More hidden champions of Philippine business

It seems that in the business arena, if you cannot become the No. 1 champion, it is still immensely profitable and worthwhile to keep fighting as a good No. 2 or dynamic upstart challenger. Often, the challenger breaks up a monopoly or near-monopoly situation.

In the past, our series on the “hidden champions” of Philippine business has gotten a lot of good feedback. Here are more successful, low-key and below-the-radar business enterprises:

• Mighty Corporation, the upstart challenger to Philip Morris Fortune Tobacco – Mighty Corporation is the Philippines’ second biggest cigarette manufacturer, steadily growing its market share to almost 25 percent of the huge domestic cigarette market of 100 billion sticks per year, according to Paul Riley, president of PMFTC, Inc. or the joint venture of American multinational Philip Morris and philanthropist Lucio Tan’s industry leader, Fortune Tobacco.

While Mighty Corp. claims that its success was achieved due to “more efficient distribution and better marketing efforts,” Riley told me that he disagrees. Quoting “key findings in the Senate Tax Study and Research Office (STSRO) confirms its long-held suspicion on Mighty Corporation’s business practices that may have adversely impacted government revenues.” He accused Mighty of gaining market share from five to over 20 percent  due to alleged “systemic and endemic fraud” via tax evasion and smuggling. Riley estimates that P10 billion in taxes are uncollected from their competitor per year. He asks how come Mighty’s share in excise taxes to the government is only 14.1 percent from January to June 2014?

It is ironic that it is under the administration of Marlboro menthol smoker President Noynoy C. Aquino that his government has pushed “sin taxes” on cigarettes to unprecedented levels, but both big bosses of PMFTC, Inc. Riley and chairman Lucio Tan, are very disciplined health buffs who exercise daily and never smoke, but whose company paid a staggering P73 billion in taxes in 2013.

I explained to Riley that Tan learned the tobacco trade when he was a high school working student at the now defunct Bataan Cigar & Cigarette Factory on Roosevelt Avenue, Quezon City, where his late dad used to work, too.

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The 49-year-old Riley not only doesn’t smoke, he also runs six to seven kilometers every morning before breakfast and goes to the office at 7 a.m. daily. He vowed “to be relentless” in helping government stop massive tax evasion. Sources told me that Riley even walks to his office in Makati often, or sometimes rides the jeepney, despite being one of the highest-paid and accomplished corporate expats in the Philippines.

• La Filipina Uygongco Corporation, whose “corn rice” innovation might save us from being the world’s No. 1 rice importer.

Another hidden champion of Philippine business is one of the country’s most honest and biggest corporate taxpayers, the La Filipina Uygongco Corporation led by philanthropist, Iloilo-bred Dr. Alfonso Uy. He also built up the country’s second biggest flourmill enterprise, the Philippine Foremost Milling Corp.

Since the Philippines is the world’s biggest importer of rice, his firm has come up with the Rico brand of “corn rice” made from 100-percent Philippine-grown corn fortified with iron and calcium. It tastes just like regular rice but provides the nutrition and health benefits of corn. Can this innovation help ease the need for huge Philippine rice imports every year?

His executives say that each grain is naturally rich in antioxidants and vitamin A as well as beta-carotene and lutein for good eyesight. As a complex carbohydrate, corn provides sustained energy. Corn is known for its high fiber content, has no cholesterol and has a lower glycemic index for controlled and balanced blood sugar.

Unlike most of his peers who enjoyed good school lives, Uy had to be a working student. His work frequently made him absent from class and delayed his graduation by a few years, but Uy overcame, graduated with the highest academic honors and became an engineering board topnotch-er. He is now honorary president of the Federation of Filipino-Chinese Chambers of Commerce & Industry, Inc. (FFCCCII), and a top donor of public school buildings for poor rural areas under the FCCCII’s “Operation Barrio Schools” civic project.

• San Marino canned tuna is the upstart challenger to leader Century Tuna. Another “hidden champion” of Philippine business is 39-year-old Foodsphere, Inc. based in Valenzuela City, established by founder and vice chairman, nutrionist Corazon D. Ong, the person whose initials CDO have also become the firm’s popular brand for hotdogs, tocino, bacon and corned beef.

Apart from its success in processed meat products, five years ago Foodsphere, Inc. started to produce corned tuna under its San Marino brand with celebrities Marian Rivera and her boyfriend, Dingdong Dantes, as endorsers. This year, their new San Marino celebrity endorser is half-Japanese, half-Brazilian model Daniel Matsunaga, who was a former boyfriend of actress Heart Evangelista.

San Marino Tuna Flakes category brand manager Pilar Rosa R. de Guzman revealed that the Philippine market for canned tuna is P7 billion per year, and that San Marino has already steadily gained 19 percent of the market in only five years due mainly to product innovations and dynamic marketing efforts. The industry leader in canned tuna is publicly listed Century Tuna, founded by the humble and industrious self-made industrialist Ricardo Po Sr., who used to work for a local Chinese-language newspaper in his youth. 

De Guzman said that the average per-capita canned tuna consumption of Filipinos is only three cans or half a kilo per person — half of the per-capita consumption in Japan. She foresees robust growth for this industry.

• If AgriNurture’s Tony Tiu can overcome controversy, his companies can really tap the Philippines’ vast agricultural potential. Lots of people in media and on social media have asked me whether headline-grabbing young agriculture entrepreneur Antonio “Tony” Lee Tiu of AgriNurture, Inc. (ANI) is related to the Tiu family which owns the Discovery hotel group. No, they are totally unrelated, in the same way that not all Lees, Santoses or Gomezes are related.

I told DZMM radio host Anthony Taberna that I personally know Tony Tiu. He is a self-made man whose father died young, an Australian-educated finance whiz who is soft-spoken and very disciplined. He is a vegetarian, and I wonder whether it is his diet or Buddhist faith that has given him such a remarkable, calm demeanor amid the alleged “Binay hacienda” scandal in our political headlines now. Tiu not only speaks English and Tagalog, but also perfect Hokkien and Mandarin as well. If he can overcome this ongoing political controversy that has involved his companies and if he can really tap the Philippines’ vast agricultural potential, then his firms can someday qualify to become champions (they are no longer hidden) of Philippine business.

If I were Tiu, I’d seize upon all this news buzz about that sprawling farm in Rosario, Batangas, to turn it quickly into a cash-generating agricultural tourism enterprise. This is one segment of the tourism business that I urge our entrepreneurs, farmers, landowners and government people to consider: transforming our diverse farms nationwide into agri-tourism resorts for international and local tourists.

Not to be confused with self-made entrepreneur Tony Tiu, the Tiu family of the Discovery hotel chain is now led by the children of the late self-made steel trader and hardware entrepreneur John Tiu Ka Cho, whose own father was an intellectual and respected Chinese-language educator steeped in Confucian values. 

The talented Tiu Ka Cho built his fortune as a savvy trader and boss of Manila Chinatown’s Union Hardware. His family’s JTKC Group now owns the Discovery Leisure Company, the Mansion Group, publicly listed TKC Steel, JTKC Land, Inc., Kent floor tiles, Sterling Bank of Asia and iRemit.

A more famous member of this humble and hardworking family is Tiu Ka Cho’s grandson, basketball athlete Chris Tiu, whose father Jerry Tiu also years ago bought control of the Mega Publishing Group, now rebranded as the One Mega Group. Chris is himself an entrepreneur and a positive role model for the youth, especially for the children and grandkids of top business families on how to stay humble despite wealth and success.

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