Andrew Tan($4.7B)
Megaworld, Emperador Lights, McDonald Philippines.
It is difficult to believe that authentic “rags-to-riches” sagas built on honest hard work still happen in this modern and complex world. The son of poor immigrants from Fujian province, south China and himself born overseas, Andrew Tan grew up in downtown Manila dreaming of someday owning a store or small business like many of his peers’ families. As a child in Hong Kong, he and his family used to share a tenement apartment with four other families, with only one bathroom and one concrete table for all the tenant families’ cooking stoves. Tan recalls the apartment owner even leased out the corridor to another family.
The young Andrew studied accounting and graduated with honors at the University of the East, often preferring to walk to school instead of riding public jeepneys in order to save money. Engineer Conrado Acedillo, himself a self-made man in the air-conditioning business, recalls that he and the younger Tan used to be employees of taipan Leonardo Ty of Union Hitachi, Ajinomoto and other businesses. He remembers Andrew Tan as one of the most hardworking and conscientious employees of the late Leonardo Ty.
Megaworld and Empire East as biggest condo developers
Both still in their fifties, fellow billionaire and realty developer, Senate president Manuel “Manny” Villar Jr., acknowledges Andrew Tan as the undisputed No. 1 condominium developer in the Philippines, surpassing even the old-rich landed clan of the Zobel-Ayalas.
Starting from a residential condominium in Greenhills, San Juan not so long ago, Megaworld and its sister firm Empire East Holdings, Inc. have become trendsetters in large-scale office, residential and other real estate development projects. Tan made a name for himself by redeveloping a former textile mill complex in Libis, Quezon City into the commercial, office, shopping, entertainment and residential enclave known as Eastwood City today.
After the success of Eastwood City, some of his many other urban renewal mega projects in Metro Manila include the City Place complex in Binondo, Manila; the 25-hectare Newport City complex beside the Villamor Golf Course; and the Manhattan Garden City complex at the Araneta Center, Cubao, Quezon City.
Near the existing Makati financial district and next door to the Fort Bonifacio development of Ayala Land, Inc. and the Jose Yao Campos family’s Greenfields Group, Andrew Tan’s Megaworld is developing the 50-hectare McKinley Hill new township. Megaworld is also a leader in the call centers and BPO businesses in the Philippines.
The world’s No. 1 largest-selling brandy
One of the amazing accomplishments of the self-made businessman is his unexpected success in making his homegrown Emperador Brandy into the world’s largest-selling brandy in terms of total number of bottles sold in 2006. This was revealed in a recent issue of Drinks International, a UK-based publication that covers the world liquor industry. Tan’s firm sold 7.2 million nine-liter cases of brandy last year, and plans to soon expand into Thailand and the vast China market.
For years, Andrew Tan has kept this business operation under the radar from his more established competitors such as Ginebra San Miguel of the San Miguel group and Tanduay Rhum of the Lucio Tan group, both liquor brands which have been in existence since the 19th century and iconic brand names throughout Philippine history.
How did Andrew Tan make Emperador brandy and his newer Generoso brandy top brands, poised to soon even outsell the gin and rum liquors in the vast but highly-competitive Philippine hard drinks market? Alliance Global Group, Inc. president Kingson Sian, a graduate of the University of Chicago, explains that Andrew Tan instructed the advertising firms to undertake a totally innovative campaign which shall focus on the concept of “success.”
Instead of following the other liquor brands with their age-old strategy of producing TV and other ads focusing on sexy women and sexy images, Tan wanted the Emperador brand to connote success and all values associated with it such as hard work, drive, ambition, listening to parents’ advice, professionalism and ambition. It was also Tan’s idea to have people wearing only coats and suits in all TV and other commercials of the Emperador brand.
Unknown to most people, when the 1997 Asian financial crisis hit numerous real estate companies throughout Asia, the efficient, fast-growing yet low-key liquor operations of Emperador brandy helped continuously generate the crucial cash flows which kept the Megaworld and Empire East realty firms afloat. Only with the recent public listing of the stocks of Alliance Global Group, Inc. and its acquisition of Emperador Distillers, Inc., did Tan finally reveal the astounding business success and huge sales of his liquor venture.
Alliance Global Group Inc. said it is targeting consolidated revenues of P25 billion in 2007, which represents a 184 percent jump over the P8.8 billion the same firm posted in 2006. In the first half of 2007, the consolidated revenues of Alliance Global rose 254 percent to P12.4 billion and net income increased to P1.23 billion, or representing a 445 percent increase compared to the previous year.
