Building on the 'Edge'

Joey Concepcion has more on his table than most kitchen tables–and even cupboards–would have, literally and figuratively. As president and ceo of giant food and beverage RFM Corporation, Joey has steered the company in a myriad directions, from soft drinks to chicken, processed meat to flour-based products, packaged juice drinks, ice cream and even a fast food franchising corporation.

As if that wasn’t enough, Joey has "cleared the table", so to speak, put up an erector set, donned a hard hat and set up the building blocks. It may have been a rough start to their real estate venture, but Philippine Townships, Inc. (Philtown) is firmly back on track. It’s all systems go for their higher end projects: One McKinley Place, Fairways Tower, and the Metropolitan Athletic Club and Tower. The first two projects are located in Fort Bonifacio, in the area right beside Manila Golf Club, while the last is a stone’s throw away from the Rockwell complex. Collectively, these three projects are known as the "Edge".

"It was really a bumpy road getting this real estate division on its feet," Joey recounts. "The story behind One McKinley Place and Urban Bank Realty is an old one (Urban Bank’s collapse imperiled not only the project but Philtown’s viability), and it’s enough to say that with Export Industry Bank’s participation, we are now in the process of turning over the units to our buyers. Of the 330 units that were there for the taking, only some 10 units are left unsold. With Fairways Tower, a project that should be completed by end 2006, more than 80 percent have been pre-sold, and we just awarded to EEI the construction contract. With Fairways, there was one point when we were actually looking to sell the lot, but there were no takers, and the decision was to push through and market aggressively."

Marketing efforts zeroed in on overseas Filipinos and foreigners: Up to 40 percent of the sold units of Fairways were picked up by foreigners and Fil-Americans. To maximize this potential, a US Sales Office was set up on the West Coast, and last month alone, this office was responsible for moving 15 units.

Whether as an investment, as a place to retire, or just to possess pride of ownership in the mother country, these prospective clients look for high-end yet reasonably priced options. Being just a stone’s throw away from fabled Forbes Park and the Manila Golf Club added to the cachet of Fairways Tower. Whether it’s doctors and nurses who work in the States, or foreigners with Filipina wives, they sent their relatives living here in the Philippines to check out the property.

The Metropolitan Athletic Club and Tower project is Joey’s new "kid". Patterned after the athletic clubs and high-rise housing developments on the US West Coast, it caters to a specific demographic: the emergent young, active, professional. With calculated proximity to the Makati Business District, it’s an affordable alternative that allows one to live within the grounds of an upscale sports club. Seeing Joey at our interview decked out in red Pumas, jeans and a Capri Italia t-shirt, it’s not hard to imagine–if you take away a few years and the family man in him– Joey to be the prime example of the market MAC is targeting.

Straying from your core business has always had mixed results. Make a success of it and you’re the current genius and entrepreneurial whiz kid; botch it and the "I told you so’s" mutiply faster than flies and maggots on rotten meat–and that is how the business community will treat you, like rotten meat. So it was not without some trepidation that Joey faced the spectre of the Asian crisis a few years back and saw One McKinley begin to grow tusks and resemble a white elephant.

"Hindsight is always 20/20," Joey smiles tersely, "and it’s so easy to second guess when you’re referring to decisions made in the past. It was a bold step for the corporation and up to now, we refer to it as our ‘correct mistake’."

The lessons from that experience have obviously been duly noted. "From soft drinks, electronics with PSI, a savings bank, we jumped into this real estate project and there were those within the company who pondered the wisdom of it all. Luckily, we weathered the storm. We are in the process of formally separating this real estate part of the business from the RFM umbrella. In all fairness, this will allow those who are ready to take, or continue to pursue, the real estate plunge to do so without those shareholders of the corporation who view it as too risky, or feel that RFM should stick solely to the food and beverage business."

