John Gokongwei proves family-run conglomerates work
MANILA, Philippines – John Gokongwei Jr took his place next to other legends of Philippine business like Washington SyCip and Jaime Zobel de Ayala as he was named Management Association of the Philippines (MAP) Man of the Year 2017.
The JG Summit Holdings Incorporated founder and chairman emeritus served a timeless reminder of the depth of the Gokongwei family's role in the advancement of Philippine business.
"Just a few years ago, the conventional wisdom was that family-run businesses could not be as well-managed as non-family-run businesses. But the research has shifted, and our experience as a group shows that a hybrid of family-led publicly-listed businesses works," Gokongwei said in his acceptance speech on Monday, November 27.
During its listing in 1993, JG Summit had a market capitalization of P6.3 billion. Today, the Gokongwei group's two holding companies, JG Summit and Robinsons Retail Holdings Incorporated (RRHI) now have a market value of around P665 billion and have created an estimated 60,000 jobs along the way.
It was not easy, though. Gokongwei went on to detail the challenges his group faced by going public and reaching out to global financial markets in order to fulfill his ambition of being a pan-ASEAN conglomerate.
"Unless placed under the spotlight of the public eye, a family-managed company would not be under pressure to perform. We would become soft and flabby. On the other hand, remaining family-managed would imbue the business with the stability, strong culture, and long-term vision necessary to see our investments bear fruit," he explained.
This balance, Gokongwei pointed out, allowed the firm to invest in capital intensive businesses that bridged the group's first phase of growth to its current one.
Among the group's many firms, he singled out as examples Cebu Pacific, which made air travel affordable to ordinary Filipinos, and JG Petrochemicals, which contributed to the country's manufacturing base.
The same approach, Gokongwei added, "has allowed us to plant the Philippine flag in Thailand, Indonesia, Malaysia, Singapore, China, Cambodia, and Laos, where Universal Robina Corporation (URC) is now a major player, and in Oceania, where we have acquired leading snack food companies in Australia and New Zealand."
The Gokongwei group also has an 8% stake in the country's largest telecommunications company PLDT, a 30% stake in the country's largest power distributor Meralco, and a 37% stake in Singapore-listed United Industrial Corporation, the parent firm of Singapore Land.
"[The approach] allowed JG Summit to forge its own path, despite naysayers, who did not understand our investment choices at first and believed we were not focused enough. It allowed us to stick to our guns, and invest in industries like transportation, power, and telecommunications which would be essential not only for our growth as a company but a nation's as well," said Gokongwei.
On the same day that the 92-year-old Gokongwei was unanimously voted by MAP as Man of the Year, his son and heir apparent Lance Gokongwei was sworn in as a member of the country's largest management organization.
Lance holds key leadership posts in the Gokongwei group, serving as president and chief operating officer of JG Summit itself, as well as president and chief executive officer of both URC and Cebu Pacific, among others.
"I'm happy to be one of the 1,000 members of MAP, and on behalf of our family, I'd like to thank all those who helped my dad make this possible, especially the management and colleagues who are JG Summit's extended family," he said.
The family patriarch credited his family, particularly his mother Juanita and siblings Henry, Johnson, James, and Lily, for being his partners in starting JG Summit.
"When we were still operating out of a small tindahan (store) on Martinez Street in Cebu City, they acted as bodegeros (warehouse personnel), clerks, all-around handymen. They were with me from the very beginning," Gokongwei said.
He also made a special point to thank his "lifelong partner and love" Elizabeth Gokongwei and their 6 kids.
"My wife and I always taught our 6 kids that choosing who they will marry is the most important decision in their lives," he added.
Gokongwei also thanked JG Summit's managers, both family and professional colleagues, as well as all of his employees, past and present. He said they were all instrumental to the growth of JG Summit and RRHI.
"Without your commitment, talent, and your hard work, JG Summit and RRHI would not have grown to this size. We are a family-run business and you are part of our family. This award is yours as much as it is mine." – Rappler.com
We mean business
We mean business in delivering to you the latest information about the economy. But as the saying goes, there’s no such thing as a free lunch.
Rappler aims to continue providing free and fearless journalism – without paywalls and editorially independent from outside interests.
However, we need your help. Reader support enables us to continue telling more stories.
By joining Rappler PLUS, you will receive our editorial newsletters and industry reports, get to join exclusive online conversations with our award-winning journalists, and be part of our monthly events.
Make your move now. Join Rappler PLUS.