Andrew Tan on his UK distillery mega-deal, need for decentralized development and PAL

As the ASEAN economic integration begins with its daunting challenges and the world economic center of gravity shifts to Asia, how can we in the Philippines take advantage of opportunities and adapt to irreversible changes?

One inspiring role model is a self-made business taipan and the country’s most audacious dealmaker for 2014, Megaworld and Alliance Global Group founder Andrew Tan, who in May this year made history for the Philippines by leading his publicly-listed Emperador Distillers to buy the United Kingdom’s  iconic Scottish Scotch whisky-maker Whyte & Mackay for US$720 million in May.

Sources said there were originally 16 groups interested in Whyte & Mackay, but these were shortlisted. Tan personally oversaw Emperador’s win in London over Western conglomerates such as the French luxury giant LVMH Moët Hennessy Louis Vuitton, American liquor group Brown-Forman (producers of Jack Daniel’s Tennessee whiskey), Italian beverage group Gruppo Campari and Russian billionaire Roustam Tariko (producer of Russian Standard vodka), after two rounds of bidding. 

Among Tan’s other diversified businesses include the McDonald’s fast-food restaurant chain, township developments nationwide like Eastwood City, the Philippines’ pioneer BPO/call center enclaves and the 24-hour Resorts World Manila.

Despite being ranked this year as the country’s third wealthiest billionaire, Tan remains unassuming and self-effacing when asked about his “rags-to-riches” saga. Here are excerpts of our exclusive interview:

PHILIPPINE STAR: How long did it take you to win the bid for the famous Scottish whisky maker Whyte & Mackay, and how did you find out about this opportunity?

ANDREW TAN: It started in January this year, several months (for) the whole process. I was informed about this opportunity by the Macquarie banking group.

Why did you audaciously decide to invest in this British distillery?

I believe this Emperador Distillers investment in Whyte & Mackay is good for the Philippines as a whole, not only beneficial to our business. I believe that our Philippine companies can be globally competitive, although not many have invested beyond Asia like going to the US or Europe. The recent notable ones are Manny V. Pangilinan’s PLDT Group investing in the German tech startup firm Rocket Internet in Europe; John Gokongwei, Jr.’s Universal Robina has also this year bought New Zealand’s biggest snack producer, Griffin’s Foods. All these are positive developments, a good sign that we in the Philippines can also go global.

What are the benefits of Philippine companies going overseas?

Apart from boosting our long-term economic strength like other Asian economic powers, Philippine companies expanding overseas and going beyond our comfort zones or going to some uncharted territories, will help sharpen our management skills. This is also positive for the country in terms of raising the prestige and international profile of the Philippines as a fast-growing economy with our own foreign investors, too, going abroad. This Emperador investment in Whyte & Mackay has also increased interest in Philippine tourism among the British people, Europeans and other foreigners who in the past might have had little knowledge about the Philippines.

What is your dream for the Philippines and our economy in 2015 and beyond?

In 2015, and in the next 20, 30 to 50 years, my hope for the Philippines is for all of us to promote decentralization of socio-economic development outside Metro Manila. 

Our National Capital Region has reached a level which I’d describe as a saturation point in terms of infrastructures and basic services. No matter what our leaders do in terms of building more infrastructures in Metro Manila, the additional people or rate of population growth is always more, so this situation becomes a bottleneck.

The reason we at Megaworld have gone into multi-faceted township developments in Iloilo, Davao, Cebu, Cagayan de Oro City, and next we’re looking at Central Luzon — probably in Pampanga — is due to my hope of helping the Philippines decentralize socio-economic development and opportunities.

I hope we business people can invest more aggressively outside Metro Manila, whether in real estate, factories, or other enterprises, in order to give equal opportunities to all other regions. If we invest more outside Metro Manila, there will be more jobs in other regions, then people need not all flock here to seek better lives, and then our roads wouldn’t be too congested.

Are you optimistic about this hope of yours about decongesting Metro Manila?

Yes, I am hopeful and optimistic. There are many beautiful and resource-rich areas all over the Philippines that are still undeveloped or under-developed, these areas offer opportunities for better master-planning and the emergence of better communities as well as cities. We can now do it right in these places, hopefully no longer repeating the old perennial problems of Metro Manila. I urge all sectors, not only Megaworld, to work together in helping decentralize socio-economic development outside Metro Manila. Let us help give each city or town nationwide more equal opportunities. With more equal opportunities in terms of jobs and education, there will be no more need for all people to crowd our metropolis here.

Why this hope for regional decentralization?

I’ve seen that most of the economic growth in the past 20 to 30 years has been overly concentrated here in Metro Manila. Yes, there is economic growth in other regions, but they are not as much and not as fast, so what we have right now is Metro Manila at its saturation level already, it’s a bottleneck situation. Regional decentralization of development and investments will not only help us attain more inclusive economic growth, this will also make our Philippine economic growth story more sustainable.

What is your comment or assessment of the feud between Lucio Tan and San Miguel’s Ramon Ang for control of Philippine Airlines (PAL), even if off the record?

(Laughs) No, you are free to quote me on this. Maybe this ancient Chinese proverb applies to the PAL situation: “One mountain cannot have two tigers.” I think that even if one is a big tiger and the other is a smaller tiger, still both of them are formidable and strong-willed tigers.

What are your success secrets?

I think it’s due to what we call in Chinese “un-khi.” 

I know what it means. Can we perhaps translate that in English to “destiny”?

No, I prefer that we use the word “luck,” although it may not precisely be equivalent, but I prefer not to use “destiny” because it might not sound humble or as if I’m destined to be rich. I thank God for blessings, or what we commonly call luck. It’s really luck; I just happen to be there at the right place at the right time… Of course, one needs to work hard, be economical, diligent, creative. I also always seek to reinvent myself and my mindset many, many times through the years. Before, I had only 10 employees and could see everyone; now my companies have over 25,000 employees, so though the years, I’ve been reinventing myself nonstop. This need to reinvent doesn’t only apply to us entrepreneurs, but I think to all people too.

Also, I keep assessing and criticizing myself. Whenever there are errors or any setbacks, I look into my heart and keep blaming myself so that I can improve. I think many people tend to look for others to blame whenever there are problems and forgetting to look at themselves, but in my case, I believe in the need to constantly look at myself, blame myself and to seek to improve myself.

Last, I try to be a happy boss, not one who is always angry or surly — that I learned from my first boss when I was still in third-year college at UE as a working student. My late boss Leonardo Ty was a good, humble and always smiling person, so we the employees were so happy to see him and work in his company. Employees are also happy when their boss is happy.

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