As a publicly listed company that started off as a family corporation, RFM is that curious hybrid so common in the Philippines and all over Asia. Founded in 1958 by Joey’s grandather, Don Salvador Araneta, Joey knows only too well the difficult road that family corporations such as RFM have to traverse as they shift gears, expand and get publicly listed. The responsibility to shareholders, how the ceo is answerable to every single one of them, how the minority can create roadblocks–all these can only be faced with the utmost commitment to professionalism and dynamism. It’s facing the challenges of the ever-changing economic and business landscape that keeps Joey in his red hot Pumas.

"Among the most difficult things you’ll face is making the decision of unloading a business division that has been there from the start, and obviously has deep sentimental value to the older generation," he says. "For them, it goes beyond the numbers; it’s tradition that you can’t turn your back on, it’s trying to jettison a cornerstone of what has brought us to where we are now. It’s not easy."

But Joey takes it all in stride as part of a growing and dynamic business. "As you press for diversification, seek venture capital or expand into areas you’ve never gone before, you know there’s that danger of falling flat on your face. They’ll always be looking over your shoulder, how you’re putting together the expertise that’s needed, the expenses being incurred."

On this score Joey counts himself fortunate. "While arguments and points of view are threshed out in the boardroom, I’ve been fortunate in that the moment a decision has been arrived at, it’s a unified effort to get to where we want to go. My father, my brothers, the family–our responsibilty to our shareholders–these are all vital cogs in our moving the company forward.

"This is so much better than what I hear from other families facing the same problem of how to keep the family corporation a viable unit. When they recount how even Sunday lunches become battlegrounds for dissenting and confrontational business discussions, I can only shake my head. Success has its price and it’s so sad to hear of families wrangling over the spoils of what their father or grandfather has built up."

The formula is obvious but by no means easy: only strict professionalism and adherence to fundamental business standards will allow the corporation to survive. And while that may seem obvious, many are the times that ego, inggitan among family members and disputes over inheritance come in the way of a family corporation’s survival.

For Joey, the inevitable steps to take include minimizing the number of family members who are actively involved in the running of the company and, if feasible, encouraging each member to run their own business. Post public listing, this becomes really crucial as the last thing you want is the neutral group–the external shareholders–being used to decide matters that family management are at odds about.

It’s almost inevitable that reference will be made to corporate social responsibility as part of the family corporate culture. His grandfather Don Salvador Araneta was instrumental in setting up FEATI and Araneta universities, and was a former Secretary of Agriculture. His father Jose Concepcion or JoeCon is practically synonymous with namfrel or the National Movement for Free Elections, which was set up during the 1985 snap presidential elections and which has fought for clean and credible elections ever since.

While Joey views his father’s work with huge doses of admiration and awe, Joey sees himself "giving back" to society through business expansion and job opportunities created, and the kind of treatment accorded to their employees.

"The footsteps I can only hope to begin to fill are very large," he muses. "I see myself taking a different route, and only time will tell whether I can even be spoken of in the same light. What is funny is how the role my father has taken brings all of us with him. During this last election, I made the personal statement of supporting President Arroyo’s bid by contributing water for their provincial forays. For me, that was a very personal decision, having nothing to do with my father or any other member of the family. Of course, it became an issue in the broadsheets for a period of time!"

This ceo on the edge is family man to the max. Blessed with four children–a son and three daughters–Joey and Marissa have always kept certain weekends and periods of the year "sacred" for the family. Three months of this year were devoted to discovering the Philippines as a family.

Christian, the eldest, is allowed to go out with his friends Friday night, but Joey makes Saturday night their night out. They’ve found common ground in musical tastes, with chill-out music their current craze. "Christian is the one who downloads, then we share files," Joey shares. "Great for me, as I’m kept up to date without the hassle of listening to the stuff that’s out there. He takes care of that for me."

A TOYM (The Outstanding Young Men of the Philippines, in 1995) and Time Global 100 List of Young Leaders for the New Millenium awardee, Joey has always made excellence a standard to strive for. Success may not always crown the effort, but it’s that personal striving that becomes essential for any pursuit. Joey knows from experience that it’s persistence and adaptability that crease the brow of the survivor, and gives one the "Edge" in a very competitive market.