Biz buzz: ‘Welcome to the club, Petron’
One cannot help but feel a little sorry for large corporations that, every now and then, fall prey to enterprising individuals who lodge complaints with authorities alleging some environmental or health law violation and leveraging off populist sentiment.
Mining firms and industrial-agricultural companies know this phenomenon well and have become adept at responding to agitated local communities or local government officials.
The latest to join the club is Petron Corp.
The country’s biggest petroleum refiner and distributor has recently become the subject of news reports and complaints from local government officials and a number of Limay residents linking its Bataan refinery to everything from an oil leak, to rashes on residents’ skin and a slew of other would-be environmental or health issues.
And in the midst of all this, Biz Buzz learned that a representative of Limay Mayor Lilvir Roque actually called on Ramon Ang, who heads Petron’s parent firm San Miguel Corp., a day before the complaints against the company hit mainstream media.
In any case, on the day the news broke (sending Petron’s share price plummeting), company officials met with their counterparts in Limay (in a so-called Multipartite Monitoring Team) to review the complaints being lodged by local residents, some of whom were complaining that the ash byproducts of the refinery were causing them to have skin rashes.
The result of the meeting was reported back to authorities in Manila, through the following SMS message: “PG-Enro (meaning the “Provincial Government Environment and Natural Resources official) confirmed that the complainants who were interviewed on TV were the informal settlers who were NOT residents of Lamao or Alangan. The reported skin rashes were verified to be scabies and ‘higad’ bites.
Of course, scabies is an infectious skin disease caused by the bite of a particular mite (Sarcoptes scarbei, if you must know). “Higad,” meanwhile, refers to a rash- and itch-inducing caterpillar. These had nothing to do with Petron’s ash byproducts… which happened to be deposited on the same company property that, by the way, some of the informal settlers were occupying.
Even law-abiding firms are no match for LGU officials and their constituents sometimes. Said one exasperated mining industry official: “Welcome to the club, Petron.” —DAXIM L. LUCAS
Grooming Kuya J
Businessman Lowell Yu, the man behind two fast-growing retailing businesses—Kuya J restaurant chain and membership shopping chain Landers—is taking a 64.17-percent control of dormant mineral exploration firm Pacifica Inc.
His group, which to date already owns 27.65 percent of Pacifica through iHoldings Inc., recently struck a deal to buy out other key shareholders, including the group of Mikee Romero, who needed to replenish his war chest after running (and clinching) party-list representation in Congress.
Based on a report to the Philippine Stock Exchange last week, Yu’s Cebu-based company Unido Capital Holdings Inc. launched a tender offer to other shareholders of Pacifica at a price per share of P0.007. Unido is willing to acquire 14.33 billion common shares of Pacifica comprising the 35.83 percent currently held by the public. The tender offer will run until noon-time of Feb. 3 this year.
One option being considered by Unido is to “use Pacifica for a reverse takeover by an existing ongoing business concern, which may contribute to the revenue growth of the company,” the tender offer disclosure said, albeit adding that there were no definitive agreements for such at this time.
From what we gather from the grapevine, Yu (who, by the way, is the son of Luis Yu Jr., part of the 8990 Holdings triumvirate that also includes JJ Atencio and Mariano Martinez Jr.), is likely buying Pacifica as a future backdoor listing vehicle for Kuya J, a homegrown Cebuano restaurant which has been rapidly expanding across the country in the last two years. This casual dining restaurant offers Filipino gastronomic delights.
Our sources say that once Kuya J hits the critical mass of 100 restaurants—which isn’t far off since it now has 60 stores—that’s the time to bring the food chain public. When the restaurant chain first announced actor Jericho Rosales in late 2015 as its endorser, it only had 18 stores.
Pacifica, currently valued by the stock market at P1.5 billion, is thus migrating from mining to consumer play. —DORIS DUMLAO-ABADILLA
Best broker, again
CLSA Ltd. has again been voted the No. 1 stockbrokerage house in the Philippines, topping 25 out of 27 categories in the Asiamoney Brokers Poll 2016 (including the best local brokerage for the first time).
Recognized for its “differentiated, un-conflicted research,” CLSA Philippines was voted “Best Overall Country Research” for the seventh consecutive year and the “Most Independent Research Brokerage” for the third consecutive year. It topped the survey on research coverage in 14 out of 16 sectors.
CLSA also topped Asiamoney Philippines’ poll for “Best Overall Sales Services” and “Best Execution” for the ninth consecutive year and bagged “Best in Sales Trading” again in 2016.
Global investors voted CLSA’s head of Philippines sales, Alex Dauz, as the “Best Salesperson” in the country for the sixth consecutive year. Head of sales trading Ruby Lao retained the title of “Best Sales Trader” in the country since the category was introduced in 2014 while her colleague, Tom Sullivan, was voted No. 2 again in 2016.
On corporate access front, CLSA Philippines was ranked the “Best for Events and/or Conferences” in the country and retained the title of “Best for Roadshows” and “Company Visits” for the third consecutive year.
“The top priority for CLSA is to deliver unrivaled sales and execution services to our clients and be the absolute best in accurate, independent research analysis. The results of the 2016 Asiamoney Brokers Poll are a testament, once again, to an excellent job done by the CLSA Philippines team,” CLSA Philippines country head Mitzi de Dios said. “In 2017, we look forward to continue upholding this exceptional standard that our clients have come to expect from CLSA.” —DORIS DUMLAO-ABADILLA
Into the big leagues
Mainstream auto firms used to dislike Subic-based United Auctioneers Inc. for drawing away buyers with their more affordable second-hand vehicle imports, especially in the early 2000s.
But that’s no longer the case—at least for auto firms —as company chair and president Dominic Sytin has pivoted the company into selling industrial trucks and heavy equipment.
More interestingly, the selling is made in regular US-style auctions at the company’s sprawling yard inside the former US naval base where the used equipment are offloaded from ships and “remanufactured” before being sold.
Thanks to the construction boom in the infrastructure sector that’s finally being jump-started by the administration of President Duterte, United Auctioneers is doing brisk business, but bidders often buy industrial vehicles in bulk (or in “lots” in auction jargon) rather than piecemeal.
And if you think the company is merely a mom and pop operation, think again. The numbers show that United Auctioneers is now the biggest auction firm in the country and has even gained the coveted global ISO 9001:2008 certification standard. That officially makes United Auctioneers the first and only industrial auction company in the world to be ISO 9001:2008 certified (Yes, “in the world”).
According to a statement from the firm, this certification is a testament to United Auctioneers’ new quality management system, which focuses on continuous improvement in all areas of operations, especially in the production of quality products, providing good customer service and satisfaction.
“With the ISO-certified quality management system now rooted in the company’s core processes and procedures, our customers can rest assured that we are committed to providing the best quality remanufactured industrial trucks and heavy equipment, as well as providing a fulfilling customer experience,” it said.
Not bad for a company that was being “dissed” by the country’s mainstream auto firms and is now a certified world-class outfit. Not bad at all. —DAXIM L. LUCAS
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