He is one of the Philippines’ richest men (4th in the Forbes 2007 list of the Philippines’ 40 Richest, estimated wealth at $1.1 billion) yet he is probably the most low-profile.
Little is known about Andrew L. Tan, yet children of all ages know one of his businesses only too well: his Alliance Global Group Inc. owns 49 percent of Golden Arches Devt. Corp., franchise holder of the McDonald’s hamburger chain in the country.
His real estate group under Megaworld owns over 200 buildings (defined as four stories and above).
Born of humble beginnings, he was the son of a transistor radio factory worker who came to Manila from China at age 16. Tan has a brilliant mind—graduated magna cum laude with degree in Business Administration from the University of the East. (Mr. Tan graduated from UE in 1974.—Ed.) This despite the fact that he used to walk from Sta. Cruz in Manila to the UE campus because he had no money. People who work with him attest to his brilliance but at the same time describe him as extremely shy.
He owns Emperador Distillers Inc., makers of Emperador Brandy, the world’s largest selling brandy by volume. But his first brand was Andy Player Special which is not being exported.
Tan agreed to answer several questions from the Inquirer.
Q: What were your beginnings? What was your first entrepreneurial venture?
A: I was about 25, and a bachelor, when I first went into business. I was a partner in a wholesale trading firm that imported appliances in bulk and sold them to appliance stores.
How were you raised? Were your parents entrepreneurs? Who was and is the most influential person in your life?
My father worked in a transistor radio factory; my mother was a housewife. I have one brother. One influential person in my life was my mother. As a young businessman, I would consult her before I made any important decisions. We discussed not just business matters, but also anything under the sun. She and her guidance meant a lot to me.
When I married, my wife Katherine became the most influential person in my life. Today, we talk about business almost every day, especially when I have to make important decisions.
In college, many of my classmates were better off than I. They had family businesses of their own. Some owned a grocery shop, others a hardware store. Those in Quiapo ran a small textile business. I was sort of envious of their fortune, so I dreamed of becoming a businessman.
I often told my mother that if I had P200,000 in savings, I’d open a grocery store, and that would surely change our fortune. She encouraged me a lot then.
When I started working, I discovered that you learn something from the people you meet. For me, that’s always a blessing, more so if you meet the right people who can help you succeed.
Some people may disagree, but I believe that for a person to become very wealthy, 40 percent is due to luck and 60 percent to a combination of intelligence and hard work. You just have to be at the right place at the right time. If you are lucky, timing will always be in your favor; otherwise, timing will always be off. There’s a Chinese saying that big success depends on the heavens. For me, good luck accounts for 40 percent of all my success.
What were some of the difficult times in your entrepreneurial life? How did you overcome the difficulties?
Business was very tough when I started. When you don’t have much capital, it is imperative that you have a very good nose. You are like a dog that must always sniff around for food. You cannot afford to fail. That is how you develop an instinct for success.
This does not mean, however, that I always succeeded in my initial ventures. I failed in some of them. I made wrong decisions, too, but I learned from my mistakes to become better and better. After all, mistakes are always a part of doing business. Some people, however, give up especially after a disastrous failure.
Thankfully, I never gave up. I always pushed on, no matter what. I tried and tried again even if the business was in bad shape. You just pick up the pieces, and then get on your feet again.
Usually, people are fond of asking businessmen this question: When did you make your first million? How did this accomplishment make you feel at that time?
I was lucky to have made my first million at 27. A million then was worth much, much more than it is now. A new car cost about P40,000 then compared with P800,000 or P900,000 today. As such, P1 million then was equivalent to about P20 million now. Definitely a lot of money! When I told my mom about my accomplishment, I believe I made her very, very happy.
I’ve heard good things about your children. How did you raise them despite the wealth that surrounded them? Are they all involved in business? Were they exposed to other companies?
Since I’m in business, I naturally want my children to follow in my footsteps. I sincerely wish they would become successful businessmen on their own—or a businesswoman in the case of my youngest child.
You can say that my children were born with silver spoons in their mouths. That is an advantage, I agree, but it could also be a disadvantage. When the going gets tough, people of inherited wealth, who are brought up without any experience of hardships and difficulties, may be wanting in resilience. It may be harder for them to get over a failure. In my case, I’ve had more than my share of life’s challenges. Just like before, if I fail miserably,
I will get up and try to recover.
Another thing about being born in fortunate circumstances is that it may not give you that much hunger for success—like a dog that doesn’t need to sniff around that much for food since it’s always available. That is why aside from a good education, I give my children nuggets of wisdom from the school of hard knocks. I find time to chat and share with them my experiences. If they listen to me and remember what I tell them, if they take me seriously, that will save them a lot of trouble in the future. As a father, I believe that talking to my children and having open, honest dialogues with them is most important.
