Manila gets a Dutch treat

He quietly arrives in the country via a private jet, and is promptly whisked away to two southern Luzon factories for his inspection. In the evening, a chopper takes him back to the Peninsula Manila in Makati City, where he stays overnight at the plush presidential suite. He is then the keynote speaker at a Shangri-La Hotel dinner attended by key government officials, businessmen and the press. The next day, he hops on his jet, bound for Singapore.

Ah, the perks and responsibilities of being president, chairman and CEO of one of the world’s biggest electronic companies!

Gerard Kleisterlee assumed leadership of Royal Philips Electronics (or Philips) last April 30. The multinational giant is ninth on the Fortune list of top 30 electronics corporations in the world, and employs some 192,000 people in 60 countries.

To better give you an idea of the magnitude of its operations, Philips reported a sales figure of 37.9 billion euros last year. The company is the global leader in (among others) color televisions, lighting, electric shavers and color picture tubes for televisions and monitors. Each year, some 2.4 billion Philips incandescent lamps are produced. Thirty percent of offices in the world, 65 percent of the world’s top airports, 55 percent of soccer stadiums, and 30 percent of hospitals are lit by Philips products.

That’s why it is indeed a big event when Kleisterlee, together with Philips regional executive for Asia-Pacific Johan Van Splunter, accept an invitation from Philips Philippines president and CEO Pratt Hsu to visit the country.

"I haven’t been to the Philippines despite the fact that I lived for three years in Taipei in ‘96 to ‘99," Kleisterlee confesses. "During those years, we still had a relatively small operation in the Philippines. Now, we employ 5,000 people."

Kleisterlee joined the company in 1986, and quickly worked his way up. More notably, he became familiar with the Asian market when he assumed presidency of Philips Taiwan, later becoming regional manager for Philips Components in Asia-Pacific in 1996. Thus, the current Philips boss brings to the table a portfolio that boasts familiarity with the Asian market – no doubt an important credential that bodes well for a company keen on asserting itself in the East.

"My predecessor had sent me to Asia for a purpose. In the past years, we had not emphasized Asia as a growth region – and wrongly so," he shares.

And though in 1996 Philips had a "distinct growth strategy" for the area, it was derailed by the Asian Flu of ’98. Consequently, Philips looked westward again – specifically to the US stockmarket and the then burgeoning dotcom companies.

But now that Kleisterlee is in the driver’s seat, Philips is sure to focus on Asia again.

"Asia is still a continent that offers significant opportunities for growth in the market and also for reallocation of production," he underscores. He also happily reports that Asia has recovered "remarkably fast" from the financial crisis that had us by the throats just a few years ago, and cites the steady growth of markets such as China.

Interestingly, when Kleisterlee praises the Filipino employee, he knows what he is talking about – and is not merely trying to get on our good side.

When he headed Philips Taiwan, Kleisterlee became familiar with the value and skill of Pinoy workers. "We employed Filipinos," he reveals. "Filipinos have a well-trained, young workforce."

Besides, he says, "Europe is expensive."

In fact, before the economic downturn, Philips had infused a major investment in the Philippines itself.

But what is his impression of the country now? We tell him that the Philippines is always in the news for various reasons – mostly bad.

"We watch very carefully," he smiles, and reiterates that the market here has a sound foundation. "When we invest, we look for three things: a well-educated workforce, good infrastructure, and political and legal stability. Infrastructure can still be improved here, though."

Anyway, Kleisterlee tempers his expectations with a good dose of pragmatism. "We are living in difficult times and in some sectors of the industry that we are engaged in – like telecommunications, ITC, the PC industry – have slowed down, particularly our businesses in semiconductor components and, to some extent, consumer electronics."

It is a testament to just how large an organization Philips is that Kleisterlee remains optimistic of the future despite the company’s third-quarter loss amounting to 799 million euros.

According to Philips’ website, sales in the company’s lighting, consumer electronics, components, semiconductors, and miscellaneous sectors were much lower this year than the same period last year.

Semiconductors, specifically, nose-dived 30 percent in terms of demand. Factories that manufacture these components are now heavily underutilized. The Philips factories in Cabuyao and Calamba collectively laid off about 1,000 workers.

Kleisterlee insists, however, that Philips continues to rely on the strength of sales of its medical systems, lighting, domestic appliances and personal care products. "These may be relatively small in the Philippines, but for us produces stable turnover and good profit. It’s a matter of bringing cost in line with much lower revenue."

But that doesn’t mean that the company is shelving its drive to innovate. "We’re aggressively managing our cost but at the same time we have the ambition to be a technology growth company," he explains. "We have a rich technology base from which to work on and we are preparing the organization to be ready for the moment the economy will pick up again."

And how we cross our fingers with him in that hope.

Kleisterlee believes that technology ought to be unintimidating and practical for the end user. "We want to bring in applications that people will not be afraid to use. We produce technology, but people should know they have it at their disposal."

Simple, of course, works.

Simple, of course, does it.

Who among us cannot relate to Gerard Kleisterlee’s simple joys – jogging, listening to classical music and walking his black Labrador through the woods with his wife?

Exactly.