Strategic shift: How PHINMA transformed itself
(This article should have been part of the MB 119th Anniversary Supplement on February 2, 2019 but was left out for some reason or another – Editor)
Founded by three visionaries Ambassador Ramon V. del Rosario, Sr., Don Filemon C. Rodriguez, and Ernesto O. Escaler, PHINMA Corp. held on its industrial primacy in the country that spanned four decades.
Its story started on May 11, 1957 when the newly-formed Bacnotan Cement Industries, Inc. (BCII), under the leadership of Philippine Investment Management Consultants (PHINMA), Inc., purchased the cement plant of the Cebu Portland Cement Company located in Bacnotan, La Union.
BCII, together with its subsidiary-sister plants (Central Cement Corp., Davao Union Cement Corp. and Hi Cement Corp.), became the foremost producer of cement in the Philippines under the brand name Union Cement.
BCII pursued other industries. In 1963, it ventured into the manufacture of galvanized iron sheets with its first steel plant in Poro Point, La Union. This spawned a galvanizing company known as Bacnotan Steel Corporation (now Union Galvasteel Corporation).
It also invested into oil exploration that snowballed into other energy projects such as coal mining and energy generation.
On October 24, 1969, Bacnotan Cement Industries, Inc. was renamed Bacnotan Consolidated Industries, Inc.
Through the efforts of Mr. Ramon R. del Rosario, Jr., BCII and PHINMA partnered with A. Soriano Co. and Benguet Corporation in 1989 to transform Anscor Capital Corp. and launch the Asian Savings Bank, later named Asian Bank into a commercial banking institution.
The group continued to make its way into the industrial sector and in 1971, BCII and its affiliates ventured into the paper and packaging business with the United Pulp and Paper Company (UPPC) in Calumpit, Bulacan.
The biggest and most advanced paper manufacturing facility in the Philippines was in joint venture with Thailand’s Siam Cement Group. Its strategic partner bought out the interest of BCII later on.
Year 2004 was a big milestone when BCII and Atlas Cement Corp. (ACC) sold their investment in the cement business to Holderbank (now Holcim).
This marked the end of more than four decades of industrial primacy and the beginning of a new journey into the services sector.
In the same year, PHINMA and BCII acquired a controlling interest in Araullo University, its maiden investment in the education sector. Now, they have a network of universities, including Cagayan de Oro College Inc., University of Pangasinan, Inc. in Dagupan City, University of Iloilo and St. Jude College Manila.
But Phinma did not abandon totally its love affair with the manufacturing sector. It continued its steel roofing business and is planning to go back into cement production.
It ventured into cement trading in 2005 under Philcement Corp.
It also looked at other services sectors that are considered the way to the future. Phinma successfully forayed into hotels, the BPO sector and is focusing on the renewable energy sector.
To align it with the name of its parent company, Bacnotan Consolidated Industries Inc. was renamed PHINMA Corporation (PHN) in 2010, a company listed at the Philippine Stock Exchange..
The transformation was seamless because they ventured into industries where they have their own interest and expertise.
“Not difficult because it is an industry we know. So we are comfortable, we are into the roofing business which is the same channel as we become a one stop shop from foundation to roof,” said Eduardo Sahagun, president of PhilCement Corp., the cement trading arm of Phinma, and Union Galvasteel Corp.
There are challenges though, Sahagun said, but nothing insurmountable because they have the right people.
In fact, Phinma now has a better hold of its vision of “Nation Building” and is pushing forward to further contribute to “Make Life Better.” Their infrastructure business, especially its RE power and construction units all contribute to the fulfillment of these goals.
One notable contribution to nation building is its foray into the education sector.
True to its commitment to bring quality but affordable education to the provinces, Phinma has been decreasing its tuition to 115,000-120,000 a semester while increasing the salaries of their teachers.
Its schools are already producing topnotchers in board exams and bridging the gap between Manila and provincial students. They now have 70,000 enrollees. They have also expanded a training center in Myanmar and soon in Indonesia. “That makes me proud,” said Sahagun.
MICROTEL, its chain of budget hotels, is expanding in strategic areas. Microtel gives first class accommodation, helps promote tourism, and at the same time bring in lots of jobs. It is giving up its traditional energy power projects as it focuses on clean energy sources to help the environment.
“All of these are aligned with our vision,” said Sahagun, who once served as executive assistant to Ambassador Del Rosario.
According to Sahagun, apart from the late Senator Ninoy Aquino, who believed in Filipinos, its founder Ambassador Del Rosario also felt the same.
“We believe in the Filipinos so we invest in very strategic areas,” said Sahagun.
Peter Angelo Perfecto, Phinma director for corporate communications, noted that the company’s investments are all key levers of global growth. “We are consistent with the Phinma’s story, after the war we tried to respond by investing in industries that are key levers of growth. These investments are key to our global competitiveness,” said Perfecto. “And we will come out more of that story as we expand in construction and education because our strength is our expertise. We look at education as our strongest,” said Perfecto.
Education runs in Phinma’s DNA. Phinma Vice-Chairman Dr. Magdaleno B. Albarracin, Jr. is a member of the Board of Regents of the University of the Philippines (UP) as well as Board of Trustees of U.P. Engineering Research and Development Foundation, Inc.
Now Dr. Chito B. Salazar leads Phinma education. Phinma itself continues to put its people to higher education.
Phinma President and CEO Ramon del Rosario Jr. is also heavily involved with De La Salle University and spearheads the Philippine Business for Education.
“Ramon continued with that legacy not just in nation building but stretched that to ‘make life better’,” said Sahagun. “Our solar projects are transformative as we supply energy to remote communities,” said Sahagun, who also heads Phinma Solar Energy Corp. “We supply from foundation to roof and on top of the roof,” he pointed out. “Today, Phinma is transformational for family to help young Filipinos perform better in life, to provide roads in front of them.”
Phinma continues to transform in the most productive way and become a better corporate citizen.
“You cannot compromise your vision and values. That is why we’re happy to work and we have the passion to improve people’s lives not only for people who work with us but for everyone,” said Sahagun.
Phinma now employs about 5,000 people.
What is important is that the current leaders of Phinma led by Ramon del Rosario Jr. know what they are doing, governed by the values and polished character and are equally passionate as their founders.
When asked if their predecessors would have been prouder of the company that it is now today, Sahagun said with all certainty, “Am sure!”