Biz Buzz: PCSO’s P1B windfall
The conflict between Philippine Charity Sweepstakes Office (PCSO) and Pacific Online Systems Corp., on one side, and Malaysian conglomerate Berjaya, on the other, has turned into a full-blown war.
Berjaya’s local unit, Philippine Gaming Management Corp. (PGMC), came out with guns blazing last week, accusing PCSO and Pacific Online of all sorts of monkey business in their deal for the Visayas-Mindanao lotto franchise.
PGMC also accused the government agency of playing favorites—for Pacific Online, of course—by allowing the listed gaming firm, run by businessman Willy Ocier, to encroach onto PGMC’s Luzon lotto turf.
PCSO earlier argued before the courts that the so-called “exclusivity” of the Luzon franchise area was not set in stone as earlier believed.
Whatever the courts decide, however, it is difficult to argue with the windfall that the newly extended deal with Pacific Online will give to PCSO.
According to one agency official, the 22-percent reduction in lotto terminal lease rates that Pacific Online voluntarily offered to PCSO would save the agency an additional P1 billion over the life of the two-year contract—something that doubles as a public relations preemptive strike by Ocier against PGMC, it seems.
But our government source tells us that the real prize for both Pacific Online and PGMC—as well as other prospective interested parties—may be PCSO’s plan to bid out the lotto franchise (either separately for the Luzon, Visayas and Mindanao areas, or in one massively lucrative nationwide franchise).
Expect the war to heat up further ahead of this event.—Daxim L. Lucas
Speaking of which…
Willy Ocier, president of Pacific Online Systems Corp., is just taking in stride the Holy Week bombardment from its lotto rival, Berjaya Group of Malaysia.
Last Monday, Berjaya’s Philippine Gaming Management Corp. (PGMC) came out blaring with its interest as it tries to wrest control of the expiring Visayas-Mindanao lotto operations contract.
But Ocier feels Berjaya was firing blanks.
“I have been informed that companies that have filed cases against the PCSO board are disqualified from any bidding exercise,” said Ocier matter-of-factly.
PGMC has a pending contempt suit against the new PCSO management led by Margie Juico for allowing Ocier’s company to stray into the Malaysian firm’s Luzon turf.
On Wednesday, Berjaya came out with a full-page ad in the Inquirer paid for by its lawyer, Jose Bernas, the brother of former President Gloria Macapagal-Arroyo’s son-in-law, raising questions not only about Pacific Online’s incursion in Luzon, but also the two-year extension it obtained from PCSO for its Vis-Min contract which was disclosed on Tuesday.
“What a major waste of ad space and money. Whatever PGMC is claiming has been preempted big time by our one paragraph disclosure where we announced the rate cut to 7.7 percent, which is really effectively just about 5 percent now if we account for telecoms, paper and maintenance costs. PCSO is the big winner in our deal,” said Ocier.
Ocier also junked Berjaya’s grumblings about PCSO’s bias toward the Filipino firm.
“What’s wrong if the Philippine government (PCSO) favors a Filipino corporation for a change? Whatever Pacific Online earns ultimately benefits Filipinos … unlike PGMC, whose earnings are repatriated to Malaysia whose government has been committing genocide [against] Filipinos in Sabah,” said Ocier, whose senior at Xavier School in Greenhills, San Juan, Paul Soo, runs PGMC.
“Berjaya is a major Malaysian conglomerate. We are puny in size compared to them. We are similar to the Kirams going up against the Malaysian Armed Forces, and we are also not giving up without a fight,” said Ocier.—Gil Cabacungan
Standout airport
Manila’s Ninoy Aquino International Airport (Naia) may be a consistent winner in various “worst airport” contests around the world. But the Philippines should be proud to know that one of its airports was recently cited one of the best in the region.
Beating six other international airports in Asia, Clark International Airport (code: CRK) last week won the 2013 Routes Airport Marketing Awards for Asian airports serving under 20 million passengers a year.
The award was handed out during an annual three-day gathering of the region’s airline and airport operators in Mumbai, India.
“This is huge,” commented Clark International Airport Corp. (CIAC) CEO Vic Luciano in a recent interview, especially when compared to Naia.
“Slowly but surely, we are putting the Philippines back on the global stage, and the major players in these industries are taking positive interest in our country,” Luciano said.
The winner of a similar award, but for airports serving over 20 million a year, was Singapore’s Changi International.
At the same event, known as the 11th Routes Asia, the Philippine Department of Tourism (DOT) also received the Highly Commended—Destination Marketing Award, narrowly missing top honors in this category pulled off by Tourism Australia.
Routes Asia, organized by UBM Aviation Routes Ltd based in Manchester, United Kingdom, is the largest route development event in Asia.—Paolo Montecillo
Oishi goes to India
He has built a snackfood manufacturing powerhouse in mainland China and is arguably the most successful Chinoy to make his mark in the industrial segment there.
But tycoon Carlos Chan isn’t resting on his laurels.
This April, Chan’s Liwayway Marketing Corp.—maker of the Oishi food brand—is set to open a new manufacturing hub in southern India.
The new factory, which took about two years for Oishi to get up-and-running, is located at Bangalore—India’s take on Silicon Valley. The group is likewise starting to set up operations in Cambodia, Liwayway vice president for finance Enrique Oliver Rey-Matias said in a recent manufacturing forum organized by Asia Society Philippines.
Not too many people appreciate the industrial business of the low-profile Chan (some probably know more about his brother Ben Chan, also a successful entrepreneur in the retailing field) because it is closely held and difficult to value.
Suffice to say, he could easily be as big as some of the tycoons on the Forbes’ list of Philippine billionaires. Oishi, which started its industrial ventures in 1974, has since set up 15 factories in China, four in the Philippines, four in Vietnam and one each in Indonesia, Thailand and Cambodia. India will be its eighth market in the region.
Because its products are bulky, Oishi manufactures where the customers are, thus explaining this geographical distribution of its factories.
These days, Oishi is among the top two players in snackfoods in the Philippines and China. It is No. 1 in Vietnam and Myanmar, Rey-Matias said. But because it is a late-comer in Thailand and Indonesia, the ranking is closer to fifth.
Those eager to see a company of this stature listed on the stock exchange, whether here or abroad, may be disappointed. The company is reluctant to do so because it prefers market share over profits, and thus does not want to be in constant pressure of showing rising profits—something it needs to do as a listed company.
In India, Oishi will compete head-on with a handful of Indian and international companies. But Rey-Matias said this initial venture is just like paying tuition fee to learn more about a market with over a billion population.—Doris C. Dumlao
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