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http://supersiopau.multiply.com/journal/item/33/A_very_inspiring_speech_from_someone_who_made_it_medyo_mahaba_langJohn Gokongwei , Jr.
Ad Congress Speech
Nov 21, 2007
Before I begin, I want to say please bear with me, an 81-year-old
man who just flew in from San Francisco 36 hours ago and is still
suffering from jet lag. However, I hope I will be able to say what
you want to hear.
Ladies and gentlemen, good evening. Thank you very much for having
me here tonight to open the Ad Congress. I know how important this
event is for our marketing and advertising colleagues. My people
get very excited and go into a panic, every other year, at this
time.
I would like to talk about my life, entrepreneurship, and
globalization. I would like to talk about how we can become a great
nation.
You may wonder how one is connected to the other, but I promise
that, as there is truth in advertising, the connection will come.
Let me begin with a story I have told many times. My own.
I was born to a rich Chinese-Filipino family. I spent my childhood
in Cebu where my father owned a chain of movie houses, including
the first air-conditioned one outside Manila . I was the eldest of
six children and lived in a big house in Cebu 's Forbes Park .
A chauffeur drove me to school everyday as I went to San Carlos
University , then and still one of the country's top schools. I
topped my classes and had many friends. I would bring them to watch
movies for free at my father's movie houses.
When I was 13, my father died suddenly of complications due to
typhoid. Everything I enjoyed vanished instantly. My father's empire
was built on credit. When he died, we lost everything-our big
house, our cars, our business-to the banks.
I felt angry at the world for taking away my father, and for taking
away all that I enjoyed before. When the free movies disappeared, I
also lost half my friends. On the day I had to walk two miles to
school for the very first time, I cried to my mother, a widow at
32. But she said: "You should feel lucky. Some people have no shoes
to walk to school. What can you do? Your father died with 10
centavos in his pocket."
So, what can I do? I worked.
My mother sent my siblings to China where living standards were
lower. She and I stayed in Cebu to work, and we sent them money
regularly. My mother sold her jewelry. When that ran out, we sold
roasted peanuts in the backyard of our much-smaller home. When that
wasn't enough, I opened a small stall in a palengke. I chose one
among several palengkes a few miles outside the city because there
were fewer goods available for the people there. I woke up at five
o'clock every morning for the long bicycle ride to the palengke
with my basket of goods.
There, I set up a table about three feet by two feet in size. I
laid out my goods-soap, candles, and thread-and kept selling until
everything was bought. Why these goods? Because these were hard
times and this was a poor village, so people wanted and needed the
basics-soap to keep them clean, candles to light the night, and
thread to sew their clothes.
I was surrounded by other vendors, all of them much older. Many of
them could be my grandparents. And they knew the ways of the
palengke far more than a boy of 15, especially one who had never
worked before.
But being young had its advantages. I did not tire as easily, and I
moved more quickly. I was also more aggressive. After each day, I
would make about 20 pesos in profit! There was enough to feed my
siblings and still enough to pour back into the business. The pesos
I made in the palengke were the pesos that went into building the
business I have today.
After this experience, I told myself, "If I can compete with people
so much older than me, if I can support my whole family at 15, I
can do anything!"
Looking back, I wonder, what would have happened if my father had
not left my family with nothing? Would I have become the man I am?
Who knows?
The important thing to know is that life will always deal us a few
bad cards. But we have to play those cards the best we can. And WE
can play to win!
This was one lesson I picked up when I was a teenager. It has been
my guiding principle ever since. And I have had 66 years to practice
self-determination. When I wanted something, the best person to
depend on was myself.
And so I continued to work. In 1943, I expanded and began trading
goods between Cebu and Manila . From Cebu , I would transport tires
on a small boat called a batel. After traveling for five days to
Lucena, I would load them into a truck for the six- hour trip to
Manila . I would end up sitting on top of my goods so they would
not be stolen! In Manila , I would then purchase other goods from
the earnings I made from the tires, to sell in Cebu .
Then, when WWII ended, I saw the opportunity for trading goods in
post-war Philippines . I was 20 years old. With my brother Henry, I
put up Amasia Trading which imported onions, flour, used clothing,
old newspapers and magazines, and fruits from the United States . In
1948, my mother and I got my siblings back from China . I also
converted a two-story building in Cebu to se rv e as our home,
office, and warehouse all at the same time. The whole family began
helping out with the business.
In 1957, at age 31, I spotted an opportunity in corn-starch
manufacturing. But I was going to compete with Ludo and Luym, the
richest group in Cebu and the biggest cornstarch manufacturers. I
borrowed money to finance the project. The first bank I approached
made me wait for two hours, only to refuse my loan. The second one,
China Bank, approved a P500,000-peso clean loan for me. Years later,
the banker who extended that loan, Dr. Albino Sycip said that he saw
something special in me. Today, I still wonder what that was, but I
still thank Dr. Sycip to this day.
Upon launching our first product, Panda corn starch, a price war
ensued. After the smoke cleared, Universal Corn Products was still
left standing. It is the foundation upon which JG Summit Holdings
now stands.
