Jollibee's fast-food chains and Ayala's realty venture into China

Courage is the power to let go of the familiar. — Raymond Lindquist

Boldness has genius, power, and magic in it. — Johann Wolfgang von Goethe

NANNING CITY (Guangxi Autonomous Region, South China) — Contrary to the North Korean or Cuban style of socialist thinking that business enterprises should stick to home countries and focus only on self-sufficiency, the best models for true economic success are gutsy, outward-looking nations like Singapore, the Netherlands and South Korea, flourishing with irreversible globalization by having their enterprises invest and compete globally.

While our politicos are having difficulties with our diplomatic ties with China, two much-admired Philippine business groups are successfully trailblazing positive win-win economic ties with the rising economic superpower: Jollibee and Ayala Group.

During a recent visit to this southern and surprisingly green city of Nanning as guest at the recent five-day 9th China-ASEAN (Association of Southeast Asian Nations) Expo in Nanning City which ended Sept. 25, I discovered that the Philippines’ biggest fast-food chain, Jollibee Group, led by rags-to-riches entrepreneur Tony Tan Caktiong, has invested in a popular beef noodle fast-food chain here called San Ping Wang.

I had an afternoon snack at its outlet on the uppermost floor of a posh new mall, the San Ping Wang outlet, not far from American multinational McDonald’s; its beef noodle soup plus the guava juice were delicious. Congrats to Jollibee for helping the Philippines have a decent presence in the booming China economy!

Can Jollibee make San Ping Wang as popular all over China as the American KFC chain franchised by Thailand’s ethnic Chinese taipan Dhanin Chearavanont of the CP Group? Jollibee has invested in two other fast-food brands in China — Yonghe King (rice bowls and soybean milk) in Shanghai, Beijing, Shenzhen, Wuhan, Hangzhou and Tianjin cities; also Hong Zhuang Yuan (mainly congee meals) in Beijing.

Unknown to many, aside from San Miguel breweries going into China under the Hispanic Soriano family or billionaire Ricky Razon of ICTSI operating China ’s port facilities, the Zobel-Ayalas of the Ayala Group are also top foreign investors in the world’s second largest economy with realty and high-tech factory ventures in north and south regions of China.

Can Ayala Group become like Singapore’s Capital Land or Hong Kong’s top developers? Not known to many people, the Ayala conglomerate has invested much in real estate and manufacturing in northern and southern China, also in Macau and Thailand. I met a Thai executive who told me that his competitor — a fellow ethnic Chinese business family — has been a business partner with the Zobel-Ayalas in condominium projects for a decade already.

Ayala Land Inc. (ALI) has its first realty project in China in the northern city of Tianjin, just 150 kilometers east of Beijing. The multibillion-peso project is located in the Sino-Singapore Tianjin Eco-city in the port city of Tianjin. It will be a beautiful US$220 million residential complex.

The Ayala Group’s Integrated Micro-Electronics, Inc. (IMI) has half a dozen high-tech factories in China — a factory in Chengdu, Sichuan province, others in Shenzhen (Liantang, Kuichong, Fuyong), Jiaxing, and the megapolis of Chongqing in southwest China.

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Congratulations to incoming Department of Interior & Local Government (DILG) Mar Roxas for his successful high-level and pragmatist diplomacy in trying to heal the unnecessary rift in Philippine-China relations with his recent visit to Nanning City to meet with China’s new incoming president Xi Jinping and the Deputy Foreign Minister Madame Fu Ying. Mar’s visit coincided with the China-ASEAN Trade Expo.

I support the Mar Roxas style of Philippine diplomacy, guided primarily by our economic self-interests, not by politics which can be disadvantageous to our strategic and economic welfare.

I heard here that it was a wise decision for President Noynoy C. Aquino to send Secretary Roxas, the Mandarin-speaking Presidential Spokesman Edwin Lacierda and Department of Trade & Industry (DTI) Undersecretary Cristino L. Panlilio to grace this annual event, because the other nine ASEAN countries sent high-powered government and business delegations.

Vietnamese Prime Minister Nguyen Tan Dung attended the expo here in Nanning to boost bilateral trade, investments and other ties with China, despite their history of border wars and even bloody sea skirmishes over the Spratleys. In contrast, we the Philippines have no history of war whatsoever with China, so why do some politicos and diplomats act as if we’re at war with the world’s second-largest economy? Why don’t we leverage our longstanding friendly relations with China of over 1,000 years for our economic gains?

At the trade expo in Nanning, Vietnam has the largest number of booths, with 200 exhibitors covering an area of 3,500 square meters and seriously seeking to gain a foothold in the world’s potentially richest and biggest market. Even at the Nanning airport, I saw many Vietnam food products on sale there.

In contrast again, we in the Philippines had only 19 booths at the China-ASEAN Trade Expo, possibly the least number and the smallest among all 10 ASEAN nations. The exhibitors told me to convey their special thanks to DTI Undersecretary Panlilio for taking time to personally visit every Philippine booth and to thank them for representing the country there.

When I asked a Vietnamese official about his country’s economic ties with China, he pointed out that Vietnam-China two-way trade topped US$35.7 billion in 2011, up 30.7 percent from the previous year. In the first seven months of this year, trade totaled almost $23 billion, representing robust growth of 20 percent. Both countries target an increase in their booming bilateral trade to $60 billion by 2015. What is more of an eye-opener was this information: as of July this year, China had already invested in 857 ventures in Vietnam worth $4.5 billion, and a greater influx of China investments is expected.

Can Secretary Roxas continue his diplomatic efforts so that our Philippine economy can benefit from the inexorable rise of China as a major foreign investor, as their wages go higher and their labor-intensive export industries like garment factories, etc. relocate to Southeast Asia?

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Which Philippine companies and brands can be similar to Thailand’s Red Bull energy drink or CP Group; Malaysia’s Shangri-la Hotels; Singapore’s DBS; UOB; Banyan Tree Resorts; or Bread Talk; Indonesia’s Kopiko coffee; Taiwan’s Acer; South Korea’s Samsung?

By the way, though San Miguel Beer under the former leadership of the Hispanic Sorianos pioneered going overseas to Hong Kong and China, unfortunately San Miguel breweries in Spain are out of the Philippines’ San Miguel Corp. due to a move by the Soriano family in the 1950s.

Now SMC has expanded more across Asia under Eduardo “Danding” Cojuangco, Jr. and Ramon Ang. Will San Miguel expand more and conquer the world, instead of just going into diverse businesses here in the Philippines where its bestselling beer seems to have saturated the local market?

What about SM Group, which has successfully opened malls in China to compete with Lotus of Thailand’s CP Group, America’s Wal-Mart, Germany’s Metro, France’s Carrefour and Auchan chains, etc.? Can the Henry Sy family consider going into other foreign markets such as ASEAN countries, or even to India, which just recently opened up its retail sector to foreign investors?

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