ramon s ang ceo sm... an interesting profile

(The Philippine Star) Updated February 16, 2011 12:00 AM )

A few weeks ago, after another survey showed our investment climate rating trailing that of our regional peers, local and foreign business chambers used that development to once again nag the government to do something about it. They pointed to the urgency of making the regulatory system less burdensome, further streamlining business procedures, and making labor laws attuned to the developments in the global economy.

But when a reporter asked San Miguel?s Ramon S. Ang for his reaction, he quickly said, ?e di mabuti. If foreign investors are afraid to come here, there will be more opportunities for local investors.? That was typical RSA. Gruff. Sure of himself. Confident of the potentials in this country. A favorable business climate to him is nice but optional.

Unlike most other local and foreign investors, RSA is taking the country as it is, warts and all. He can live with what most would call disincentives to business including our largely poor governance at national and local levels. He is not rattled by surveys on the country?s competitiveness. He sees opportunities and solutions where most will see disincentives and problems.

Mr. Ang is not your typical local business taipan. He did not inherit his wealth... he worked for it from humble beginnings... no fancy MBA degree. When he started to implement his strategy for San Miguel Corporation, not a few were shocked and many belittled his approach. But today, it looks like his risk taking is paying off for San Miguel and the local economy.

RSA essentially got bored with San Miguel?s traditional business - beer, beverages, food and packaging. They were not sexy enough. I remember him telling me that he could see only normal growth rates that simply do not excite him. And so he diversified into areas, notably infrastructure, alien to the usual business of San Miguel. He also offered to buy out any stockholder afraid to take the route with him.

According to BizNews Asia, the San Miguel Group will generate revenues of P520 billion this year, up 124 percent from the P232.6 billion estimate for 2010. In other words, San Miguel?s revenues have risen in just three years 298 percent from P174 billion to P520 billion. EBITDA would rise 81 percent to P83.7 billion from P46.2 billion estimated for 2010. The 2010 estimate of P46.2 billion is already a 154 per cent increase from 2009?s P30 billion.

Well, those who stayed on must be very happy today. From its 52 week low of P66.55 per share, San Miguel Corporation has risen 184 percent to P189.55. Market cap rose from P153.62 billion to P404 billion, a gain of P250 billion in just six months. RSA transformed a boring century old company into a vast conglomerate.

I look at his portfolio of investments and I see the infrastructure component of government?s national development plan or the wish list of PPP projects... except that San Miguel?s list is now reality and not mere plans and promises. He gives the impression that he would take on the entire PPP program if only he could raise the resources to do so.

San Miguel now has stakes in power distribution (Meralco), oil refining and distribution (Petron), power generation (Sual, Limay, San Roque, Ilijan), banking (B of Commerce), mining (Daguma Coal), property, telecom (Liberty tel), airport (Caticlan and Clark), tollways (Tarlac to Pangasinan), mass transport system (MRT 7 Commonwealth), ports and logistics (North Harbor) and if the grapevine is to be believed, with the national grid as well by proxy. Personally, RSA owns Diamond Hotel and Cyberbay, a real estate play at the reclaimed area of Manila Bay.

RSA has made an offer to buy Pagcor in case P-Noy makes good his post election promise to sell Pagcor operations to the private sector and just retain its regulatory functions. He promises to build a world class airport in Caticlan that can bring in thousands of tourists to Boracay in the next 18 months. He wants direct flights from Hong Kong, Singapore and East Asia to Boracay and there are rumors he will tie up with a foreign budget airline to help make that happen. He also wants to be part of the consortium building a new airport terminal at Clark.

RSA is disruption personified for Philippine business. This car mechanic from Tondo is probably the best risk taker in the local business scene. He catches other captains of industry by surprise because the risks he takes are simply outrageous by conventional wisdom. The tollways up north with its low traffic count, for instance, won?t see a profit for a long time.

He thinks he is being pioneering. He says his reinvention of San Miguel is more evolution than revolution. He told Tony Lopez of BizNews Asia that ?what is important in business is not emotion but to move forward. You should not stand still. If you hit a setback, backtrack. Then move forward. You cannot be emotional about your business otherwise you bog down and get stuck with a sunset industry.?

A big believer in the potentials of the Philippine economy, Ang thinks the country?s economic development can be jumpstarted by big investments in infrastructure, mining, tourism, and heavy industries like steel and petrochemicals. If only all our taipans and the heads of the traditional business families in the country think like RSA, the PPP will require no additional selling effort.

?San Miguel,? RSA told BizNews Asia, ?will go where there are opportunities without having to play politics.? But if he has to, he is an expert in the art of playing politics for business gains. He couldn?t have taken on the Petron and Meralco shares from Ashmore and GSIS if he didn?t call on his political options.

In fact, I remember wondering why San Miguel is investing heavily in big ticket infrastructure plays that require a favorable regulatory environment at the sunset of Ate Glue?s reign. As it turns out, it didn?t matter to him who was at Malaca?ang. RSA can make friends with whoever is there and convert enemies to allies.

It isn?t difficult to be suspicious of RSA. With his physical appearance, all you need is a black cat on his lap and he would be a perfect James Bond villain. He is an acquired taste. But you can sense he has retained much of his humble Tondo roots. He is a hands-on manager, in fact, maybe too hands on. Building those bulilit Petron stations for instance, is his idea, as is the all gasoline 100 octane Blaze and the low octane Pinoy gasoline.

He is a voracious consumer of information. Before bidding for the geothermal operations of PNOC EDC, he hired some of the retired experts on the resource and read up so much that he sounded like an expert himself when he talked to me about it. He knows what he needs to know about coal, power and the other areas he has invested.

He talks a lot, a quality that endears him to the business journalists covering him. Unlike with most business executives, we can text a question directly to him and he actually responds within minutes. I have approached him with a lot of skepticism and cannot help be suspicious of his backroom wheeling and dealing. But then again, his consistent delivery of what he says he would deliver is his best response. What I thought were his ?boasts? turned out to be true.

Of his rivalry with Metro Pacific?s Manny Pangilinan, he smiles and declares that he will win in the end... ?I am 10 years younger than MVP,? he grins, time enough to see his vision through long after MVP has retired. I don?t know if that?s a challenge or a threat, but it doesn?t really matter so long as he delivers.

We do need CEOs like him who can look at our country?s development needs and go out to make those needs their opportunities to make a profit. I have not heard of anyone express such bullishness about the Philippines ... Presidents and government economic managers included.