Interestingly, the price war also forced the closure of a third
cornstarch company, and one of their chemists was Lucio Tan, who
always kids me that I caused him to lose his job. I always reply
that if it were not for me, he will not be one of the richest men in
the Philippines today.
When my business grew, and it was time for me to bring in more
people- my family, the professionals, the consultants, more
employees- I knew that I had to be there to teach them what I knew.
When dad died at age 34, he did not leave a succession plan. From
that, I learned that one must teach people to take over a business
at any time. The values of hard work that I learned from my father,
I taught to my children. They started doing jobs here and there even
when they were still in high school. Six years ago, I announced my
retirement and handed the reins to my youngest brother James and
only son Lance. But my children tease me because I still go to the
office every day and make myself useful. I just hired my first
Executive Assistant and moved into a bigger and nicer office.
Building a business to the size of JG Summit was not easy. Many
challenges were thrown my way. I could have walked away from them,
keeping the business small, but safe. Instead, I chose to fight. But
this did not mean I won each time.
By 1976, at age 50, we had built significant businesses in food
products anchored by a branded coffee called Blend 45, and agro-
industrial products under the Robina Farms brand. That year, I faced
one of my biggest challenges, and lost. And my loss was highly
publicized, too. But I still believe that this was one of my
defining moments.
In that decade, not many business opportunities were available due
to the political and economic environment. Many Filipinos were
already sending their money out of the country. As a Filipino, I
felt that our money must be invested here. I decided to purchase
shares in San Miguel, then one of the Philippines ' biggest
corporations. By 1976, I had acquired enough shares to sit on its
board.
The media called me an upstart. "Who is Gokongwei and why is he
doing all those terrible things to San Miguel?" ran one headline of
the day. In another article, I was described as a pygmy going up
against the powers-that- be. The San Miguel board of directors
itself even aid for an ad in all the country's top newspapers
telling the public why I should not be on the board. On the day of
reckoning, shareholders quickly filled up the auditorium to witness
the battle. My brother James and I had prepared for many hours for
this debate. We were ne rv ous and excited at the same time.
In the end, I did not get the board seat because of the Supreme
Court Ruling. But I was able to prove to others-and to myself-that I
was willing to put up a fight. I succeeded because I overcame my
fear, and tried. I believe this battle helped define who I am
today. In a twist to this story, I was invited to sit on the board
of Anscor and San Miguel Hong Kong 5 years later. Lose some, win
some.
Since then, I've become known as a serious player in the business
world, but the challenges haven't stopped coming.
Let me tell you about the three most recent challenges. In all
three, conventional wisdom bet against us. See, we set up businesses
against market Goliaths in very high-capital industries: airline,
telecoms, and beverage.
Challenge No. 1: In 1996, we decided to start an airline. At the
time, the dominant airline in the country was PAL, and if you wanted
to travel cheaply, you did not fly. You went by sea or by land.
However, my son Lance and I had a vision for Cebu Pacific: We wanted
every Filipino to fly.
Inspired by the low-cost carrier models in the United States , we
believed that an airline based on the no-frills concept would work
here. No hot meals. No newspaper. Mono-class seating. Operating with
a single aircraft type. Faster turn around time. It all worked,
thus enabling Cebu Pacific to pass on savings to the consumer.
How did we do this? By sticking to our philosophy of "low cost,
great value."
And we stick to that philosophy to this day. Cebu Pacific offers
incentives. Customers can avail themselves of a tiered pricing
scheme, with promotional seats for as low a P1. The earlier you
book, the cheaper your ticket.
Cebu Pacific also made it convenient for passengers by making online
booking available. This year, 1.25 million flights will be booked
through our website. This reduced our distribution costs
dramatically.
Low cost. Great value.
When we started 11 years ago, Cebu Pacific flew only 360,000
passengers, with 24 daily flights to 3 destinations. This year, we
expect to fly more than five million passengers, with over 120 daily
flights to 20 local destinations and 12 Asian cities. Today, we are
the largest in terms of domestic flights, routes and destinations.
We also have the youngest fleet in the region after acquiring new
Airbus 319s and 320s. In January, new ATR planes will arrive. These
are smaller planes that can land on smaller air strips like those
in Palawan and Caticlan. Now you don't have to take a two-hour ride
by mini-bus to get to the beach.
Largely because of Cebu Pacific, the average Filipino can now
afford to fly. In 2005, 1 out of 12 Filipinos flew within a year.
In 2012, by continuing to offer low fares, we hope to reduce that
ratio to 1 out of 6. We want to see more and more Filipinos see
their country and the world!
Challenge No. 2: In 2003, we established Digitel Mobile Philippines,
Inc. and developed a brand for the mobile phone business called Sun
Cellular. Prior to the launch of the brand, we were actually
involved in a transaction to purchase PLDT shares of the majority
shareholder.
The question in everyone's mind was how we could measure up to the
two telecom giants. They were entrenched and we were late by eight
years! PLDT held the landline monopoly for quite a while, and was
first in the mobile phone industry. Globe was a younger company,
but it launched digital mobile technology here.
