MR. JOHN GOKONGWEI, JR. ON THE LAUNCHING OF THE JOHN GOKONGWEI SCHOOL OF MANAGEMENT
March 1, 2002
9.00 am - 12.00 pm
Irwin Theatre, Ateneo de Manila University

Good morning.

I am John Gokongwei, Jr. I am not an Atenean but I feel at home with you. Today, at least. Sixty-two years ago, I could not have dreamt of appearing before the Jesuits and their students to tell the story of MY life. I was no more than a student then, at San Carlos University in Cebu, when my father died suddenly. It left me, the eldest, the responsibility of taking care of my mother and five siblings. That was tough for someone who was 13. Creditors had just seized our home and business and I had no experience with earning a living.

But here I am--not all on account of my good looks or charming personality--but because I somehow survived. And when I look back, I know now that I did so because I recognized change when I saw it.

The first change was war. I had turned 15. My mother had already sent my brothers and sister to China where the cost of living was lower. From Cebu, she and I had to make money to send to them.

I turned to peddling. My day began at 5 in the morning. I would load my bicycle with soap, thread, and candles, and then bike to neighboring towns to sell my goods. On market days, I would rent a stall, lay out the goods from the bike, and make about 20 pesos a day, enough for me to survive and to buy even more goods for next time. Those days, you might call my Bicycle Age.

After two years of biking and peddling, at 17 I entered my Batel Age. The batel was a small very utilitarian boat that defied the open sea and would take me farther from Cebu and all the way to Lucena, from where I would take a truck to Manila, with companions twice or thrice my age. The sea trips could take two to three weeks depending on the weather, and the land trips another five to six hours. (I was lighter then, you can imagine.) On the batel, I read books like "Gone with the Wind" under the great blue sky to pass away the time--even if we traders were always in fear of sea pirates and the bad weather.

Once, our batel hit a rock and sank. Thank heavens for my rubber tires! Those were the goods I had with me to sell in Manila. Well, we all held on to those tires, which meant I saved all those traders and those traders saved all my tires.

At that time, the War was still going on. Ironically, I look back at the War with the fondest of memories. It was the great equalizer. Almost everyone I knew had lost big and small fortunes at the time. This meant we all started at ground zero.

Ground zero. When the war ended, I was 19. Because of the war, the economy was more dependent than ever on imports. So when I set up Amasia, my first company, it was to import textile remnants, fruit, old newspaper, magazines, and used clothing from the U.S.

There was a side benefit to this. I would wear some of my own stock, so I would have different clothes to wear when I went courting Elizabeth, the woman who would be my wife. But at the end of it, I made some money. The Batel Age was over.

The Trading Age began. By then, my brothers and sister returned from China. Together, we worked in the trading business I had begun--as bodegeros, clerks, warehousemen, cashiers, and collectors. And all this while they were all still going to school; me, I stopped schooling. Like most Chinese-Filipino families, we worked where we lived, and times, we had to endure the stench of rotten oranges and potatoes filling our two-story apartment.

By the early 50's, we were importing cigarettes and whiskey as well. Business was good. But two factors made me change strategies again. First, I saw that trading would in time become a low-margin business because we were at the mercy of our suppliers and buyers. Second, I saw that the government was working on import-substitution policies to encourage local business. President Quirino wanted to shore up the country's foreign exchange reserves that had been depleted as a result of the high importation of the post-war years.

So I decided to enter the Age of Manufacturing. In 1957, I started a corn milling plant producing glucose and cornstarch. Why cornstarch? Because I thought--and it turned out, correctly--that the unglamorous cornstarch would be in great demand from better known businesses like textiles, paper, ice cream, pharmaceuticals, and beer.

But there was one problem: I needed capital. This was not easy. I was 30, had no big company success to back me up, and I didn't know any bankers. Thankfully, Dr. Albino Sycip, then chairman of China Bank, and DK Chiong, then president, gave me a clean loan of P500,000 to start my business. He would be asked later why he did that and he said something about knowing a good man when he saw one. (Maybe he knew something I didn't.) Anyway, from there Universal Corn Products, the predecessor of Universal Robina Corporation, was born.

Of course, the bigger cornstarch players did not give us an easy time. They engaged us in a price war. That is a nice way of saying they tried to kill us by selling low.

But we prevailed, and started to get clients like San Miguel Corporation. It was my first real taste of competition. And I liked it. I think that first experience prepared me for the bigger tougher competitors in my future.

By 1961, cornstarch was becoming a commodity, and I saw that there was no future in a business where we had to keep lowering margins to survive.

It was time to get into bigger, and riskier, game played by big multinationals like Procter and Gamble and Nestlé. I saw that all they did to capture the market was to brand their products, for instance their coffee and their toothpaste. That is, give their coffee and toothpaste a name, a face, and an image that customer would instantly recognize--and identify with quality. Me, I dreamt that one day I would be the Philippine Nestle or General Foods. So the Manufacturing Age for me was giving way to the Age of Brands.

