At the party given by San Miguel Corp. management and employees for their chairman and chief executive officer Eduardo “Danding” Cojuangco Jr. to mark his 78th birth anniversary on June 10, SMC Chief Financial Officer and Director Ferdinand Constantino revealed how Boss Danding makes decisions.
“Always he never fails to ask whether what we’re doing will have some greater benefit to the country, to our country Constantino revealed. “Makakabuti ba ’yan sa ekonomiya?” “That’s been his personal stamp and a huge influence on all of us who work for him,” the SMC CFO pointed out.
“At San Miguel, we’ve been the beneficiaries of his guidance, his counsel and his vision. ECJ has been behind the effort to transform our company, bringing both passion and a plan to diversify our businesses and infuse in our corporate DNA a new relevance to the larger goal of developing our country. “
As a boss, Ferdie related, Danding “is straight-talking, direct and very laid back—ready to offer advice, but at the same time generous in trusting that we will be able to execute well and in a way that will contribute.”
“He has a lot of respect for the capability of his managers and I think that’s one of the things that have allowed us to grow and be better as an organization. It’s that level of trust that he gives us that makes him a great person to work for.”
“Another thing that stands out about him is that he likes people. ECJ genuinely likes being around people—whether it’s his managers or staff, our basketball players—and it shows. “
For his part, one of Danding’s sons, Charlie, talked about his Dad’s legacy. “It is to make the world a better place than when you entered it,” he said. “You have done that and more,” Charlie toasted his Dad, who was biting his lips. “You are the best.”
Danding Cojuangco is a genuine nationalist and a true patriot. His love of country, of course, didn’t endear him to his business rivals, many of whom were multinationals or local companies with foreign joint venture partners.
At one time, Danding organized the country’s bakery owners because the flour millers, agents of foreign companies, were operating like a cartel and charging exorbitant prices for their flour. He then negotiated with the Russians to give him lower freight cost so he could bring in lower priced wheat for the local bakers. The US Embassy didn’t like it.
At still another time, he tried to bring together the two biggest cola bottlers so that the foreign brand owners could bring down their royalty fees. That didn’t endear him to the so-called anti-monopoly advocates.
His biggest venture was trying to organize the Philippine coconut industry. He believed that coco oil was as valuable as any oil, like palm oil and even crude oil. Coconut oil could be the hub of a huge chemical industry, just like crude oil is to the petrochemical industry. The coco levy issue became the biggest issue against him.
There were a few typos in my previous column about Danding. Here is the corrected material:
The Presidential Commission on Good Government (PCGG) likes to portray Danding as having stolen the money of coco farmers thru the so-called coco levy. Not true.
The original Coconut Industry Investment Fund (CIIF) was only 33.133 million shares of San Miguel. At P50 per share, the 33.13 million shares were worth P1.656 billion. That was in 1983.
The 33.13 million shares represented 31 percent of SMC common shares which later became just 24 percent.
In 2012, 28 years later, those shares had ballooned to 753.848 million. In October 2012, the 753.848 million, now as San Miguel preferred shares, were redeemed by the company at P75 per share. Total redemption price: P56.53 billion.
In addition, between 1984 and 2009, SMC declared cash dividends on the CIIF shares of P12.727 billion when they were still common shares. From 2009 to 2012, when the shares became preferred shares, SMC paid cash dividends totaling P13.569 billion during the holding period.
Add the three—P56.53 billion redemption price for the SMC preferred shares, the P12.727 billion cash dividends on the common shares, and the P12.72 billion cash dividends on the preferred shares—you get P82.83 billion.
Therefore, the P1.656 billion invested in SMC in the name of the CIIF in 1983 became P82.83 billion. Each peso became P50—50 times after 28 years.
Subtract P82.83 billion from P1.656 billion, you get P81.178 billion. Divide P81.178 by P1.656 to get the percentage yield—4,902 percent. Divide 4,902 by 29 years, you get 175 percent.
The CIIF shares in SMC made an average of 175 percent per year for 28 years—a stupendous yearly return by any measure.
Please note that during those 28 years, the Philippines suffered three major recessions, nine coup attempts and two People Power revolts.
Per capita income actually declined as per capita income growth became among the lowest in the world. Poverty worsened. Joblessness increased.
But CIIF’s income in San Miguel? CIIF hauled in P81.17 billion for its P1.6 billion—more than 50 times in 28 years.
The irony is that it is doubtful whether the so-called CIIF money of P1.6 billion really belonged to the coconut farmers. It was Danding’s money disguised as CIIF money. He merely used the CIIF to do a leverage buyout of majority of San Miguel—20 plus 31 percent.
That the P1.6 billion grew in 28 years, from 1984 to 2012, to over P82 billion is proof that Cojuangco didn’t deceive or steal money from the coconut farmers. It is indelible proof of his excellent management of SMC, from1998 to today, its period of most robust and most frenetic growth.
Yet, if you ask Danding what is the biggest thing that he did for San Miguel, it is, he says without hesitation, “having recruited Ramon Ang to be my successor.”
Ramon Ang has brought SMC to new levels of growth and achievements no one has ever dreamed possible, with a dominant presence in power generation, power distribution, oil refining and marketing, airlines, airports, infra, tollways, and many other things. Last year, San Miguel chalked up $17 billion in sales. In five years, Ang projects, “San Miguel will make $50 billion in revenues.”