FILIPINO POWERFUL FAMILY AND ITS INVESTMENT IN VIETNAM

The year 2018 marked a significant milestone in JG Summit Holdings (JGS)’ over 60 years of history, a Filipino conglomerate honored by Forbes as one of the world’s 2000 biggest publicly listed firms, as JGS celebrated its 25th PSE Listing Anniversary and reached a peak in its three-year course of power transition. In May 2018, Lance Y. Gokongwei – son of the Group’s founder – officially took the responsibility of leading JGS in the next half-a-century journey to fulfill his father’s expectation.

What has been going on in Gokongwei family’s journey to become a leading Filipino conglomerate under the leadership of the second generation? And how has the Group set its foothold in Vietnam market?

From a leading conglomerate in the Philippines

 “With the mission to make life better, we have extended to our current portfolio,” said Lance when talking about the expansion over the past 60 years of JGS, whose capitalized value edging up to US$56.8 trillion in 2018. Since listed on bourse, JGS’s capitalized value has multiplied by nearly 22 times. In a century’s quarter, JGS’s revenue and benefit gained double-digit annual growth rate of 14% and 10%, respectively.

Before its IPO in 1993, JGS has built strong business in food, agro-industrial and real estate sectors. Within the following 25 years, JGS expanded and enriched its portfolio to offer more products and services to customers. JGS operated and then transferred Digitel Telecommunication Company, becoming a pioneer in the Philippine petrochemical industry through JG Summit Petrochemicals Group(Petrochem), offering quality banking services through Robinsons Bank(RBank), and establishing the first budget airline in the Philippines – Cebu Air (CEB).

Besides business units that JGS holds majority stakes, the Group has minority stakes in PLDT, the largest telecom company in the Philippines; Manila Electric Company, the largest electric distribution utility company in the country; Global Business Power, one of the leading power companies in the Philippines; and UIC, a listed real estate company in Singapore. The Gokongwei family also hold majority stakes at Robinsons Retail the second-largest multi-channel retailers in the Philippines.

Until now, two of JGS’s inaugural businesses, i.e. food and beverage with Universal Robina Corporation (URC) and real estate with Robisons Land, remain the key contributors that account for more than 50% of the Group’s revenue. In Lance’s vision, JGS’s portfolio will continue to evolve to meet new ambitions driven by important changes in leadership and management within the Group during the past three years, such as to become a leading digital conglomerate in the Philippines with strong regional presence.

Lance, 53, represents the second generation that leads the family-run business. Of the Group’s 40,000 workforce, there are only 15 family members involved in the business: two from the first generation and 13 from the second generation. “We always want the best for the corporation's development.” Lance explained why JGS is always open to top-notch personnel outside the family, such as Irwin Lee who was recently appointed as URC group’s President and CEO. 

To the largest Filipino FDI enterprise in Vietnam

Beyond Philippines’ border, JGS has extended its business to the growing ASEAN region that has the same demographic, as well as the Oceania, by offering products and services of F&B and budget airline through its two subsidiaries URC and CEB.

URC, the Group’s largest subsidiary, is one of the fastest-growing F&B companies in ASEAN, serving the consumer with high-quality, trusted products. Over 60 years, URC has grown robustly to be the first “Philippine Pan ASEAN Multinational Company” with presence in the Philippines, Vietnam, Indonesia, Thailand, New Zealand and Australia.

Since starting operation in Vietnam in 2003, URC has invested over US$200 million and created more than 3,000 jobs to local people, becoming the largest Filipino investor in the country and recognized as one of the preeminent FDI enterprises that have made significant contributions to the development of Vietnam. Boasting annual revenue of US$265 million, URC has promoted and exported “Made in Vietnam” to 10 countries worldwide, recording an export growth rate of 37% in recent years.

URC Vietnam also focuses on sustainability strategy by strengthening the tea value chain and coordinating with partners throughout the chain to control safety and quality of raw materials. These efforts started in 2018 when URC joined the PPP Taskforce with Ministry of Agriculture and Rural Development to develop a Sustainable Tea Sector.

Starting in 2018, URC’s sustainability agenda targets the improvement of its energy use ratio by 30 percent and its water use ratio by 30 percent by 2030, as well as developing 60 percent recyclable packaging to reduce the packaging footprint. “It’s imperative that we take our business to the next level by covering our sustainability program to ensure continuing growth,” Lance commented about URC Vietnam’s new mission as a founder member of PRO Vietnam, a coalition committed to reducing single-use plastic waste of manufacturers in Vietnam.