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YOUNG TYCOON EYES ASIA

0 Comments 08 January 2011

YOUNG TYCOON EYES ASIA

By Cecil Morella

MANILA – Armed with a fast-growing fleet of planes and enough junk food snacks to feed entire armies, Philippine tycoon Lance Gokongwei is striding out confidently in the world’s most populous region.

Best known as the boss of budget carrier Cebu Pacific, the 43-year-old also leads a vast conglomerate that is involved in an array of ventures, with one claiming the title of the biggest consumer food business in Southeast Asia.

Thrust by his rags-to-riches father to lead the family-owned businesses in 2002, the US-educated Gokongwei said the group had worked feverishly to diversify and become a big player across a range of markets throughout Asia.

“I think any family business has to adapt because things are so much more competitive now,” the reserved, soft-spoken father-of-two told AFP in a recent interview at his office in a Manila high-rise tower owned by the family.

“Our job, really, is to push our international business.”

The airline and its trans-Southeast Asian branded food manufacturing business, Universal Robina Corp., are the two biggest moneymakers of the listed family conglomerate JG Summit Inc., capitalized at about $3 billion.

But it also has interests in real estate and hotels, retailing, telecommunications, petrochemicals and banking in the Philippines.

On the food side, the company each year sells $1.15 billion worth of wafers, potato chips, tea, cereals and chocolates in Hong Kong, Indonesia, Malaysia, the Philippines, Singapore, Thailand, Vietnam and China.

The food business, which calls itself the Philippines’ first multinational, has struggled in China but succeeded elsewhere and has little debt, said April Tan, research chief with stock brokers Citisecurities Inc.

With nearly half of its profits coming from outside of the Philippines, the company’s efforts to broaden its base are paying handsome dividends, according to Tan.

“If you’re catering to a bigger market, the earnings potential is much higher,” Tan told AFP.

Cebu Pacific, the no-frills carrier with dancing flight attendants, has similarly started to spread its wings across Asia after success at home.

When Cebu Pacific began flying in 1996 with the motto, “It’s time everyone flies,” few Filipinos could afford to traverse the archipelago by air and hundreds were dying every year in alarmingly frequent ferry disasters.

It has since become the country’s biggest airline in terms of the number of domestic passengers — eclipsing national carrier Philippine Airlines.

“With Cebu Pacific, it’s quite clear that they’re capturing the bulk of the market and obviously, they are the fastest-growing carrier in the country,” Tan said.

The airline boasts a young fleet of 32 planes and serves 50 domestic and 23 regional routes. Profits are surging and it is set to bulk up with 24 new planes due for delivery over the next 14 months.

Gokongwei said the entry of other low-cost carriers in the Philippines since the Cebu Pacific success showed the huge potential pent-up demand in a country of 95 million people, 10 percent of whom work on short-term jobs abroad.

Gokongwei company shares surged last year ahead of the airline’s listing, turning the family into the country’s third richest and putting it on Forbes magazine’s billionaires’ list, its worth estimated at $1.5 billion.

A fitness nut who ran the New York Marathon last year, Gokongwei said that at times he and his father, John, a Chinese immigrant who remains the group’s largest shareholder, disagree on which countries or businesses to invest in.

In the end though, the old man, who made his name as a risk-taker, gets his way.

“I’m a working man. I’m working for him,” said the son, who went to business school at the University of Pennsylvania.

However the son proved his management mettle by reviving the young airline after one of its planes flew into a Philippine mountain killing all 104 people aboard in early 1998, according to Manila businessman Antonio Ramon Ongsiako.

“Lance is well regarded and has a reputation of being a better, more refined version of his father,” Ongsiako, a former director of the Financial Executives of the Philippines, told AFP.

“Lance will take JG Summit to a bigger and better future.” (Agence-France Presse)

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