Biz Buzz: Zero to hero

One of the greatest fears of students is to graduate from college when the job market is tight.

And so it was for Nico Jose Nolledo, who graduated in 1998 just as the Philippine corporate world was suffering the strongest effects of the East Asian financial crisis that erupted only a few months before.

“I spammed every company I could find with my resumé, and I walked up and down Ayala Ave. knocking on company doors, with no luck of landing a job,” said Nolledo, who graduated from the Ateneo de Manila University with a business management degree.

“BML” in school parlance stands for “Business Management Lang,” in contrast to “BMH” of “Business Management-Honors” from which he was kicked out for not making the grade.

“Nix,” as he is known to his friends, finally landed a job as a “counter manager” of the KFC fast food outlet at SM North Edsa. (The Ramcar Group that owned the local KFC franchise was in the middle of its own financial crisis, too, at that time.)

These humble beginnings did not deter him, however, from founding local online forum PinoyExchange.com (still active today), which was soon acquired by the Ayala group.

The acquisition made him part of iAyala—the Internet incubator of the Zobel family-led conglomerate—where he cut his teeth as an IT innovator.

But he still wasn’t happy with this achievement. He soon left iAyala and, with only P62,500 and a couple of partners, founded an IT firm known as Xurpas Inc.

He and his partners soon built up the firm into one of the country’s largest IT service providers focusing on the booming telecommunications and Internet industries—all without taking on a single peso of debt or a single peso (or dollar) from venture capitalists.

“Everything is internally generated,” Nolledo said of the company’s asset base, which stood at P264 million as of the first half of 2014 (93 percent of that is in the form of cash and receivables).

Xurpas has executed more than 300 mobile campaigns for corporations, such as Globe Telecom, Smart Communications, Nestle, Unilever, Jollibee Foods Corp., San Miguel and Citibank.

More importantly, Xurpas is now about to go public and is just awaiting regulatory approval for its initial public offering. How much does it plan to raise? About P1.44 billion for allowing investors to own a small slice of the pie. Not bad for a firm that was founded on P62,500.–Daxim L. Lucas

New PVB CEO, sort of

He was ready to retire in September, but Philippine Veterans Bank still needed Joey Bermudez to serve as its president for a few more weeks, while it searched for a replacement.

You see, finding a president for Veterans Bank is not an easy task. Running the bank can be a challenging endeavor, especially since there are legal limitations, which make raising fresh capital a complicated process.

Bermudez was asked to keep the CEO’s chair warm for a while longer. To his relief, the bank’s board finally decided to let him retire last Friday, Oct. 31—Hallow’s Eve, of all days.

Has the bank found a new CEO? Well, yes and no. Bank chair Roberto de Ocampo (the former finance secretary under the Ramos administration) now wears two hats since he was named “acting CEO” for the meantime.

The board did, however, hire a new COO—that’s chief operating officer—in the person of Nilo Cruz, who was formerly with ANZ Bank.

In any case, we understand that Bermudez is now raring to return to his pre-Veterans Bank life as a social financier and impact investors through the Maybridge Group, which has a very strong advocacy in microfinance and financial capacity building for the underprivileged both here and overseas.

But the first item on his agenda is to visit his family in Canada for some much-needed rest and relaxation.–Daxim L. Lucas

Semicon IPO

Phoenix Semiconductor Philippines Corp. (PSPC), a Korean-owned semiconductor manufacturer operating in the Clark Freeport Zone in Pampanga, has priced its initial public offering at a hefty discount to peers.

At its IPO price of P3.15 a share (reduced from the earlier price ceiling of P3.76 apiece), PSPC’s stock debut was set at a price-to-earnings (P/E) ratio of 9.5 times 2014 earnings and 8.6 times 2015’s, while peers like Integrated Microelectronics Inc. and Cirtek Holdings are trading at 15-20 times, and regional peers at around 14-15 times.

A P/E ratio of 9.5 times 2014 means that the investors will pay 9.5 times the amount of money they will earn from each share. A lower valuation may indicate that controlling shareholders are willing to leave some money on the table or give more upside room for investors.

“Around 40 percent [of the IPO allotment] is foreign and the balance is local,” said a source privy to the offering. “Demand is good, and we are looking at long-term holders.”

PSPC is selling 324.76 million shares, half of which will consist of primary shares while the rest are secondary. In case of strong demand, about 134.63 million shares are earmarked for oversubscription option.

The public offering will run from Nov. 10 to 21. Listing on the main board of the Philippine Stock Exchange will be on Nov. 28. Proceeds from the primary offering will be used for the expansion of PSPC’s machinery and production equipment and improvements in its facility this year and next year.–Doris C. Dumlao

Batting for biodegradables

Now that many local government units (LGUs) have banned the use of plastic packaging, paper bags have become retailers’ default packaging material. But not everyone agrees that shifting to paper packaging is the best way to solve ecological concerns behind the use of plastics.

D&L Industries, for one, has been meeting with LGUs and national legislators to pitch for the use of biodegradable plastics. After all, D&L last year teamed up with Japan’s leading chemical engineering company Showa Denko to start producing a new line of “eco-friendly” materials using Bionolle Starcla, a starch-based material which is fully biodegradable and compostable.

Alvin Lao, D&L chief finance officer, stresses that paper isn’t the best option for packaging because it’s not resilient enough to contain heavy stuff. And since paper comes from trees, demand for pulp will only result in the cutting of more trees, he says.

He argues that paper-based packaging is also 10 times more expensive than regular non-biodegradable plastic packaging.

On concerns that plastic materials are clogging rivers and sewerage systems in the metropolis, Lao says this can be addressed by educating people on proper waste disposal.

But realistically, Lao says, it may take a while for the Philippines to follow the likes of Japan and Italy which are now embracing biodegradables.–Doris C. Dumlao

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