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real stories on Cebu's business landscape…

Retailer does direct selling

Sun.Star Cebu <> Friday, October 31, 2008

BY NANCY R. CUDIS, Sun.Star Staff Reporter

A FASHION retailer finds opportunity in direct selling as malls and department stores are becoming “a bit challenging” for the retail industry due to the global economic crisis that is pushing consumers to become conservative spenders.

“We have always been into brand retailing. We are strong in what we do. We are now in malls and department stores but direct selling is a distribution strategy for us to reach out to other potential customers,” said Bernie Liu, chief executive officer of Golden ABC Inc. that owns popular apparel brands Penshoppe, Oxygen, Memo and Forme.

After more than a year of extensive research, his company launched Red Logo, a wholly-owned direct selling subsidiary of Golden ABC, last April when “things started to slow down.”

In the process, Liu said that micro-entrepreneurs can augment their family income with their new distribution mechanism that carries “sustainable” products and gets support from the company.

“The market response is doing very well. We generated more than 10,000 dealers in less than six months since we launched it. That is pretty good for a start-up business strategy,” Liu told reporters last Wednesday during the general membership meeting of the Philippine Retailers Association (PRA) Cebu.

Red Logo’s first four branches are located in Metro Manila, catering to a nationwide market. Liu said that Red Logo may put up a branch in Cebu sometime next year to cater to the Visayas market.

Challenging

The Red Logo catalogue carries it own brands like Fuel and Agenda, but also allows Penshoppe, Memo and Forme to be its guest brands for a certain period.

“In the brick and mortar (meaning infrastructure), malls and department stores are a bit challenging right now (for us) because of the global crisis that slows down consumer spending. Direct selling, on the other hand, is flying. While the crisis is a problem for one (sector), it is also an opportunity for another,” Liu said.

He said companies can take advantage of the slowdown by lowering retail prices.

“Expand strategically. Companies need to set their sights globally while at the same time seizing opportunities in real estate in their own backyards. Retail expansion through directly-owned or franchised stores presents numerous opportunities (such as) negotiating better prices with malls regarding rent,” he told members of PRA Cebu Chapter.

He stressed that the crisis is not an excuse for a retailer to slow down as well, especially if he has the resources.

Golden ABC now manages about 400 stores nationwide, including outlets in department stores. The company is in negotiations with interested franchisees who want to open stores overseas.

At present, Golden ABC has four stores in Saudi Arabia and three stores in China.

Filed under: Feature,

Alliance vows to promote wider use of open source tech in Asia

Sun.Star Cebu <> Thursday, October 30, 2008

BY NANCY R. CUDIS, Sun.Star Staff Reporter

THE alliance of Asian governments can further promote the use of open source software in the region.

Nine member-countries of the Asia Open Source Software Center (AOSSC) last Tuesday signed a memorandum of cooperation that indicates their mutual understanding to promote open source software (OSS) in the region.

Those who signed were information technology officials or representatives of OSS centers from China, Hong Kong, India, Japan, Macau, Malaysia, Philippines, Singapore and Thailand. Representatives from Indonesia, Pakistan and Vietnam were not present during the signing, however.

The scope of AOSSC’s alliance will include human resource development, conferences, seminars, workshops and regular meetings, among others.

The first project of the AOSSC after the signing of the memorandum would be the development of a website that will host a database and venue for knowledge exchange.

“There are so many challenges in promoting open source software that is why we have to work together,” AOSSC 2008 chairman Gordon Lo said during the group’s morning meeting at the Plantation Bay Resort and Spa last Tuesday.

Challenges

Although open source software can be shared without cost, Lo said the challenges of promoting OSS include piracy, and getting more people to be trained and to work in OSS-related applications.

“Developing countries like Cambodia and Vietnam are (more keen about) using OSS because it is strategically low-cost for them than (for) more established countries like Japan or Hong Kong,” Lo noted.

He added that economies have different demands, as far as OSS is concerned.

China, for instance, has a government that is very conscious about software security and is very active in promoting OSS due to its very big market, Lo noted.

In the Philippines, OSS remains to be an open choice, depending on the user requirement. This leaves the market to decide weather to use OSS or proprietary operating systems, like Windows.

“Our government is very heterogeneous. Local government agencies and units have different situations and needs. We have to assess if they are capable for OSS. In our experience, we realized that since OSS is not as common as the proprietary software, the skill for OSS is not common as well,” said Angelo Timoteo Diaz de Rivera of the Commission on Information and Communication Technology-National Computer Center (CICT-NCC).

He lamented that after CICT-NCC has trained individuals as administrators of OSS solutions, some of them would either be pirated by local companies or would get hired abroad.

“Again, it’s a law of supply and demand. While we don’t want to deprive them of the privilege of working wherever they chose, we are continually faced with the lack of human resources and the problem of sustainability for our OSS projects,” he said.

For his part, Bonifacio Belen, executive director of the Cebu Educational Development Foundation for Information Technology (Cedf-it), said that the cooperation of various Asian countries already provides a network that can be tapped in terms of training and resources for future conferences and events.

