Tan Yu & Salvador Araneta

In a forthcoming book project on the career of foremost woman corporate executive Nelia Teodoro Gonzalez, she devotes one entire section to her recollections of her two remarkable bosses–self-made real estate tycoon and Asiaworld founder Tan Yu and RFM Group founder Salvador Araneta. She shares with the public rare personal glimpses of two giants in Philippine business, their ways of thinking, their dreams, how they dealt with subordinates, and what made them outstanding in their fields.

Nelia Gonzalez has served for decades as a top corporate official in some of the country’s biggest real estate and agri-business enterprises, a leader in the academe as former Regent of her alma mater University of the Philippines and as top fundraiser for the Ang Bahay ng Alumni. She’s also an officer in numerous civic organizations and charities, and works in the Department of Agriculture, championing the cause of cooperatives.

Apart from having a brilliant father (Nicanor G. Teodoro, who was the first plant pathologist in the Philippines educated in the US [among the early Filipino pensionado scholars sent by the American colonial regime]), Nelia Gonzalez also had the positive influences of her two bosses whose names have become legendary in Philippine business.

Of Paternalism And Martial Law

Both bosses of Nelia Gonzalez were almost unequalled giants in Philippine business during their prime. Tan Yu and Salvador Araneta are similar in their paternalistic attitudes towards the welfare of their employees and diverse enterprises. Although Tan Yu is the son of humble immigrants and Araneta was a son of the wealthy government official Gregorio Araneta, both exemplified strong and visionary leadership – daring to pioneer new ventures and to undertake great risks in pursuit of their dreams. Nelia Gonzalez considers both bosses as her "great teachers."

Tan Yu and Salvador Araneta personified rugged individualism and independent thinking. Coincidentally, both Tan Yu and Salvador Araneta stayed away from the Philippines during the 1970s martial law era, with Tan Yu building a business empire based in Taiwan called Asiaworld, and with Araneta living in self-exile first in America and later in Canada.

Tan Yu: Real Estate Tycoon & Philanthropist

Nelia Gonzalez remembers her first encounter with the fast-rising entrepreneur Tan Yu in the late 1960s, when the businessman visited her office in Pasig. She was then vice president of RFM in charge of agri-business, but she was also entrusted by Salvador Araneta and his wife Victoria to handle the purchasing of feed bags and flour bags. It was actually Doña Victoria who invited her to join RFM. Nelia was then connected with the Araneta Insititute of Agriculture, where her father was dean.

What was her first impression of Tan Yu? Nelia Gonzalez reminisces: "I didn’t know Mr. Tan Yu personally then. He was a supplier of feed bags and flour bags. Even today, few people are aware that his family still operates the country’s biggest flour bag factories. Mabait siya kausap. He was like a regular businessman, perhaps more brilliant in sales and negotiations. He wanted to supply RFM, which was the first flour mill in the Philippines. I think it was also the first flour mill in Southeast Asia. After that first meeting, we would continuously meet afterwards, often having discussions about business and he once mentioned that he owns many properties in Tanay, Rizal. His friend, Bureau of Internal Revenue’s (BIR) Vera, also owns lands there. I then told Tan Yu that RFM was trying to look for a site for a poultry farm which I had been tasked to set up. He said that some of his landholdings may be ideal for the project. I inquired if he had 20 hectares available, and Tan Yu replied that he did. I then went to discuss this proposal with my bosses."

How was Tan Yu as a trader? Gonzalez remembers: "Business genius si Mr. Tan Yu. Most people today know him only as a real estate billionaire and financier, as owner of Taiwan’s biggest hotel complex and once ranked by Forbes magazine as the world’s 10th wealthiest billionaire, but not many people know that he was also an industrialist and talented trader. In my early dealings with him, I realized na magaling siya in terms of pricing. I would often call for a bid, and he usually ended up winning them. I then introduced him to Jose Concepcion Jr., an Araneta son-in-law who would later rise to become the future chief executive of RFM."

