Ambassador Jose E.B. Antonio, Philippine Special Envoy to China, recently paid a courtesy call to Ambassador Li Jinjun at the Chinese Embassy in Manila. During the meeting, Ambassador Li enumerated the key points in the China-Philippines Program concluded at the economic forum held last June in Manila. The forum was held at the initiative of Ambassador Li in his efforts to intensify joint cooperative undertaking and was attended by 500 Chinese business delegation.

Among these agreements are in direct investments in mining and manufacturing, specifically for Philnico Mining and a glass manufacturing company in Subic. On Infrastructure Cooperation Programs, China will assist in the South Rail Project by way of preferential loan arrangements. China also intends to build 1 million houses, rehabilitate old textile mills, boost Philippine tourism with a target of 1 million Chinese tourists by year 2010, and establish fish cages and develop lands for the production of hybrid corn and rice..

Surviving during a time of cri­ sis is a matter of choice. We have learned from our own experience that going into business and staying in it during diffi­ cult times is a deliberate choice one makes.

You have to want to weather the tough times. And while we may have little control over exter­nal factors during crises, we can, in a way, control our destinies by the choices we make.

Many things will depend on your own survival instinct, as in many things in life.

All of us here have our own concept (or theory) of business. Some of us think of it as a need, others see it as an exciting endeavor, and there are those of us who think of it as too stressful, especially during slow economic times like this.

John Gokongwei Jr. almost missed out on China . And the reason is that he ap­ parently was not focused on what be­ came the world's biggest consumer market, preferring to make his foray first into South­east Asia rather than China .
Another reason is that his Universa Robina Corp. manufactured first candies, rather than snack foods in China .

In contrast, Carlos Chan's Liwayway Foods concentrated on China first, rather than Southeast Asia , and began making snack foods first rather than candies.

Only later did Chan start making can­ dies and going regional into Southeast Asia.

On Sept. 30, this year, the mayor of Shanghai . Han Zheng, conferred the prestigious "Honorary Citizen of Shanghai" title on two distinguished foreign business executives -- Christopher Gubbey, the executive vice president of the Shang­ hai General Motors Corp., and Carlos Chan (Chan Kiong Ki See), the chairman of Liwayway ( China ) Co. Ltd.

"Honorary Citizen of Shanghai" is one of two major awards given by the city govern­ ment. It is more coveted than the other one, the "Magnolia Gold Award". The white mag­ nolia, whose petals point upwards, is Shang­ hai 's official flower, symbolizing as it does the city's pioneering and enterprising spirit.

Both awards honor expatriates who make outstanding contributions to the city's development.

Some 28 expatriates have received the "Honorary Citizen of Shanghai" award since its introduction in 1997, while 171 expats have been given the Magnolia Awards since 1993.

Honorary citizenship grants perma­ nence residence status to the recipient, plus a medal and a certificate.

Said Chan after being made honorary citi­zen of Shanghai : "The vitality of this city lies in having an open-minded and pro-active gov­ ernment, good investment and a rich human culture. With Shanghai as our platform, I be­ lieve Liwayway is well-placed to be one of the leading snack food companies in the region."

Chan, 64, created the snack food brand "Oishi" in China in 1993. His company has since grown to 11 factories, more than 6,000 workers, and over $250 million in annual sales. Some analysts think Oishi sales are now reaching $600 million.

Using China as his springboard, Chan is leapfrogging into Southeast Asia to tap the growing market for snack foods. He is setting up operations in countries like Myanmar and Vietnam , consumer markets which have largely been untapped.

Inside China , however, Chan has a huge market. Some $300 billion is spent by the Chinese on snack foods yearly, according to one estimate.

On the other hand, the other honorary citizen awardee, Christopher Gubbey, a Briton, says his company, Shanghai General Motors Co., has grown dramatically with pro­ duction three times the level five years ago. Chan is such a low profile businessman he is often introduced as the elder brother of the more prominent Ben Chan of the Bench garments manufacturing and retailing chain. According to his profile in "The Philippines in Shanghai", a book published by the Philip­ pine Consulate General in the city, when he was a young boy in Manila's Chinatown, Carlos Chan went to the movies with his parents and saw the grandeur of Shanghai in the film.

