Eduardo M. Cojuangco , Jr. (born 1927 in Cebu City) is a Filipino businessman with holdings in telecom, financial services, petrochemicals, power, aviation and hog farming. In 2005, he was listed by Forbes as the 34th richest person in Southeast Asia, with a fortune of US$425 million. Some say that the Forbes estimate of Mr. Gokongwei's fortune is very low, considering his large business portfolio.
He is the chairman of JG Summit Holdings, one of largest conglomerates in the Philippines. Some estimates his fortune at a very conservative $4.5 billion well above the $425 million that Forbes estimates. In 2005, his company had spent $700 million of internally generated funds for buying new aircraft for his airline, Cebu Pacific Air, the second largest carrier in the Philippines. From 2003 up to the present his telecom arm Digitel Telecommunication has spent nearly $800 million for its mobile unit Sun Cellular which is now 3rd largest mobile operator in the Philippines. He is in talks right now for his possible $1 billion takeover of UIC a property giant from Singapore which he owns more than 30% already. UIC controls Singapore Land one of the biggest property landlord in singapore. Gokongwei also owns Universal Robina Corporation, largest manufacturer of snacks in the Philippines and the maker of the very successful C2 green tea drink in the country. He also controls Robinsons Land one of the biggest property concerns in the Philippines that operates the Robinsons Malls.
He was born into a wealthy Cebu-based family, originally from China's Fujian province. The family fortune was lost when his affluent father died. He started his business career during World War II, buying and selling rice, cloth and scrap metal. He is married, and has six children. His only son Lance Gokongwei is now in charge of the Gokongwei Empire serving as president and COO while his father serves as Chairman Emeritus.
Profile
Name: John Gokongwei Jr.
Age: 78 years old
Family: Married and have 6 children
Country: Philippines
Riches-to-rags-to-riches. Lived on the street at age 13 after his affluent father died and the family lost everything. Peddled thread, soap and candles during World War II. Now has holdings in telecom, financial services, petrochemicals, power, even hog farming. Enjoys Sunday lunches.
Story page on Asiaweek Magazine:
DAD AND ME
As his empire grows, a Manila tycoon paves the way for his son
By Antonio Lopez / Manila
Please ask him why he isn't married yet, John Gokongwei tells a friend. The Filipino tycoon is talking about his heir and only son, Lance Gokongwei. So when are you settling down, Lance? "When Dad stops buying all these companies," the 30-year-old bachelor shoots back. As executive vice president of listed conglomerate JG Summit Holdings, he helps manage the group's day-to-day operations. "I have a marginal social life," Lance grouses. Tell that to his father. Asked about his son's weak spot, the industrialist snaps: "Girls."
At 70, the rags-to-riches Gokongwei is supposed to be in semi-retirement while Lance gradually takes over the family empire. In fact, the group chairman now travels more often and has given up most of his operational responsibilities. But during this "slowdown mode," as he calls it, Gokongwei decided JG Summit should get involved in petrochemicals, telecommunications, cement and aviation, in addition to the existing food, retailing, property, textiles and banking businesses. "Heavy investments in strategic basic industries is the only way to grow on a solid foundation," he says.
Gokongwei paid $7.7 million for 57% of phone company Digitel in 1993. Two years later, he acquired 98% of Apo Cement. His Cebu Pacific Air started flying in 1996. A $300-million petrochemical complex, 20%-owned by Japan's Marubeni, begins producing polypropylene and polyethylene later this year. Another $500 million will be spent on naptha cracker and polyvinyl chloride plants. In two years, says Gokongwei, JG Summit will vault from the No. 2 position to become the country's largest conglomerate.
{mospagebreak}
| Sales | Profit | EPS growth* | P/E* | |
| Ayala Corp.(property, banking) | 1,126.8 | 236.8 | 28% | 26.1 |
| JG Summit (food, petrochemicals) | 699.5 | 242.3** | 19% | 9.4 |
| Metro Pacific(property, telecom)
| 187.1 | 32.1 | 39% | 24.1 |
| Benpres(power, media)
| 122.1 | 61.5 | 25% | 13.0 |
| Guoco Holdings(property, finance)
| 82.6 | 38.1 | 55% | 9.4 |
It will be an empire run more and more by his son Lance, who has been cautious about his father's grand plans -- and not only for the sake of his social life. "There should be no more big purchases outside our core areas," says the younger Gokongwei. "It's time to consolidate." He shares the worry of some industry watchers, who think the conglomerate is diversifying too much. At least one investment has yet to pay off. In 1994, JG Summit spent $38 million to acquire 19% of Oriental Petroleum, which had discovered oil in its Linapacan field off Palawan island. There's oil there, says the elder Gokongwei, but no cost-effective way of recovering it.
