looking to work his magic on Concreat Holdings Philippines Inc., formerly Cemex Holdings Philippines, which his group acquired for $272 million in December last year.

The goal this time around is to make the company profitable in two to three years’ time.

“Cemex (Concreat), we know the problem already. We are creating the solutions. But the solutions will probably happen in the second year. So we expect full recovery on the third year,” Consunji said.

The Consunji Group’s investment portfolio now consists of diversified businesses involved in construction, cement, real estate, coal and nickel mining, power generation and water distribution.

“We try to stay inside our comfort zone. They may look diverse businesses to you, but they are part of the competence that we have in construction. Earthmoving is part of the construction. Mining, essentially 90 percent is earthmoving. Real estate, of course DMCI housing, that’s basically construction,” Consunji said.

“I think when you’re part of the process of developing something, I love all of them in different ways – very different ways,” the tycoon noted when asked if which among his businesses he loves the most.

However, Consunji said that the skills involved in the taking over or turning around a company is very different than the skills involved in growing up the pieces from scratch.

He considers DMCI Homes as the most difficult business they grew to date because it started from zero.

“We had no name, we had no brand, we had a very small balance sheet. But the most difficult one was creating a team from zero,” Consunji said.

Old habits die hard

The eldest son of the late construction magnate David Consunji, he admitted that he was in fact more careful when making business decisions when he was younger, simply because he had less experience.

“When I was younger, there was no second chance. You’re betting your last thing. We were a very small company, and what was given to me by my dad, if I failed, he will never give me another chance to invest,” Consunji said.

According to Consunji, losing focus in his studies during his early days in college also thought him a valuable lesson in life.

“My dad said, if you’re not interested in studying, then quit school for a while, because there’s no point in going through the routine of studying and then you’re not going to learn. So he gave me P6 a day. That was the minimum wage. But I had expensive habits. I was smoking and I enjoyed the Johnny Walker,” he said.

“So I get my salary on a Saturday afternoon, Tuesday night I have no money anymore. Then I figured out, if I don’t go back to work, it would be impossible to earn a lot of money on your own, and I was too proud to be dependent on my parents, so I decided to go back and study,” Consunji added.

With the success of his business ventures, Sid has definitely earned himself enough – and much more – to fund his “expensive habits.”

“My father was a very good engineer and an excellent contractor, and even when I was very young, he was really considered one of the pillars of industry. And I was, I wasn’t very serious about life, easy-go-lucky, barely passing grades are fine. So I figured, I don’t think I’ll be better than him as an engineer. So I decided to be a manager,” he said.

A new meaning to PPP

Over the years, Consunji’s DMCI has been actively involved in various public-private partnership (PPP) projects in the country.

But given the massive corruption scandal crippling flood control and infrastructure projects in the Philippines at present, Sid is hoping to give PPP a new meaning.

“My prayer is PPP – peaceful, prosperous Philippines,” the tycoon said.

“I think if there is too many poor people in the country, I think it’s bound to happen that there will be social unrest,” he added.

Consunji said he is one with the Filipino people in eagerly anticipating what would be the final outcome of the ongoing investigations on the corruption anomalies.

“Of course we don’t want corruption because the country is suffering,” Consunji said. “What we want are those involved to be punished. That should not come without consequences.”