He was fascinated by the pace of its modernization and the vibrancy of its com­ merce. In the 1940s, before the communists took over, Shanghai , after all, was the Paris of the East.

Chan set foot in Shanghai in the late 1980s. "It wasn't quite what he remembered from the movies, but he had the nagging intuition that Shanghai might have some­ thing in store," says the book.

In 1993, Carlos opened his first over­ seas venture- in Shanghai . A dozen years later his Liwayway ( China ) Foods Ltd's "Oishi" has become a household name for quality snack foods like potato chips (they beat Frito Lay anytime), candies, bread, and the most recent venture - mass market brandy. Bright billboards of "Oishi" line many of Shanghai 's elevated skyways.

"I had decided that if I were to go some­ where, I'd go to the center," Chan says. "It was Shanghai ."

"One reason why we were able to estab­ lish our brand in China ," Chan explains, "is that we came early."There was hardly any com­ petition then, and his steadily growing success has earned him the prestigious Magnolia prize for foreign businessmen of good standing.

Another reason for the success, adds his son Carlson, the vice chairman, "is that we focused early on, on Shanghai ." "We developed the technology ourself," points out the elder Chan.

Oishi, which means "delicious" in Japa­ nese, has been chalking up more than $250 million in annual sales.

Chan came at the right time. Under Deng Xiaoping , China began-or rather re­ sumed its modernization. The Ancient King­ dom began opening up its frontiers and tear­ ing down trade and economic barriers. Gradually, it enticed foreign investments and big projects, to boost the economy. It was a startling revolution.

In less than ten years, China wiped out its massive poverty. The economy grew by a scintillating 8% per year. Shanghai itself was growing at a frenetic 22% per year.

Today, China is the world's second larg­ est economy, in terms of purchasing power parity, valued at $8 trillion, behind the United States ($12.3 trillion) and ahead of Japan ($4 trillion), India ($3.6 trillion), and Germany ($2.5 trillion).

In the meantime, trade between the Phil­ ippines and China expanded exponentially, from $1.3 billion in 1995 to $2 billion in 1998, $3.14 billion in 2000, $3.5 billion in 2001, $5.25 billion in 2002, $9.4 billion in 2003, and a massive $13.22 billion by 2004.

Credit President Gloria Macapagal Arroyo for that stunning growth, and vision­ ary industrialists like Carlos Chan.

Chan's success in China proves that the world is increasingly becoming a sin­gle market, thanks to globalization and a dazzling array of free trade agreements (FTAs) between and among countries. ASEAN has become a duty-free area.

Individual ASEAN members are working out free trade agreements with their major trading partners-the United States and Ja­ pan both of which are demanding tariff-free regimes for their respective products.

China has joined the fray. Its main attrac­ tion-the largest consumer market in the world. China likes the Philippines . It is rich in natural resources, its people are skilled and talented. And it is so near, almost at the center of Asia .

Chan began in China by renting two factories in Shanghai and employing more than 400 workers. They were wary of their new Filipino-Chinese capitalist boss.

Despite the odds and difficulties of set­ ting in place a corporate culture, he ad­ justed to the workers' old communist behavior knowing that it was just a matter of time before gains were to be made.

A group of 12 Filipino expatriates was dispatched to help in the transition. Carlos recalls how some employees wept when others were given a pay raise of even just ten yuan; but slowly he drew them to his side through his gestures of goodwill. His most memorable was the change he saw in the workers when he installed heaters in the canteen (which had been used as their makeshift office) during winter.

"They were touched. They said that, af­ ter all, capitalists are not that bad," he says, smiling in his usual genial manner. "There was a gap and I had to adjust. Remember that China was closed for along time and that affected their culture."

It took a year before Chan's factory could produce without importing raw prod­ ucts from the Philippines , where Oishi was originally manufactured, using initially Japanese food making technology.

The eldest child, Carlos bought the family company Liwayway, when the other siblings thought of selling it and were ven­ turing out into other businesses.

An architecture student at Mapua (he dropped out to focus on business), Chan, 63, had his childhood training to thank for. The eldest child of ethnic Chinese immigrants from the country of Jinjiang in Fujian prov­ ince, the young Carlos roamed the Philippine provinces selling cornstarch that his parents had made into a business shortly after the Second World War. It was popular among Filipino households as Liwayway Gawgaw.