What are the interesting facets of the Tan Yu personality? Nelia Gonzalez says: "Tan Yu is perhaps the first Filipino billionaire to create a multinational conglomerate overseas, the Asiaworld Internationale Group, with headquarters in Taiwan, but diverse investments also in America, Hong Kong, China, Canada and other places. But Tan Yu never changed his Filipino citizenship and he never forgot the Philippines – even while he was away for so many years starting during the 1970s martial law era. After the 1986 Edsa revolution, he immediately remitted huge amounts of money to the Philippines in support of our democracy. In fact, he won the public bid for the Marina property fronting the Manila Bay, in a record real estate purchase that was then the largest transaction of its kind in modern Philippine history. His favorite number is seven. He also reads a lot of books and is an expert about Chinese history and philosophy. He is also well-known throughout the Asia Pacific region, among business taipans, top bankers and political leaders. He is a friend to all Philippine Presidents, from Macapagal, Marcos, Aquino, Ramos, Estrada to Arroyo. Among his close friends in the past was the late Senator Ninoy Aquino, as well as many others."

Nelia Gonzalez adds: "Tan Yu is an extraordinary self-made man who never forgets the teachings of his late mother Doña King Pao Guat Typoco. She taught him to be generous in philanthropy, so in his prime, Tan Yu was giving away college scholarships to hundreds and thousands of poor Filipino students every year, mostly poor young people from the rural provinces, because he himself grew up in Camarines Norte province in Bicol. I was personally involved in his scholarship program, which was at one time the biggest of its kind in the whole country. He also established a foundation in the name of his late mother which provided support to numerous schools, hospitals and other civic endeavors. He often quoted an ancient Chinese proverb taught by his late mother, ‘From the society, for the society.’ Tan Yu is a great boss, because I learned many valuable lessons about business, philanthropy, entrepreneurship, marketing, real estate and hard work from this unique business leader. Tan Yu is also a fine example of a filial son to his mother, and he has also donated to many Chinese community charities and schools in honor of his late mother. I also respect him for providing college scholarship grants to thousands of poor Filipino youths in the provinces. He has not been in the best of health in recent years and has been quiet from the scene, but to me Mr. Tan Yu will always be a great teacher, a good boss and a true friend."

In a rare interview in the past, Tan Yu had on several occasions told this writer that Nelia Gonzalez is a trustworthy and very talented corporate leader in his various business and philanthropic endeavors. He said that he has always regarded Nelia Gonzalez with high esteem, and considered her more as a peer and adviser than as an employee. He said that he is very careful in assessing the integrity, character and capabilities of executives who work for him, and the success of Nelia Gonzalez in her professional, civic and family lives have proven him right in his high regard for this woman leader. Tan Yu said that he, his wife and children look upon Nelia Gonzalez as a member of their family.

Salvador Araneta: Industrial Pioneer & Paragon Of Integrity

How was Salvador Araneta as a boss? Nelia Gonzalez recalls: "The late Don Salvador? I liked him very much. You cannot work with him if you are not quick to understand, he’s just too brilliant. He used to say that when he went to Harvard in 1922, he thought he was already brilliant, but in that school, he felt he was lost in a sea of brilliant people, but he was also confident he could do well in that environment...Mr. Araneta, once he trusted you, he would make you general manager of an enterprise. As vice president for agri-business, I had full power in management. Of course, there were regular approvals from the board of directors. His people should always be ready for his questions. In the mornings, there were instances when he would come to my house in Malabon and personally bring fresh milk from his Haccarin farms in Bulacan and give to my children. His house was not far, so he would come in his car. He was a very good boss."

