Lucio Tan III finds his place, gets into the local groove
The calendar of Lucio Tan III, chief operating officer and vice chair of the P94-billion conglomerate LT Group Inc., does not have a lot of blank spaces.
Two days are spent at Philippine National Bank (PNB) office on Macapagal Boulevard Pasay office to check on PNB and Philippine Airlines. Wednesdays usually find him at PNB Makati to get updated on the other companies comprising the Tan group that has interests in various sectors including banking, beverages, agriculture, property development and tobacco distribution.
Thursdays, meanwhile, are devoted to leading rum manufacturer and distributor Tanduay Distillers Inc. Then on Fridays, he works from the Quezon City home he shares with his grandfather and LT Group founder Lucio Tan.
Throughout the work week, he also sets aside chunks of time for online meetings and gym workouts that are as necessary to him as breathing. Weekends are a little less hectic but still not free from work due to the sheer volume of documents that he needs to study, leaving not much time left for the social life typical for single men his age.
“I’m really just too busy,” Tan explains.
Not that the 30-year-old executive is complaining, as he considers his extra tight schedule another welcome indication that the conglomerate that had been challenged heavily by the COVID-19 pandemic is well on its way to a strong recovery, in step with the Philippine economy.
All worth it
The figures are encouraging as at the end of September last year, the LT Group’s net profit surged to P20.41 billion, more than double the P9.95 billion recorded in the comparative period the previous year and exceeding the year-end 2021 figure of P20.25 billion, with its tobacco and banking units delivering the bulk of the revenues and income.
Total revenues and profit would have been even higher were it not for the surge in the prices of raw materials as well as supply chain issues that caused expenses to balloon. But given that inflation is expected to have peaked last December, cost pressures should ease, putting the conglomerate in a position to post an even higher profit this year.
Indeed, the younger Tan, was tested during the pandemic.
He had to prove that he had the mettle and commitment to do his share to ensure that the group would survive the worst of the effects of the unprecedented pandemic that battered sales and forced affiliate Philippine Airlines into rehabilitation proceedings.
With more than a little help from his family and the management teams across the group, Tan was able to weather the worst of the pandemic storm.
He can thus afford to smile more often these days, secure in the knowledge that decisions and moves made by the management team manning the different companies that comprise the LT Group since he took over key posts in the conglomerate are bearing fruit.
Tan is particularly proud of the performance of rum maker Tanduay Distillers Inc., which was closest to his father’s heart and where he has been CEO since 2019.
By tweaking the manufacturing and distribution processes, the spirits company behind the Tanduay brand was able to bring down costs and strengthen its hold on its market.
Tanduay’s figures showed that as of end-September last year, its nationwide share for distilled spirits went up to 30.7 percent, a healthy increase from 26.6 percent at the end of 2021. In the Visayas and Mindanao where most of its sales are generated, it held a formidable share of 69.8 percent and 79.4 percent, respectively, an improvement over 66.9 percent and 74.3 percent at the end of 2021.
Tan says the challenge moving forward is to make greater inroads in Luzon, which is the bailiwick of its competitors in the growing distilled spirits industry.
The computer engineer from Stanford University is also looking forward to unlocking more values out of PNB, which he says has a lot of room for growth as the economy emerges from the COVID-19 pandemic.
“There is a lot of untapped potential there,” says Tan, adding that the brand nurtured over the past 70 years could be leveraged to venture into the growing consumer market to complement its strength in the institutional and overseas markets.
Tan has developed a deeper understanding of the Philippine market and has become more comfortable in his positions three years after he abruptly left a promising career as a software engineer in the United States and came home to take over responsibilities left behind by his father, Lucio “Bong” Tan Jr. who died unexpectedly in 2019.
Before he moved back to the Philippines, Tan was a software engineer on the payments team of Lyft, a San Francisco-based ride-sharing giant. Before that, he interned at technology giants Facebook and Apple, after graduating summa cum laude with a double degree in electrical engineering and computer science from Stanford University. He was even a recipient of Frederick Emmons Terman Engineering Scholarship Award, an annual citation given by Stanford’s School of Engineering for outstanding academic achievement.
The insights and experience from working in innovative American companies plus the results of operations over the past year give Tan more confidence to eventually take over as expected the role of president of LT Group by April this year, after a yearlong transition and working side by side with his uncle, Michael Tan, who had been president of LT Group since the holding company was set up nearly a decade ago.
Expectations are high and speculations in the market remain over whether Tan, given his youth and lack of seasoning in the local market, has what it takes to fully take over the conglomerate that employs over 15,000.
But the encouraging numbers over the past years that count among the most challenging faced by the conglomerate provide a good enough reason to believe that the driven and energetic Tan will be able to prove his doubters wrong and take LT Group in new directions.