For sentimental reasons Chan has kept the company's name, Liwayway, and re­ tained a small portion of the cornstarch business in Manila .

Apart from three factories currently op­ erating in Shanghai , Chan has opened seven others, in Harbin , Suzhou , Ningbo , Xuzhou , Changsha , Zhengzou, and Kunning. Two more in the provinces of Jiangxi and Hubei are set to open later this year.

In ensuring the continuity of family tra­ ditions, three of his sons (Carlson, Archie and Larry) and a son-in-law are put in charge of sales and marketing, general ad­ ministration, and product development.

The family lives together in the factory compound in the suburbs of Shanghai , regularly shutting back to the Philippines where factories have also spread out.

Chan is aiming for a much wider mar­ ket, adding that, "after China , I've devel­ oped the confidence to go regional."

He is expanding into Vietnam and Myanmar , where his fourth son oversees the company operations, and is eyeing possible entry into Thailand and Indonesia this year.

Chan believes that much of what has made China the hottest economy today was Deng Xiaoping's bold open-market policies, saying that the late elder statesman was the "real hero" who raised the world's most popu­ lated country from its economic doldrums.

Says Philippine Star Publisher Max Soliven: "we ought to be proud as a nation of our Filipino-Chinese entrepreneur Carlos Chan, who runs 10 "Oishi" factories in China, one in Vietnam, one in Thailand, and one, soon to be launched, in Indonesia."

Meanwhile, this year's Magnolia Gold Awardees are:

Clerc-Batut Christian J.P. of France, Asia director of Auchan Group, Hypermarket Co.; Gerard Dega of France, chief executive of­ ficer of Alcatel Shanghai Bell; Bob Gill of Britain, general manager of Huntsman Poly­ urethanes Shanghai Co. Ltd.; Tsutomu Ishiguro of Japan, general manager of Shanghai Mitsubishi Electric & Shangling Air-Conditioner and Electric Appliance Co. Ltd.; Koji Kochi of Japan, chairman of the board of Shanghai JMA Research China Intellectech Consulting Co. Ltd..

Lim MingYan of Singapore, chief execu­ tive officer of Capital and China Holdings Group; Tony Liu of United States, president of Advanced Semiconductor Manufacturing Co. Ltd.; Chris Lu of US, general manager of Beloitte Touche Tohmastsu Shanghai CPA Ltd.; Rona Noyan of Turkey, chief representa­ tive of Turkish Garantiban Shanghai repre­ sentative office; and Jesse Jen-Wei Wu of US, chairman of the board of Johnson & Johnson (China) Co. Ltd.

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Metrobank investing P500M in Cebu hotel-casino project
By Vic S. Lopez
BizNews Asia
August 9 - August 16, 2005

The Metropolitan Bank and Trust Company (Metrobank), the country's largest bank, is going into the hotel and casino business in Cebu with an investment of at least P500 million. "This is the first venture of Metrobank in hotel business," says Tourism Secretary Ace Durano.

Durano witnessed the signing of a memorandum of agreement between Metrobank and the Marco Polo Hotel Group of Companies led by its president, Jeffrey Flowers.

The is targeted for opening next year, will be the second local hotel to be managed by the Marco Polo group. Its first operation in the country is the Marco Polo (Davao).

Flowers says his company intends to make the Metrobank facility "the leading hotel in Cebu."
Actually, the project involves the a major renovation of the Cebu Plaza Hotel, which was built and run by the Pathfinder group of Hong Kong in the 1980s. The hotel and its fivehectare land, which was foreclosed by Metrobank in 2003, has been transferred to Federal Land Inc., the property development arm of the bank.

Federal Land has spun off a new company called Asia Pacific Top Management Corp. (APTMC), which will oversee the operational aspects of the hotel.

According to Federal Land President Alfred Ty, the new company is capitalized at P1 billion and is 60% owned by Federal Land and 40% by a group of investors from Hong Kong.
"We are proud to have been selected by APTMC to operate this landmark property," Flowers says. "The addition of the Marco Polo Plaza Cebu will further strengthen our brand presence in the Philippines, which will create synergy in our business referral efforts." He adds: "We see this hotel has great potential in the leisure and meetings and incentives market. We will leverage our hotels in Asia and our worldwide sales network to position the hotel as the leading hotel in Cebu." "The strength of the Marco Polo brand and its reputation for service excellence and Asian hospitality are the natural complement in this important hotel," Federal Land's Ty relates.