But being a late player had its advantages. We could now build our
platform from a broader perspective. We worked with more advanced
technologies and intelligent systems not available ten years ago. We
chose our suppliers based on the most cost-efficient hardware and
software. Being a Johnny-come- lately allowed us to create and
launch more innovative products, more quickly.
All these provided us with the opportunity to give the consumers a
choice that would rock their world. The concept was simple. We would
offer Filipinos to call and text as much as they want for a fixed
monthly fee. For P250 a month, they could get in touch with anyone
within the Sun network at any time. This means great savings of as
much as 2/3 of their regular phone bill! Suddenly, we gained
traction. Within one year of its introduction, Sun hit one million
customers.
Once again, the paradigm shifts - this time in the telecom
industry. Sun's 24/7 Call and Text unlimited changed the landscape
of mobile- phone usage.
Today, we have over 4 million subscribers and 2000 cell sites
around the archipelago. In a country where 97% of the market is pre-
paid, we believe we have hit on the right strategy.
Sun Cellular is a Johnny-come- lately, but it's doing all right. It
is a third player, but a significant one, in an industry where
Cassandras believed a third player would perish. And as we have done
in the realm of air travel, so have we done in the telecom world: We
have changed the marketplace.
In the end, it is all about making life better for the consumer by
giving them choices.
Challenge No. 3: In 2004, we launched C2, the green tea drink that
would change the face of the local beverage industry -- then, a
playground of cola companies. Iced tea was just a sugary brown
drink se rv ed bottomless in restaurants. For many years, hardly was
there any significant product innovation in the beverage business.
Admittedly, we had little experience in this area. Universal Robina
Corporation is the leader in snack foods but our only background in
beverage was instant coffee. Moreover, we would be entering the
playground of huge multinationals. We decided to play anyway.
It all began when I was in China in 2003 and noticed the immense
popularity of bottled iced tea. I thought that this product would
have huge potential here. We knew that the Philippines was not a
traditional tea-drinking country since more familiar to consumers
were colas in returnable glass bottles. But precisely, this made the
market ready for a different kind of beverage. One that refreshes
yet gives the health benefits of green tea. We positioned it as
a "spa" in a bottle. A drink that cools and cleans.thus, C2 was
born.
C2 immediately caught on with consumers. When we launched C2 in
2004, we sold 100,000 bottles in the first month. Three years
later, Filipinos drink around 30 million bottles of C2 per month.
Indeed, C2 is in a good place.
With Cebu Pacific, Sun Cellular, and C2, the JG Summit team took
control of its destiny. And we did so in industries where old giants
had set the rules of the game. It's not that we did not fear the
giants. We knew we could have been crushed at the word go. So we
just made sure we came prepared with great products and great
strategies. We ended up changing the rules of the game instead.
There goes the principle of self-determination, again. I tell you,
it works for individuals as it does for companies. And as I firmly
believe, it works for nations.
I have always wondered, like many of us, why we Filipinos have not
lived up to our potential. We have proven we can. Manny Pacquiao and
Efren Bata Reyes in sports. Lea Salonga and the UP Madrigal Singers
in performing arts. Monique Lhuillier and Rafe Totenco in fashion.
And these are just the names made famous by the media. There are
many more who may not be celebrities but who have gained respect on
the world stage.
But to be a truly great nation, we must also excel as entrepreneurs
before the world. We must create Filipino brands for the global
market place.
If we want to be philosophical, we can say that, with a world-class
brand, we create pride for our nation. If we want to be practical,
we can say that, with brands that succeed in the world, we create
more jobs for our people, right here.
Then, we are able to take part in what's really important-giving our
people a big opportunity to raise their standards of living, giving
them a real chance to improve their lives.
We can do it. Our neighbors have done it. So can we. In the last 54
years, Korea worked hard to rebuild itself after a world war and a
civil war destroyed it. From an agricultural economy in 1945, it
shifted to light industry, consumer products, and heavy industry in
the '80s. At the turn of the 21st century, the Korean government
focused on making Korea the world's leading IT nation. It did this
by grabbing market share in key sectors like semiconductors,
robotics, and biotechnology.
Today, one remarkable Korean brand has made it to the list of Top
100 Global Brands: Samsung. Less then a decade ago, Samsung meant
nothing to consumers. By focusing on quality, design, and
innovation, Samsung improved its products and its image. Today, it
has surpassed the Japanese brand Sony. Now another Korean brand, LG
Collins, is following in the footsteps of Samsung. It has also
broken into the Top 100 Global Brands list.
What about China ? Who would have thought that only 30 years after
opening itself up to a market economy, China would become the
world's fourth largest economy? Goods made in China are still
thought of as cheap. Yet many brands around the world outsource
their manufacturing to this country. China 's own brands-like
Lenovo, Haier, Chery QQ, and Huawei-are fast gaining ground as
well. I have no doubt they will be the next big electronics,
technology and car brands in the world.
Lee Kwan Yu's book "From Third World to First" captures Singapore's
aspiration to join the First World . According to the book,
Singapore was a trading post that the British developed as a nodal
point in its maritime empire. The racial riots there made its
officials determined to build a "multiracial society that would
give equality to all citizens, regardless of race, language or
religion."
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