I always believe that if you want to excel at something, you must be genuinely interested in what you’re doing. You must have a passion for it. Otherwise, success will elude you. As a father, I believe my job is to make my children interested in the business. If they’re passionate about it, they will put in the hard work without feeling stressed out.
I must point out that ours are publicly listed companies, and all are professionally managed. We owe it to our stockholders to run our companies well. We’re a big operation, with thousands of stockholders to answer to. I always keep in mind that we’re not running a family business anymore, and I don’t force my children to work for me. Having said that, one of my children is a middle manager; another is a junior manager. They report to their senior managers, not to me.
What is your vision for Megaworld and how near are you in achieving that?
Today, I’m as passionate as ever about real estate in general and Megaworld in particular. I’m a very hands-on businessman, and I devote a lot of my time running the company’s day-to-day operations. Real estate is the industry that’s closest to my heart. It’s like the lifeblood that runs in my veins. I wake up every morning with a feeling of excitement, knowing that I will be building more homes and helping more Filipinos realize their dream of owning a home.
Our goal is to give Filipinos a good home and do our best to make it affordable by offering good value for money, whether in the mid-income level or in the Triple A level, as in the case of our ultra-luxurious One Central project in Makati.
I understand you have already been paying back society for your blessings. What are some of thegood things you have been doing?
When you talk about giving back to society, the Megaworld Foundation, over the years, has given hundreds of scholarship grants and contributed to many worthy causes, from helping fight cancer to empowering the blind to supporting the La Mesa watershed conservation campaign. Considering the good fortune that has come my way as a businessman, I honestly feel that I want to do more.
Over the next few years, I will try to devote more of my time for philanthropic activities.
Currently, I find that corporate giving still runs along traditional lines. Many foundations and companies are doing virtually the same thing. One of the things we’ll look into is how we can apply business skills and strategies in the area of philanthropy, and how we can help people, programs and causes in a more cost-efficient manner. I’m aware that it’s impossible for any one foundation to do everything and help everyone, so I intend to look for a formula to help us focus our efforts on one particular area that will give the most benefits to the greatest number of people—in effect, achieve much more for our less fortunate countrymen.
What to you are the secrets of your success?
What are my secrets as a businessman? Well, I think one of my accomplishments is the ability to feel the pulse of the market, and of people in general. If you want to succeed in business, you must have developed this knack for knowing and understanding the market and your customers, in order that you can provide the products and services that people will buy again and again.
And it is not enough to know your market and your customers. You must also gain the same mastery and understanding of your employees, suppliers, partners, associates, even your banker and underwriter. If you have a good nose, a good sixth sense, you will be able to fit all of them into your grand plan of success.
What are your passions and hobbies?
I’m a businessman, and my most intense passion is creating wealth, creating jobs and creating value for our stockholders. I also swim when I have the chance; I go to the gym and run the treadmill given the opportunity. These are the activities that I do at my own time and at my own pace.
What to you would be the key to achieving a progressive Philippines?
Ten years ago, the business process outsourcing (BPO) industry was unheard of here in the country. But we at Megaworld saw an opportunity: We established Eastwood City CyberPark as the country’s first IT park. We worked with the government, the private sector and would-be locators. We all worked together to promote the BPO business in the country.
From a very negligible number of employees then, the BPO industry as a whole today employs more than 300,000 people and generates about $5 billion in annual export revenue, based on the latest available data. These figures are projected to go up to 1 million employees and $12 billion in revenues by 2010.
I have observed that we Filipinos have two distinct advantages: our excellent English language skills and the friendly tone of our voice. I thought this was one area where we could excel in.
True enough, foreign customers like speaking to our call center agents. We Filipinos have a naturally pleasant voice, so Americans tend to spend more time talking on the phone. Even if they’re calling from thousands of miles away, they can somehow feel the friendliness, dedication and patience of our agents. Now, if these foreigners could visit here and get to see our people and talk to us face to face, imagine how much more they’d enjoy the experience.
In the same way that these advantages have worked wonders for the BPO industry, I believe that we should invest in business areas that can utilize our people’s inherent strengths. A perfect example is tourism. Aside from our exemplary language skills and natural friendliness, we as a people are known for our hospitality. And need I say that we have a wealth of picturesque landscapes and scenic spots found nowhere else on earth? Not only that, our country is blessed with a gentle tropical weather all year round—an invitation for foreigners who want to escape the harsh winter in their own countries to flock to our shores.
Over the next 10 years, my holding company, Alliance Global Group Inc., is looking to venture into tourism in a big way. I’m not talking about putting up one or two stand-alone hotels alone; we’re planning to build tourism estates on a large scale and with highly attractive products that will trigger a surge of tourist arrivals from all over the world.
What else do you want to achieve in life?
As a businessman with a strong passion for real estate, I hope and pray that we can help our country take a successful quantum leap in the next big business frontier for the country: tourism.