Henry Sy's Next Everest

Monday, May 22, 2006

 

VIRTUAL BUSINESS

By Tony Lopez

 

Having built what arguably is Asia’s largest mall, the Mall of Asia, Henry Sy Sr.’s next Mount Everest is China.

 

“China is the next big project of my Dad,” confides Harley Sy, Henry’s youngest child and president of the family holding company, SM Investments Corp. (SMIC).

 

Henry already has three malls in China—in Xiamen, Jinjiang and Chengdou. Xiamen and Chengduo each occupies an area of over 12 hectares while JinJiang sits on 17 hectares. A fourth mall is planned in Xiamen to be known as Xiamen 2.

 

The main tenant in these malls is Wal-Mart, America’s biggest retailer and second largest company in sales.

 

Says Henry Sy of Wal-Mart: “They are tenants but they also have their own stores. They want to put up 1,000 stores in China. They told me they had a local contractor as a partner but the stores didn’t seem to appeal to them. Wal-Mart is busy building stores everywhere. They need to build more stores. So they proposed that to me if we can join together.”

 

Adds Harley Sy: “Wal-Mart has its strength and we have our own strength. They think it is better if we combine our strengths in doing things together. They want to be located in the right malls. That’s where we can come in.”

 

The Philippines has become Asia’s largest shipbuilder, after Japan, Korea and Taiwan, thanks to the Aboitiz family, which built two shipyards in Balamban town, 49 kms west of Cebu City—FBMA Marine Inc. and Tsuneishi Heavy Industries (Cebu) Inc. (THI).

 

FBMA Marine manufactures state-of-the-art aluminum boats. Customers include Lockheed Martin, the Royal British Navy, and Rederij Doeksen, a leading Dutch ferry operator. FBMA has just completed for delivery two sea slicers for the Mexican oil monopoly, Petroleos Mexicanos. They will be used to ferry as many as 150 workers from oil rigs in the middle of the sea to land, at a fast clip of 22 knots per hour.

 

That is cheaper and more efficient than using expensive and small helicopters. The slicers are so-called because they can cut through the waves using torpedoes equipped with fins and therefore, are very stable in rough waters.

 

If the Mexicans like what they ordered, there is a request for six more boats.

 

THI, meanwhile, has built about 60 vessels since it began operations in 1999. THI Cebu is the Tsuneishi Group’s biggest investment in the Philippines. The company in Japan is owned by a kindly man named Osamu Kambara whom the Aboitizes befriended more than 20 years ago.

 

“I save at least 10 percent on my costs,” Kambara says. Blending Japanese technology and Filipino craftsmanship, the Philippines can build world-class vessels, equal in quality to the best in the world. THI is planning to build car carriers capable of carrying up to 5,000 cars in one trip.

 

The facility has two slipways, one for making ships with deadweight ton capacity of 52,000 and another with DWT capacity of up to 100,000. The Filipino shipbuilding skill is comparable to that of Taiwan, Kambara says, and slightly below that of Japan and South Korea. That is a great achievement considering that Japan, Korea and Taiwan are shipbuilding powers.

 

THI revenue in 2005 amounted to P11 billion, up from P7.5 billion in 2004 and P6.3 billion in 2003. It is doubling capacity and sees a 20-percent increase in revenues this year.

 

The Aboitiz family is looking for one or two more banks to buy and make Union Bank the third largest bank in the country by 2010. Union Bank had earlier bought iBank of Ramon Sy for P13 billion.

 

http://www.manilatimes.net/national/2006/may/22/yehey/business/20060522bus9.html