This is an inspiring speech for anyone….by one of the most successful

businessmen in the Phils.

Enjoy reading it, it’s worth it!

http://thepinoy.net/?p=1064#comments

 

 


 

JOHN GOKONGWEI Speech At The AD CONGRESS

21 November 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 [a wet market].

 

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 serve 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 paid 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 nervous 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

 

Low cost. Great value.

 

 

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

served 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.”

 

 

When Singapore was asked to leave the Malaysian Federation of States in

1965, Lee Kwan Yew developed strategies that he executed with

single-mindedness despite their being unpopular. He and hhis cabinet

started to build a nation by establishing the basics: building

infrastructure, establishing an army, weeding out corruption, providing

mass housing, building a financial center. Forty short years after,

Singapore has been transformed into the richest South East Asian

country

today, with a per capita income of US$32,000.

 

These days, Singapore is transforming itself once more. This time it

wants to be the creative hub in Asia, maybe even the world. More and

more, it is attracting the best minds from all over the world in

filmmaking, biotechnology, media, and finance. Meantime, Singaporeans

have also created world-class brands: Banyan Tree in the hospitality

industry, Singapore Airlines in the Airline industry and Singapore

Telecoms in the telco industry.

 

 

I often wonder: Why can’t the Philippines, or a Filipino, do this?

Fifty years after independence, we have yet to create a truly global

brand. We cannot say the Philippines is too small because it has 86

million people. Switzerland, with 9 million people, created Nestle.

Sweden, also with 9 million people created Ericsson. Finland, even

smaller with five million people, created Nokia. All three are major

global brands, among others.

 

 

Yes, our country is well-known for its labor, as we continue to export

people around the world.. And after India, we are grabbing a bigger

chunk of the pie in the call-center and business-process- outsourcing

industries. But by and large, the Philippines has no big industrial

base, and Filipinos do not create world-class products.

 

 

We should not be afraid to try-even if we are laughed at. Japan,

laughed

at for its cars, produced Toyota. Korea, for its electronics, produced

Samsung. Meanwhile, the Philippines’ biggest companies 50 years

ago-majority of which are multinational corporations such as Coca-Cola,

Procter and Gamble, and Unilever Philippines, for example-are still the

biggest companies today. There are very few big, local challengers.

 

 

But already, hats off to Filipino entrepreneurs making strides to

globalize their brands. Goldilocks has had much success in the Unites

States and Canada, where half of its customers are non-Filipinos.

Coffee-chain Figaro may be a small player in the coffee world today,

but it is making the leap to the big time. Two Filipinas, Bea Valdez

and

Tina Ocampo, are now selling their Philippine-made jewelry and bags all

over the world. Their labels are now at Barney’s and Bergdorf’s in the

U.S. and in many other high-end shops in Asia, Europe, and the Middle

East.

 

When we started our own foray outside the Philippines 30 years ago, it

wasn’t a walk in the park. We set up a small factory in Hong Kong to

manufacture Jack and Jill potato chips there. Today, we are all over

Asia. We have the number-one-potato- chips brand in Malaysia and

Singapore. We are the leading biscuit manufacturer in Thailand, and a

significant player in the candy market in Indonesia. Our Aces cereal

brand is a market leader in many parts of China. C2 is now

doing very well in Vietnam, selling over 3 million bottles a month

there, after only 6 months in the market. Soon, we will launch C2 in

other South East Asian markets.

 

 

I am 81 today. But I do not forget the little boy that I was in the

palengke in Cebu. I still believe in family. I still want to make good.

I still don’t mind going up against those older and better than

me. I still believe hard work will not fail me. And I still believe in

people willing to think the same way.

 

 

Through the years, the market place has expanded: between cities,

between countries, between continents. I want to urge you all here to

think bigger. Why serve 86 million when you can sell to four billion

Asians? And that’s just to start you off. Because there is still the

world beyond Asia. When you go back to your offices, think of ways to

sell and market your products and services to the world. Create

world-class brands.

 

 

You can if you really tried. I did. As a boy, I sold peanuts from my

backyard. Today, I sell snacks to the world. I want to see other

Filipinos do the same.