He has not hesitated to spend money on businesses he believes in, despite a reputation for frugality. (After learning how much a bank he had an interest in was spending for beverages, the tycoon stopped going to the executive lounge and made his own tea.) Born in the Chinese province of Fujian, he grew up in the central Philippine city of Cebu, where his grandfather, Pedro Gotiaoco, owned a big trading concern. The death of John's father when the boy was 12 and the advent of World War II wiped out the family fortune. To the original family name Go, John added "kongwei" (Chinese for "bright") and began trading in small goods. At 38, he had made enough money to start Universal Corn Products, which he renamed Universal Robina Corp. in 1970 in honor of his eldest daughter.
From that agricultural base, Gokongwei diversified into branded food (Great Taste coffee, Jack & Jill snacks, Nissin Ramen instant noodles), textiles and garments (Litton Mills), real estate (Manila Midtown Hotels, Robinson Homes), shopping centers (Robinson's Galleria Mall) and finance (18.9%-owned Far East Bank, 14.2%-owned PCIBank). The group is either the leader or a strong No. 2 in these core businesses. Food accounted for half of last year's sales of $699.5 million. But by 1999, says Gokongwei, the new enterprises will contribute $1.1 billion to turnover, with the traditional lines kicking in another $1 billion. He projects profits of $418 million that year, nearly twice 1996 earnings, which were beefed up by extraordinary gains of $105.2 million from the sale of PCIBank shares.
But it is not a sure thing. On petrochemicals, "we will have to be very efficient to be competitive," concedes Gokongwei. The Philippines has reduced tariffs on foreign petrochemicals to 10%, while other ASEAN countries "still have 30%," he says. Imports currently satisfy the country's annual demand for 500,000 tons of the petroleum and natural gas by-products, which are used to make plastics, fibers, fertilizers, textiles and a variety of other items. "We will be competing against the world," says Gokongwei's younger brother James Go (he prefers to use the family's original surname), who is president of JG Summit.
The government may still extend non-tariff incentives to help the country's only petrochemicals maker succeed. "The industry is very technology- and capital-intensive," says Go, who is a chemical engineer. "Not many people would like to take that kind of heavy responsibility. You're thinking ahead five, 10, 20, 50 years." Gokongwei figures his prices will be at least 10% cheaper than the imports because of the tariff and since users will also save on freight, insurance and storage costs. Another bonus: Go promises to provide customers with "good technical advice on how to run their factory better."
The brothers are bullish on the other new ventures. Gokongwei says Digitel earned $26.9 million last year, making it the only profitable phone company aside from former monopoly PLDT. Digitel has installed 300,000 lines in Luzon island (except Metro Manila, which is outside its franchise area) and plans 800,000 more by 2000. It has a 30-year contract to manage the government's existing Luzon telephone network and permission to build an international gateway facility for overseas calls. As for cement, Gokongwei expects a glut in three years, but says 34-year-old Apo Cement will remain competitive. Its facilities are being modernized and expanded at a cost of $300 million.
All told, JG Summit will spend $2 billion from 1996 to 1999 on its new businesses. Part of the money will be sourced from internal earnings, especially from food subsidiary Universal Robina. But the bulk will come from a $500-million global bond offering this year and stock market listings, including Apo Cement, in 1998. Gokongwei says international banks charge JG Summit lower interest rates than PLDT, which has global depository receipts traded in New York. But tapping the Manila stock market for capital may not be easy. "Investors were burned when Digitel was listed," says Conrad Andres, vice-president for research of DBP Daiwa Securities. "The stock lost value from its offering price." The phone company currently trades about 18% below its 1996 listing price.
JG Summit itself is changing hands at a 30% discount to net asset value. "Holding companies are not really popular with investors," says Gokongwei. "They would rather buy into the operating units." He is not worried about concerns that diversification is spreading management too thin. In addition to James, 57, his other brothers Henry, 68, and Johnson, 62, occupy top company posts. His eldest daughter Robina, 35, runs Robinson's Department Stores and The Manila Times daily. And Lance oversees the food interests, aviation, banking and property.
Then there is John Gokongwei. "His track record speaks for itself," says Oscar Hilado, president of the Phinma group, the Philippines' biggest cement maker. "He is one of the most astute businessmen in the country. He knows his business better than anybody else." Fine, but what about those retirement plans? "I'm taking it easy," Gokongwei confirms. "I take off one month out of every three months." But he still reports for work at 9 a.m. and leaves for home at 6 or 7 in the evening -- "only five days a week, no longer on Saturdays." The tables and chairs in his office are stacked with project studies, supplier contracts, joint ventures proposals and other documents. "I like to read," deadpans the entrepreneur.
These days, he devotes more time on the charitable projects of the Gokongwei Brothers Foundation, which owns 24% of JG Summit. It is starting a school to teach welding, carpentry and other skills. Gokongwei also travels, but doesn't exactly vacation. He decided to go into petrochemicals while attending a Pacific Rim business conference in the Indonesian island of Bali in mid-1994. He was aghast to discover that many of the participants came from Asian countries that already had a petrochemicals complex of their own. "Why hasn't the Philippines done the same?" he recalls asking his aides. "It's embarrassing." The next growth area, says Gokongwei, is bio-technology. "Unfortunately, the Philippines does not have the skills to go into it." Get ready, Lance. Your father might just do something about that.
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