"His was a riches-to-rags-to-riches story."
"His was a riches-to-rags-to-riches story."
“If you don’t work, you don’t eat.”
That is one of the most important lessons I learned from my good friend of many years, John L. Gokongwei Jr.. It is a formula for hard work—and entrepreneurship.
Big John died peacefully Saturday, Nov. 9 at 11:41 p.m. at the Manila Doctors Hospital, surrounded by his loved ones. He was 93. He is survived by Elizabeth, his wife of 62 years; their children Robina, Lance, Lisa, Faith, Hope, and Marcia; his in-laws and grandchildren; brothers Eddie and James Go, sister Lily; and nieces and nephews.
This year, two of the Philippines’ greatest taipans passed away, both peacefully. Their businesses are intact and growing under young and capable hands.
The richest Filipino, Henry Sy Sr. died in his sleep on Saturday, Jan. 19, 2019. He was 94. Tatang Henry Sy left a $20-billion fortune. The third-richest Filipino, Gokongwei, had a $5.4 billion fortune.
A third taipan, Lucio “Bong” Tan Jr., son and namesake of Lucio Tan, died, Nov. 11 after he collapsed from playing basketball Saturday, Nov. 9. He was to succeed his father in managing and sustaining Philippine Airlines and the LT Group. Bong Tan was 53.
John’s only son Lance Gokongwei became JG Summit’s president and CEO in 2018 “having accepted the challenge to sustain the immense growth of the company over the past 25 years of being publicly listed, and to bring the group to even greater heights.”
"We, the 75,000-strong employees of JG Summit Holdings and Robinsons Retail Holdings, join the nation in paying tribute to the founder of the first Philippine multinational conglomerate, a philanthropist with a passion for education," said JG Summit and RRHI in a joint statement on Sunday.
"Mr. John, as we fondly called him, was a visionary. He was an inspiration to entrepreneurs and businessmen around the nation, with his pioneering ideas, his strong work ethic, his passion, and perseverance."
Gokongwei built his business empire from scratch from 1957 as a cornstarch plant in suburban Pasig. It became one of Manila’s largest and most diversified conglomerates serving a growing middle class in the Philippines, Southeast Asia and Australasia.
John had a keen eye for big and hugely profitable businesses, preferably those with scale to bring cost down and enhance profitability, serving a robust market with unmet demand to ensure long-term sustainability, and industries serving basic needs like food, telecommunications, energy, petrochemicals, housing and hotels, and air transport. A voracious reader of business papers and financial reports, John could see trends far ahead of his competitors.
His Sun Cellular brought the power of wireless telephony to ordinary Filipinos and his Cebu Pacific the benefit of once elite air travel to everyone. His Cebu Pacific’s plane fares were lower than boat tickets for the same distance at 18 times the speed of travel.
A few businesses did not pan out as expected, like oil exploration and production, and cosmetics. JG’s cellular business was acquired by PLDT.
JG Summit has market capitalization of P562.28 billion ($11 billion) and interests in branded consumer foods, air transportation, property, hotels, retail, petrochemicals, cement, telco, power, and banking. JG is the third largest conglomerate in market cap.
John was not your typical rags-to-riches taipan. He is, in fact, a riches-to-rags-to riches story. He was born with the proverbial silver spoon. In the late 1930s, his father, John Sr., was big time and one of the richest in Cebu.
Until his mid-teens, John was based in Cebu and led a life boys his age would envy. His father owned a chain of movie houses, including the first air-conditioned theater outside Manila. He was the eldest of six children, lived in a big house in Cebu’s Forbes Park, and was driven by a chauffeur to an upscale school, San Carlos University. He was at the top of his class. He would bring classmates to his father’s movie houses. Life was good.
One day, when he was 13, John’s world of wonder stopped. His father died suddenly, from complications due to typhoid. “Everything I enjoyed vanished instantly. My father’s empire was built on credit. When he died, we lost everything—our big house, our cars, our business—to the banks,” he recalled.
Little Big John was left with a widowed mother and five siblings much younger than him. He sent his mother and four brothers and a sister to China. In Cebu, they had nothing to eat, their future in limbo.
John worked. Hard and relentlessly. With a bike, he sold roasted peanuts in the backyard of a now much-smaller home. When that wasn’t enough, he opened a small stall in a palengke, one much farther than the other markets “because there were fewer goods available for the people there. I woke up at five every morning for the long bicycle ride to the palengke with my basket of goods.”
At 15, John was selling whatever people needed—“soap to keep them clean, candles to light the night, and thread to sew their clothes.” Perhaps, without knowing it then, the teener upstart learned the first lesson of entrepreneurship—satisfy a need. As a young businessman, the tall and lanky teener had one advantage—he was young, strong, active, intense. “I did not tire as easily, and I moved more quickly,” he said.
“I was also more aggressive. After each day, I would make about P20 in profit! There was enough to feed my siblings and still enough to pour back into the business. The pesos I made in the palengke were the pesos that went into building the business I have today.” He said: “I told myself, ‘If I could compete with people much older than me, if I could support my whole family at 15, I could do anything’!” And the best person to depend on in a crunch? “Myself,” he grinned. “And so I continued to work.”
From Cebu, John expanded to Manila. He would transport tires on a small boat called a batel, travel for five days to Lucena, load his cargo onto a truck for the six-hour trip to the Philippine capital. He sat on his goods so they would not be stolen.
“In Manila, I would then purchase other goods from the earnings I made from the tires, to sell in Cebu. Then, when WWII ended, I saw the opportunity for trading goods in post-war Philippines.”
At 20 in 1946, John formed his first company, Amasia Trading which imported onions, flour, used clothing, old newspapers and magazines, and fruits from America. After two years, he made enough money to feel confident about retrieving his mother and siblings from China.