Henry Sy and John Gokongwei were both born very poor. This situation, one may conclude, served as a blessing for the two most celebrated entrepreneurs in the Philippines on their journey to wealth.Shoeless and with only clothes on his back, Henry Sy started his entrepreneurial career by tending at his father’s sari-sari store in Cebu. But Henry dreamed of something big for his future. Hedreamed of having his own business to provide him enough money. In 1945, he put up a small shoe store in Carriedo, Quiapo. From then on, that humble shoe store became Shoemart (commonly known as“SM”). Since there was a constant pouring of capital back into this venture, he then expanded into textilesand household goods and was then opening outlets to selected parts of the country, centering at theMetropolis. On the other hand, John Go (“kongwei” meaning “bright” was suffixed later to his name later)started his road to success by hawking wares in Cebu. This led to his dream of building his own retailing kingdom.
He first started by trading and manufacturing corn starch in 1955 and has soon expanded into supplying groceries and animal foodstuffs in bulk. Later, he ventured also in textiles, banking and realestate, hotels and shopping complex developments. The abrupt expansion of the enterprises of the two business tycoons marked the start of a period of transition for the business empire built over the past three decades by these two businessmen.Since then, Henry Sy has always been proud that his SM outlets had been gradually upgradedinto larger commercial complexes without drawing on bank credits. John Gokongwei also managed to put upprojects without having major borrowings. He had only relied to the big sums of cash Universal RobinaCorporation and Commonwealth Foods Corporation were generating and from the support of his relativesand associates. Strengths
Both Henry Sy and John Gokongwei are health conscious. They value health more than they value their ventures. Henry engaged not in any forms of vices while John has already quitted smoking. Being Filipino-Chinese, both have good business strategies (i.e., no major borrowing), as one may identify this particular characteristic of their race. This helped them put up projects without relying to bank credits. It is important in a business to lesser your liabilities and increase your assets. As for their businesses, the “innovation technique” they presented towards their shopping malls for example, attract people and may somehow feel that they, the customers, are just a step behind their needs and wants.
Universal Robina Corporation (URC) traces its beginnings all the way back to 1954. John Gokongwei was doing very well then as a trader/importer. He had learned the trade when his father died before the war, and had worked hard through the war and postwar years to prosper. However, while he thrived, he took a long hard look at his company, and correctly predicted that trading would remain a low-margin business. On the other hand, a successful manufacturer controlling its own production and distribution would command more profitable margins. Mr. John decided to construct a corn milling plant to produce glucose and cornstarch, Universal Corn Products (UCP), the first linchpin of the company that would become the URC we know today. For a time, business was good. However, Mr. John was still looking ahead, working with an eye towards the future. While the business was doing very well, it was producing essentially a commodity, which a customer could easily access elsewhere.
To stay ahead in the game, Mr. John had to diversify by producing and marketing his own branded consumer foods, similar to the multinational companies in the country like Nestle and Procter & Gamble. In a sense, he wanted to put up the first ‘local’ MNC, borne out of their best practices. Thus, in 1961, Consolidated Food Corporation was born. Their first ‘home run’ product was Blend 45, the first locally-manufactured coffee blend, dubbed as the “Pinoy coffee”. This became the largest-selling coffee brand in the market, even beating market leaders Café Puro and Nescafe. After coffee came chocolates. Nips, a panned chocolate was a staple of Filipino childhood. In 1963, Robina Farms started operations, beginning with poultry products. This was also the beginning of the vertical integration of the Gokongwei businesses, as the farms would be able to purchase feeds from UCP in the future. Later that decade, Robichem Laboratories would be put up, to cater to the veterinary needs of the farms businesses.
Robina Farms expanded as it entered the hogs business in the latter part of the 70s. 1966 saw the establishment of Universal Robina Corporation, which pioneered the salty snacks industry through Chiz Curls, Chippy, and Potato Chips, under the “Jack ‘n Jill” brand. Other snack products would follow over the years, as the company successfully introduced market leaders like Pretzels, Piattos, and Maxx. The coming decades saw more acquisitions and expansion. In the early 1970s, the family entered the commodities business through the formation of Continental Milling Corporation, for flour milling and production. The late 1980s brought the acquisition of three sugar mills and refineries, under URC Sugar.
These two businesses provided stable cash flows, and allowed for further vertical integration in the supply chain, to help URC weather any volatility in the cyclical commodities markets. In line with this strategy, the late 1990s saw the entry of URC into the plastics business, through URC Packaging. While the businesses became more diversified, the companies were slowly integrated in order to streamline and minimize costs. In 2005, the present structure of the group was completed. All the different companies are now organized under the Universal Robina Corporation umbrella, divided into 3 focused groups: the Branded Consumer Food Group, comprised of BCFG Domestic (including packaging) and International the Agro-Industrial group, comprised of Universal Corn Products, Robina Farms, and Robichem and the Commodities group, with the Sugar and Flour divisions