A major refurbishment of the former Cebu Plaza Hotel is now ongoing. The works include upgrading of all the safety systems, electrical wiring and plumbing systems to international standards, installation of the latest communication and audio-video systems and renovation and enhancement of all public and guestroom areas. A centralized air-conditioning system will replace the individual air-conditioning units installed in the guestrooms and offices.

"It is our intent to upgrade all facilities of the property to bring is to world-class quality and standards to cater to the demands of international travelers," Ty stresses.

What excites Ty is the pending approval by the Philippine Gaming Corp (Pagcor) of APTMC's application for a license to operate a casino beside the hotel. Another businessman used to operate a casino beside the Cebu Plaza Hotel in the 1980s but labor problems forced the owner to abandon it.

Upon completion of the renovation, the new hotel's 25storey tower will provide 335 guestrooms and suites, including the Marco Polo's signature Continental Club Floor providing the finest in international service.
The refurbished guestrooms will reflect a classic yet contemporary style with a touch of local culture. The dining and entertainment options include the innovative Cafe Marco, an allday restaurant featuring al fresco dining offering a wide variety of western and Asian dishes served buffet style or alacarte.
The Lobby Lounge overlooking the poolside garden will offer designer coffee, traditional tea, light snacks and the best in contemporary entertainment.

Promising to be the choice hotel for meetings, conferences, exhibitions and social events. Marco Polo Plaza's conference and banquet facilities include a grand ballroom with a floor area of more than 1,000 square meters supported by 14 traditional function rooms for a total of 1,380 square meters 1 meters.
In addition to the fully equipped business center, the hotel will feature a state-of-the-art fitness club, spa and tennis facilities.

The existing swimming pool, which will be enlarged, will be designed to give a lush tropical setting, offering both business and leisure travelers an experience of city resort hotel.
Secretary Durano predicts that Cebu will be the center of Western Visayas as far as tourism is concern. Of the 2.2 million tourists that came to the Philippines in 2002, about 1.1 million visited Western Visayas, and 80% of them went to Cebu.

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They say success is just a matter of dreaming. In reality, however, dreaming only constitutes 50 percent of the total picture of success. The other half of the battle to pin down success and truly call it your own depends on the action you invest in achieving your dreams. Aspiration is one thing; materialization of the ambition is another. When dreaming and reality meet, achieving success is complete and yes, it ultimately tastes sweet.

Sweet? Ask Dr. Rolando Hortaleza and he will tell you that success tastes like acetone and cuticle remover. No one can contest him about the "bitter taste" of success because Hortaleza literally ingested these liquid substances when - after carefully assessing that he could not support his wife and their daughter with his income if he practiced Medicine - he dared his fate to become an entrepreneur.

In 1985, with a paltry capital of P12,000 (the total cash gifts he and his wife received as their wedding presents), he ventured into repacking acetone and cuticle remover after he paid P5,000 to his cousin in exchange for a special formula for these "chemicals." Sans sophisticated technology, Hortaleza, his wife Rosalinda Ang-Hortaleza (also a doctor) and an all-around assistant transferred those substances from drums to small. amber bottles using tabo (water dipper) to make their very first cosmetic products under the company name RBH Cosmetics. Inside their two-storey, 500-square-meter house in Valenzuela, their very first products were manufactured.

"Many times, I would siphon acetone and cuticle remover to small bottles. And many times, too, I would accidentally ingest them," Hortaleza said adding that their first year of business venture earned for them a little over P100,000.

Like all entrepreneurs, Hortaleza was itching to hit it big. Seeing a crown of opportunity in making hair spray in 1987 - because big hair style was the fad then - his company offered a high-quality, low-price alternative to the imported hair spray products. As many a woman used his hair spray, Hortaleza stumbled upon a spray of luck as he earned his first P1 million in sales that year.

It was only in 1993 that their technology became sophisticated. By that time, too, their company name had metamorphosed into other names - from Hortaleza Cosmetics in 1986, it was renamed Splash Cosmetics in 1987, Splash Manufacturing Corp. in 1991, until it became Splash Corp. in 2001.