So, we put up CFC, and our first successful product was Blend 45, and instant coffee we put out to directly compete with Nestle's Nescafe. We positioned it as "the poor man's coffee," hired top movie star Susan Roces to endorse it, and employed Procter-and-Gamble veterans to sell it. Basically, we took a page out of the multinational book and applied it to our business. We gave our coffee, snack food, candy, and chocolates a name, a face, an image. Today, Jack and Jill, Max candy, and Cloud 9 have become household names.

It was also at this time that I returned to school for an MBA--with all due respect to the Jesuits, at De La Salle University--and a decade later for a 14-week advanced management program at Harvard. Going back to the university for studies which war had interrupted gave me an appreciation, believe me, for the beauty and the breadth of business life. This is something I believe I would never have gained if I had chosen to stop my education.

The success of URC opened up many opportunities for our group. We had the choice to focus on food where we were very successful--or to pursue other businesses. We decided that there were too many good opportunities to pass up, and that remaining in our comfort zone would stunt our growth. So we got into the Age of Expansion.

For the next two decades, we pursued businesses that answered positive on Four Crucial Questions.

First: Is there a market? Second: Could we compete against both local and foreign players? Third: Could we find the right people for the job and did we have enough capital to pursue the business? Last and most important: Did we have the stomach for it? That is, could we take the sleepless nights, the cutthroat competition?

We went into textiles, retail, real estate, telecommunications, aviation, banking, and petrochemicals because we said yes to all those questions. Still, in all those industries, we were faced with tough and worthy competitors--the mighty SM Department Stores and Malls, the unbeatable PLDT, the entrenched Philippine Airlines and the powerful San Miguel Corporation.

Most pundits expected us to fail. They were wrong. Robinsons Stores and Mall, Digitel, Cebu Pacific Air and Universal Robina Corporation are now market leaders in their respective fields. That's because they offered the public a choice.

Remember the story of David and Goliath? Every industry has its Goliath. But every David knows that all giants have their weaknesses. Every weakness is an opportunity.

In a few months, we will launch our mobile services to compete with two giants, Globe and Smart. Our stomachs are churning for sure--but we know that we faced similar challenges before, and we are hopeful we can prove the pundits wrong again.

In the past decade, which is one-sixth of my entire business life, the company has tripled in size. This was the decade when our companies raised money from the global equity and debt markets, brought our companies public, and hired the best professionals to run them. In six decades, we grew from a one-man team to a group with 30,000 employees.

Now I am in what you can probably call the Age of Globalization. I am always asked where I stand on this issue. I say that it does not matter where I stand because as sure as the Ateneo Basketball Team will win next year's UAAP championship, global barriers will come crashing down, and we have no choice but to prepare ourselves for that.

Still our company will not take globalization sitting down--our future and the country's depend on how we act now. JG operates branded food concerns in Malaysia, Indonesia, Singapore, Thailand, Hong Kong, China, and soon, Vietnam. We also sell our snack foods in India, Korea, and Taiwan--one of the few ASEAN companies to do so.

In a few years, when foreign products find their way into our shopping carts as they already have, we want Piattos and Chippy to find their way into their shopping carts as well. Our dream is to be the first group to plant the Philippine flag throughout Asia.

As I look back, I ask myself, "What if I had stopped at cornstarch?" I would probably be the owner of the biggest cornstarch group in the country today or just as possibly, be broke.

But I chose to live my life unafraid even during times when I was afraid. I discovered that opportunities don't find you. You find your opportunities. I found those opportunities when MY FATHER PASSED AWAY, WHEN WAR CAME, THROUGH CHANGES IN PRESIDENTS AND THEIR POLICIES, DURING MARTIAL LAW, DESPITE THE COUP DE ETATS, PAST ECONOMIC BOOMS AND BUSTS, AND IN THE MIDST OF MARKET SHIFTS AND MOVEMENTS.

Now I'm 75 and retired. And funny, but I often wonder what even happened to my first bike! The bike that was my companion during those first years when my family had lost everything. I wonder where it is now? That bike reminds that success is not necessarily about connections, or cutting corners, or chamba-the three Cs of bad business.

Call it trite--but, believe me, success CAN BE ACHIEVED through hard work, frugality, integrity, responsiveness to change--and most of all boldness to dream. These have never been just easy slogans for me. I have lived by them.

I hope that many of you in this room will some day choose to be entrepreneurs. Choose to be entrepreneur because then you create value. Choose to be an entrepreneur because the products, services, and jobs you create then become the lifeblood of our nation. But most of all, choose to be an entrepreneur because then you desire a life of adventure, endless challenge, and the opportunity to be your BEST SELF.