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The Man From Fujian

Lucio C. Tan is a household name in the Philippines. Perhaps only a few have not heard of the well-known Chinese-Filipino industrialist and businessman. He became even more prominent in the ‘90s when various international publications, particularly in the United States and Asia Pacific, took notice of his corporate exploits. People see him as a financial wizard, one steeped in Chinese philosophy and culture, who can turn around and work wonders on even seemingly hopeless business ventures. They are awed by his entrepreneurial acumen and skills, and praise him for his outstanding contributions to his adopted country’s economic development.

Building a Cigarette and Liquor Enterprise through Hard Work

A genius never shows off, goes a Chinese saying. So it is with Mr. Tan. He does not readily strike others as the tycoon that he really is. Simple in attire and sprite in movements, he appears like your ordinary, friendly Chinese merchant. But that’s only a first impression. Seeing the long queue of prominent businessmen wanting to see him in his office and hearing him speak, one senses that Mr. Tan wields extraordinary power and influence. He has the bearings and aura of a true leader.

The success of Mr. Tan’s enterprise is deeply rooted on liquor and tobacco. He owns Fortune Tobacco, the country’s biggest cigarette-manufacturing company; Asia Brewery, the second largest producer of beer and bottled water; and Tanduay Distillers, one of the oldest (it was founded in 1854) and biggest rhum producers in the world.

A helicopter ride provides a bird’s eyeview of the sprawling Fortune Tobacco and Asia Brewery complexes, which, from the air, looks like picturesque garden estates. Every day, their factories churn out dozens of cigarette brands and eight brands of beer that find their way to domestic and world markets.

In the 30 years since the founding of Fortune Tobacco Corporation, we encountered great difficulties raising funds and experimenting with our formulas, thus recalled Mr. Tan in 1996 during the company’s 30th anniversary. Our products, which were not selling too well at first, now sell briskly, thus laying a solid foundation for our business. All the things that happened in this period are still fresh in my memory. This achievement is the result of the support and encouragement from my parents, relatives and friends, and from the unity and hard work of my colleagues.

Back in 1965, when Mr. Tan was just setting up Fortune Tobacco, the domestic market for cigarettes was dominated by old established companies. With his meager funds, he wondered how he could position his products against the more than a hundred local and foreign brands competing in a cut-throat market. Through market research he learned about the sale of high-, medium-, and low-grade cigarettes in the country. He discovered that a large consumer base existed for medium-grade cigarettes. He therefore decided to invest in the production of such cigarettes, but resolved to make the quality better than that of the competition. Ever Cool, the first brand produced by his company, made it to the market after some twists and turns. It proved that his decision was correct.

With Fortune flourishing in the early ‘70s, Mr. Tan went full blast creating a diverse conglomerate. In 1970, he brought in from Taiwan advanced livestock-raising technology to set up Foremost Farms, one of the biggest hog farms in Asia.

For his advocacy of scientific pig farming, the Central Luzon State University conferred on him 30 years later an honorary doctorate degree in applied agriculture. He was cited, in particular, for his outstanding contributions to the country’s agriculture and livestock raising.

In 1977, he acquired the defunct General Banking Corporation (GenBank) and renamed it Allied Banking Corporation. Through innovation and restructuring, it now consistently ranks among the top 10 banks in the Philippines in terms of assets and deposit base. Allied Bank boasts of a network of over 250 branches, including those in London, Xiamen, Singapore, Guam and Bahrain. The core institutions of the Tan conglomerate are housed in the bank’s main office building in Makati City.

A year later (1978), Mr. Tan acquired Riverside Steel Inc., a Philippine subsidiary of Kawasaki Steel Corp., one of the biggest steel firms in Japan. Renamed Grandspan Development Corporation, it engaged in large-scale building and construction projects both in the Philippines and abroad. Grandspan expanded its core business to include steel fabrication which won it world recognition. The company was chosen partner by leading international construction companies for its quality designs and workmanship and for the durability of its steel structures.

Mr. Tan established Asia Brewery in 1982. At that time, San Miguel - a beer first brewed by an ethnic Spanish family had been a fixture in the Philippine market for over 90 years. With his finely honed business sense, Mr. Tan found a breach in the fiercely contested beer market: The market looks like a bucket filled with rocks: It appears to be full, but actually there exists a lot of space between the rocks. The space could be filled with sand then water could be poured into the sand.

He hired experts to study the market, gather information about name-brand beers in other countries and develop new-flavor brews. Asia Brewery’s first brand Beer Hausen - sold like hot cakes immediately after its launching. At the same time, Mr. Tan also imported world-famous beers into the country

In 1985, he purchased the 500-room, five-star Century Park Hotel, now a favorite venue frequented by ranking Philippine government officials as well as local and foreign businessmen.

Mr. Tan’s goal of providing world-class products and services got another boost when he established MacroAsia Corporation on November 26, 1995. A publicly listed company, MacroAsia provides catering, ground handling and engineering and maintenance services not only to its sister companies but also to over 20 international carriers landing in the Philippines. The firm is widely known in commercial aviation circles for its strict adherence to international standards, commitment to quality, efficiency, and customer care. The company has also become a seedbed of talent for Filipino engineers, chefs and ground staff

Despite the hardships, Mr. Tan used his talent, insight and business acumen to create a diversified business enterprise. At the same time, he laid the foundation for what is known today as the Lucio Tan Group of Companies.

-Excerpts from the picture album Lucio C. Tan, published by Xinhua Puhli.s’hing House

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