To date, Hortaleza's company is worth P6.5 billion courtesy of its three arms - local distribution and international distribution of Splash and retailing (HBC). From acetone, cuticle remover and hair spray, his company now processes and distributes soap, lotion and exfoliating products like Extraderm, Skin White, Maxipeel and Biolink. From three people working f or Hortaleza Cosmetics in 1985, the company has 1,600 employees now with the inclusion of 40 Indonesians who are employed in his factory in Jakarta, Indonesia.

More than a success story, Hortaleza would like to believe that theirs is a story of hope, a story of humble beginnings. There were times, he said, that instant capital was hard to come by so he resorted to informal channels like borrowing from the Chinese community. At one point, he borrowed from loan sharks just to see his business through.

"I'm very blessed to have my wife because she is very good in handling our finances," said Hortaleza, a TOYM awardee for Entrepreneurship in 1999.

When his business was slowly, but surely making its presence felt in the market, he wanted to hire more people. "I couldn't hire new graduates because they wanted to go to big, multi­national companies."

Hortaleza, who neither felt infuriated nor disappointed by the fact that college graduates would rather apply elsewhere but his company, simply filled his work force with warm bodies. He hired people who just knew how to use the lowly "non-scientific" calculator and made them his salesmen. But he just didn't employ them by that qualification alone. "I hired them for their passion, dedication and determination to be part of the company." Those he hired at the onset of his business endeavor are still with him to this day enjoying benefits like housing. Those who left him walked away with a brimming smile. Why not, when Hortaleza gave them capital to start their own business?

"I always believe that at the end of the day it will always be people issue. As long as you're surrounded by passionate people, you can make sure that your endeavor will take off," he said, adding that their faith in God is the tie that binds all actions of their company.

You can buy technology. You can buy or build structures. But you can't buy passion and loyalty. Hortaleza is very thankful he didn't have to buy determination and dedication from his people. For he practices what he preaches, Hortaleza's people are all wired up to think and act that what they're doing is for the betterment not only of themselves but of their country.

Hortaleza admitted that when he was starting up, his goal was for survival. Now that he has left the launching pad with aplomb, his vision is to "give back to the society."

"The pursuit to succeed should not be taken as an end but rather as a means to the end. We run after profit to sustain life. We bought equipment and nourished ourselves. It's about time we contributed to the society," he philosophized.

Relating well with people is one of Hortaleza's unwavering armor to feel the pulse of the masa. This trait of his is the reason there's no labor union in his company. What's the need for one when, in fact, Hortaleza is within arm's reach of his employees? He is also very concerned about his suppliers, he put up World Partners Bank so accredited clienteles of Splash can enjoy "partnership of equals" when they do their financing transcaction with the bank.

"I'm jologs. I play basketball with them. I sit down and eat with my employees in the factory and we tell each other stories about anything under the sun. I listen to their problems," he said. Most of his employees call him Kuya, a term that does not alienate them from him. He and his wife also stood as principal sponsors in the weddings of their employees. Even his children - two boys and two girls who go to Ateneo and Poveda - are so grounded they spend time with their employees very often.

Even as a young kid, Hortaleza recalled, he has always been maka-masa. "For one thing, I grew up in a below-middle class community in Sampaloc." At the age of 10, he would bring lunch to the employees of his parents in their small retailing business called Hortaleza Vaciador where, after school, he would help by sharpening nippers, pushers, scissors and cutters.

Now that Hortaleza's company has grown big and has weathered the storm posed by competing against multinational skin care brands (Splash is the No. 1 skin care product in the Philippines and No. 6 in the international market, the only local company in a pool of international brand names), many companies want to buy them out especially now that they recently launched "neutraceutical" products like flavored virgin coconut oil and ampalaya tablets.

But Hortaleza said he's not selling his company because it is the flagship of the Philippines when it comes to skin care products, a domain dominated by North America and Europe.

"It is our corporate cause to uplift the pride and economic well­being of the Filipinos," he said adding that, even if it is cheaper to manufacture in China and Thailand, he stood firm in making the Philippines the manufacturing hub.

This is not a far-fetched idea for someone who hires for values, trains for skills and rewards for output. As long as he believes that their company is a living testimony to a story of hope, Hortaleza will keep on splashing his success.

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