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JOLLIBEE mascot with top finance man Ysmael Baysa and founder Tony Tan Caktiong

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Jollibee CFO: My job is to prepare the company for all kinds of shocks

By Doris Dumlao
Philippine Daily Inquirer
First Posted 17:29:00 11/20/2010

Filed Under: Restaurants & catering, business, Awards and Prizes, Personalities

MANILA, Philippines?The son of an auto mechanic from a small town in Quezon who worked his way up to become chief finance officer of globally expanding Filipino fast-food giant Jollibee Foods Corp. has been named as the ?CFO of the Year? for 2010.

Ysmael Baysa reminisces about his humble beginnings during the media briefing announcing him as this year?s recipient of the prestigious annual award jointly given by ING Bank Manila (ING) and the Financial Executives Institute of the Philippines. He shares the honor with his hometown of Sariaya and alma mater Luzonian University of Lucena City in Quezon province.

While most CFOs of top-tier companies are usually bred and schooled in Metro Manila or even abroad, Baysa takes pride in having been raised and educated in his province. ?It?s because of this humble beginning that this award has meant so much more,? he says.

The CFO of the Year Award, which started in 2006, is an annual rite of recognition by the Philippine financial services industry vested among the most outstanding of its practitioners. It aims to ensure the continuous legacy of preserving the succession of dynamic, responsible, ethical and internationally competitive Philippine CFO leaders. This award is based on the values of integrity, leadership, effective stewardship based on the highest standards of business and professional ethics, and specific instances of wealth creation in finance and financial services that are noteworthy of recognition by his peers.

Right after finishing his accounting course at the Luzonian University, Baysa was immediately hired as bookkeeper of small real-estate firm Citizens Development Inc., one of whose owners was Pacifico Marcos, a relative of the strongman Ferdinand Marcos, during the martial-law era. He left two years later to join Procter & Gamble in 1978, where he began a career that immersed him in all aspects of P&G?s operations here and abroad.

This developed his ability to discern the weaknesses and strengths of the company and how to make it sustainable. He stayed on for 23 years until he moved to the Union Bank of the Philippines as its CFO/comptroller from 2001 to 2003.

But Baysa has always dreamt of someday joining a Filipino company and helping to make it big. He joined JFC in 2003 to head its finance and legal departments, involving him in the negotiations for JFC acquisitions locally and abroad.

Global expansion

With Baysa in charge of the coffers, JFC has ramped up its overseas expansion despite a global economic slump. By the year 2017, JFC?s overseas business, which now accounts for about 20 percent of worldwide sales, is seen becoming as large as its domestic operations. When Baysa joined, the share was at a very meager 3 percent.

He says the overseas business will likely grow its share to total turnover to 25 percent in two to three years as the group scales up its network in fast-growing markets.

?Once we hit 25 percent, it will only be a matter of time that we?ll hit 50 percent. We will work very, very hard but our efforts are leading us to the right results. There are many challenges but we have to keep up with those challenges,? he says.

But despite the group?s successful foray in some foreign markets, he says there are big markets that it wants to break into but cannot find the opportunity to do so. As such, the target of growing the overseas business to as large as domestic operations has been delayed for a few years.

?We keep trying to enter India. We hope that someday soon that our effort will pay off,? Baysa says.

Two-fold strategy

JFC?s international strategy is two-fold: bring the Jollibee, Chowking and Red Ribbon brands to markets with heavy concentration of overseas Filipinos or to countries where they will click even to non-Filipinos (like Jollibee in Vietnam); and gain a foothold in fast-growing markets by acquiring homegrown brands?such as in mainland China?and expanding them.

This year has been a turning point for JFC as the group will have opened 100 new overseas stores by the year?s end, which will be as many as its new store openings in the Philippines, he notes. In the next few years, he says new store openings abroad may start exceeding local store rollout. In the third quarter compared with a year ago, JFC?s sales in China grew by 23.5 percent, in the US by 12.4 percent, in Vietnam by 95.1 percent and in the Middle East countries by 36.8 percent.

The biggest challenge of doing business abroad, Baysa says, is to hurdle lack of understanding of the operating environment, such as the legal and tax framework. While many businesses try to expand overseas, Baysa says JFC?s edge is that its entrepreneurial spirit allows the group to embrace complexity and risk.

By recognizing such risks, he says JFC appreciates the potential rewards in terms of diversified profitability.

Apart from growing the overseas business, JFC hasn?t stop growing through local mergers and acquisitions. Recently, JFC finalized a deal to acquire 70 percent of fast-growing grilled chicken restaurant chain Mang Inasal Philippines Inc. This will add a total of 312 stores in the country and is estimated to increase JFC?s store network in the Philippines by 20 percent and worldwide by 16 percent.

As of end-September, the JFC group had a total of 1,953 stores worldwide, of which 1,578 were in the Philippines. Of the local stores, the flagship Jollibee brand has 703, Chinese fast-food chain Chowking has 404, pizza chain Greenwich has 218, bakery Red Ribbon has 215 and Manong Pepe?s has 15. It has 375 stores overseas: Yonghe King in China with 185 stores; Jollibee with 64 mainly in the United States (26), Vietnam (20) and Brunei (11); Red Ribbon with 30, all in the US; Chowking with 37 mostly in the US (19) and Dubai (15); and Hong Zhuang Yuan with 51 stores.

One of Baysa?s biggest responsibilities in JFC is to ?keep the company navigating in the economic environment and not to react to external forces but to anticipate them. I have to keep preparing the company against high inflation or through the extreme tides of high economic growths or economic crisis,? he says. ?Each year, the economic situation is different so I must be able to prepare the company for all kinds of shocks through cost management, investment strategies, pricing strategies and cost controls.?

As CFO, he thinks the ?comprehensive barometer of success is measured in the shareholder value,? which has grown by leaps and bounds for JFC. From share price of P18.50 per share in 2004, JFC is now trading between P90 and P100 in recent weeks. Since 2004, JFC has grown its business by an average of 12 to 15 percent each year.

Elite roster

Gaining this distinction as ?CFO of the Year? has even increased his responsibilities, says Baysa, who has now joined an elite roster of CFOs including Jose Sio of SM Investments Corp. (2009), Sherisa Nuesa, then with Manila Water Co. (2008) and Delfin Gonzales of Globe Telecom (2007).

?Undoubtedly, it raises expectations for myself and my company but I do accept that responsibility. I hope that I and my company JFC will be able to exemplify excellence not only in account management and corporate governance but also in organization building here in the Philippines and abroad,? he says.

Copyright 2015 Philippine Daily Inquirer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.




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