The position of the Philippines’ No. 1 wealthiest billionaire has been changing in the last three annual listings of Forbes magazine, with tobacco king Lucio Tan once being in first place for years, replaced last year by shopping mall king Henry Sy and now the Zobels gaining the top position this year. Based on this flux in the wealthiest roster and in the fast-changing business landscape of the Philippines, it wouldn’t be surprising if the driven, passionate and visionary self-made taipan Andrew Tan would someday become No. 1, and prove himself the new king of the pack.
Building an empire
But fate seemed to have a different plan for this property tycoon, whose conglomerate now spans across various industries—real estate, food and beverage, quick service and tourism and gaming.
Tan has built, through “hardwork and brand building,” an impressive portfolio through the Alliance Global Group that include Megaworld Corp., Travellers International Hotel Group Inc., Emperador Distillers Inc., Golden Arches Development Corp., Empire East Land Holdings Inc. and Suntrust Properties Inc.
While Tan himself is a “shy billionaire” who has always chosen to stay away from the limelight, his outstanding successes, of course, did not go unnoticed.
Property consultants CB Richard Ellis Philippines and Colliers International, named the Tan-led Megaworld as the Philippines’ top residential condominium developer in more than a decade, and the country’s biggest builder of residential condominium in terms of units completed in 2010, respectively.
Tough choice
But these did not come easy for Tan, who started working for others as a marketing executive.
“Business was tough when I started my first company. When you don’t have much capital, it is paramount that you exercise your nose a lot, much like a dog that never ceases to sniff out for food. You cannot afford to fail and lose vital resources. That is how you develop an instinct for success,” Tan relates.
He reveals that two weeks after they launched the first Megaworld project in 1989, the bloodiest coup threatened the Cory Aquino administration.
“Considering that Megaworld then was a start-up, the decision to pursue this project was one of the toughest I made,” Tan notes.
“The Asian financial crisis in 1997 also tested me and Megaworld a lot. The crisis especially threatened the real estate industry. Banks were very averse to lending. We were able to overcome this and come out stronger by being innovative. Megaworld launched Eastwood City, our first integrated township project with the live-work-play mantra, in the late 1990s,” he explains.
Today, Eastwood City is what Tan now considered as the “epitome of a successful development: Eastwood City Cyberpark has been named as the No. 1 IT park and counts more than 40,000 employees, while our condo residents enjoy living here, and shoppers love visiting our new Eastwood Mall. Aside from that, we also have the new Eastwood Richmonde Hotel for business and leisure travelers.”
HARDWORK and brand building were Tan’s tools to success.
Important lessons
“My experience of this crisis will be important lessons to my children in the future,” he adds.
Tan shares that his recipe for success was simple: “Do not expect everything to turn out the way you want it to. Be ready for disappointments. You should have extra bullets left to help you fight another battle.”
“My philosophy as a businessman is really quite simple: Just keep working and investing whatever profit you make in new businesses. That way, you generate more jobs and help the country’s economy grow,” he explains.
Tan reveals that he spends most of his time working and for that reason, he notes that he doesn’t get to spend money that much.
“After all, you also need time to spend your money,” he adds.
Hands-on management
According to Tan, he is hands on with his businesses, particularly those involved in the real estate industry. He says he devotes a lot of his time running the company’s day-to-day operations.
Indeed, Tan has already gone far from his dream of owning a small grocery store, to earning the highest honor the Republic of the Philippines accords any Filipino or foreign national.
And yet, nothing seems to stop Tan from expanding and further building more structures, particularly residential developments and BPO offices.
In particular, Megaworld has been reported to be developing more than 40 residential projects and several BPO offices in Metro Manila, with 11 projects to be launched within the first half of 2012.
Last year, Megaworld has unveiled eight new projects, namely: One Eastwood Avenue, 101 Newport Boulevard, One Uptown Residence, Manhattan Heights Tower 2, Viceroy Tower 1, Greenbelt Hamilton and Belmont Luxury Hotel in Metro Manila. Megaworld has also launched its first project in Cebu called 8 Newtown Boulevard.
“Real estate is the industry that’s closest to my heart. I wake up every morning with a feeling of excitement, knowing that I will be building more homes and helping more Filipinos realize their dreams of owning a home,” Tan concludes.
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