We heard that there was a big public scandal about a government agency, where she and Salvador Araneta were exposing corruption. Nelia Gonzalez recounts: "As a matter of fact, that was one of the most memorable moments of my life, when we were embroiled in the Namarco case. I felt like what Equitable Bank executive Clarissa Ocampo felt during the December 2000 impeachment trial. We were then importing soybeans from the US, but there were lopsided tariffs. Mataas sobra ang tariffs compared to the raw materials. This was sometime in the 1960s. At that time, Don Salvador Araneta brought into the country a totally new industry which extracts oil from soybeans, because we import a lot of soya oil and soya meal. We set up an extraction plant that was then servicing the feed industry for soya meal supply. The tariffs for soybeans was higher than the tariffs of the byproducts soya meal and oil, so we had to change this anomalous situation by legislation. It was too high, thus the Philippines would rather continuously import the by-products, than to extract and produce these locally. We were working for the reduction of the tariffs, so what we did then was to import soybeans through the government’s National Marketing Corporation (Namarco), thus in effect providing us tax-free soybean imports. In the process, we paid Namarco a service fee equivalent to 10 percent of the price of soybeans. This service fee was in effect what we would have wanted as tariffs, if we can import directly. The service fee for Namarco was paying for a lot of operational expenses of the state-owned company."

Gonzalez adds: "The problem arose when the corrupt members of the Namarco board of directors entered the picture, stopping the importations of soybeans. Of course, nagalit na si Don Salvador, because we already had an extraction plant there. We went public to expose this corruption. The head of the Senate Blue Ribbon Committee was then Senator Jovito Salonga. Mr. Araneta said that the soybean importations were good for the country, that he was willing for RFM to be investigated. At that time, I received many ominous threats. I was answering questions about the whole operation, which exposed the corrupt Namarco officials. Every day, we were in the newspaper headlines, it became a bitter political fight. Senator Salonga was then with the Liberal Party. Then Senator Ferdinand Marcos was with the Nacionalista Party and he abolished the graft-ridden Namarco. I received many congratulatory messages sent by people from all walks of life. It was a rare privilege for me and Don Salvador to publicly expose government corruption."

What influence did Salvador Araneta have on her corporate career? Nelia Gonzalez says: "Whenever Araneta called you in the morning about the price of soybean in the world market, you should know the answers. One of my best educations was having worked with Don Salvador Araneta. I learned a lot. He eventually became Secretary of Agriculture under President Marcos, but he did not last long in government because he did not want people to question his public office and private business dealings. I was also head of his Araneta Institute of Agriculture, Products Division. I have a contract with the government’s Bureau of Animal Industry to supply Lyophillized vaccines which we imported through an Araneta-owned company. The contract was finished and we already had the lyophillizing machine, when suddenly President Marcos appointed him Secretary of Agriculture. I immediately approached Don Araneta to inform him that we already had a government contract. You know what he answered me without any hesitation? He said, ‘Nelia, you have to cancel the contract with the government because the Bureau of Animal Industry is under the Department of Agriculture.’ But that was my biggest sale sana... I did a little argumentation, explaining that it was I who negotiated the deal for the company, that I thought it was unfair for the company to suffer this loss. But he was firm in telling me: ‘No, Nelia, the answer is no. Cancel it.’ And we did cancel the whole transaction. That was a project of the biological laboratories of Araneta Intitute of Agriculture, Products Division, that was before RFM pa. This incident strengthened my respect for him even more. Here was a man who would rather lose big money than be suspected of any anomaly. This happened in the early 1960s. Don Salvador was a principled man. He was member of one of the 10 richest families in the country then. He was always sharing, he kept donating to the Ateneo. He was a real pioneer in animal husbandry, in flour milling, soybean extraction, the conversion of molasses to yeast and other projects. His business ventures were more to pioneer industrialization using agriculture. He believed that what agriculture produces should be utilized for industry."

Any other memories of Don Salvador? Nelia Gonzalez laughs: "Always away nang away iyan si Araneta with Montelibano because basically of agriculture. Araneta wanted industry not to kill agriculture, but for the country to use agriculture to supply industry. He wanted maximum utilization of Philippine products. He was also the first president of the Philippine Constitutional Association (Philconsa), of which I am now coincidentally the national treasurer. It is also a coincidence and a unique privilege for me to be working now for an Araneta stamp requested by the Philconsa from the Post Office. He was also head of the country’s National Economic Council. My husband Bobby used to also work for Araneta, he was head of Entymology Department of the Araneta Institute of Agriculture (now the Araneta University). Don Salvador was noble in his ideas, sincere in his concern for the country and for the people."

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