“In collaboration with the governments in these countries, AOSSC opened the doors for OSS to penetrate a wider and bigger market,” said Belen, who was an observer during the group’s meeting.

Filed under: Business,

Cebu-grown coffee shop firm to spend P10M for re-branding

Sun.Star Cebu <> Wednesday, October 29, 2008

BY NANCY R. CUDIS, Sun.Star Staff Reporter

TO set it apart from the coffee brands entering the Cebu market, a homegrown coffee company will be gradually implementing changes in its outlets and franchises in the next two to three years.

These changes, which will be evident in the logo, signage, interior design and expanded menu, are part of the whole re-branding of Coffee Dream Company Inc.

“There is a certain connotation about coffee shops having to look the same. But the market is getting more sophisticated and is looking for something different,” explained Coffee Dream president and founder Glenn Anthony Soco.

He added that the company is taking the global economic slowdown as an opportunity to develop its own niche, even when he observed that the “resilient” consumer market is not so affected by what is happening.

All 32 Coffee Dream stores nationwide, including the 13 franchises, will soon be transformed into “more casual, more cozy and more modern” hubs—a transformation that will cost the company an estimated P10 million.

Pilot

Soco wants the changes first implemented in its stores in Cebu. The Coffee Dream in Parkmall in the Mandaue North Reclamation Area, which is the 10th in Cebu and the 32nd in the country, will be the pilot shop for the company’s re-branding efforts.

He tapped the skills of Cham Lopez, a 19-year-old senior Industrial Design major of the University of the Philippines Visayas Cebu College, to design the coffee shop’s new logo and signage as well as put in her ideas for the new interior design.

Lopez, who is working part-time as a creative director for Coffee Dream, explained that they wanted to create a dreamy and comfortable but clean ambiance for the consumers.

She said that they are targeting to formally re-launch Coffee Dream in Parkmall with its neat interiors, expanded food menu, outdoor furniture and wireless fidelity (Wi-Fi) connection before the year ends.

Soco is looking at the Coffee Dream outlet in Gorordo Ave., Cebu City as the next one for renovation.

As Coffee Dream is pursuing efforts to penetrate a wider market, including the middle-income class that is fast adapting to coffee shop visits as a lifestyle, the company continues to study areas, specifically lifestyle centers and those outside the malls, as new sites.

Filed under: Business,

PAL to spend P80M for hangar expansion

Sun.Star Cebu <> Wednesday, October 29, 2008

BY NANCY R. CUDIS, Sun.Star Staff Reporter

DUE to the global economic slowdown, Philippine Airlines (PAL) is bracing for difficult times in 2009 as the demand for air travel is expected not to hold up as well.

The challenge for the airline company is no longer the increasing fuel prices since the price of oil in the world market has been falling.

In fact, PAL will reduce its fuel surcharge by as much as $20 per international round-trip flight and up to P400 per domestic round-trip flight starting Nov. 3 as a response to President Arroyo’s appeal for transport companies to pass on to consumers the benefits of the decreasing fuel prices.

Despite the global financial turmoil, PAL will pursue plans to improve its services, such as expanding its maintenance and cargo facility in Cebu to enable it to hold more aircraft in the future.

PAL president Jaime Bautista said that Cebu is already home to its turbo prop fleet of Q300 and Q400 aircraft used to service Pal Express operations from Cebu to various provinces in the Visayas and Mindanao.

While two to three of the aircraft are currently housed in a 1.2-hectare property in Cebu, PAL is planning to lease an additional 6.6 hectares of land at the Mactan-Cebu International Airport (MCIA) for a minimum of 25 years.

PAL already started negotiations with the MCIA Authority (MCIAA) in the first quarter of this year.

“We requested MCIAA to give us an offer to lease the lot and they asked for the details of our maintenance facility project for them to evaluate. Talks are still ongoing,” said Bautista.

Once approved, PAL will implement the plan in the next couple of years using a budget of over P100 million.

Flexibility

“Having a maintenance facility in Cebu will give us flexibility in terms of schedule. If there are planes based here, then we can leave early out of Cebu,” Bautista explained.

Also, with the reopening of the Cebu-Osaka link that will make use of an Airbus 320, he said that there is a possibility the aircraft will be based here.

They will also need the expanded area if they pursue plans to mount a flight connection from Cebu to Singapore, he added.

PAL has an existing hangar in Cebu and the company plans to expand and improve it within a year’s time using an P80-million budget.

PAL, which has about 7,500 regular employees, continues to acquire new aircraft. It is expected to operate a total of 50 airplanes by 2012.

Filed under: Business,

Former slum area dweller now builds homes for others

Sun.Star Cebu <> Tuesday, October 28, 2008

BY NANCY R. CUDIS, Sun.Star Staff Reporter

A BUSINESSMAN’S past experience as a resident in a slum area during his childhood years has moved him to buy foreclosed properties when he has the money.

All Danilo Ortiz wanted at that time was security for his wife and three children. But little did he know that he would be converting these properties into low-cost residential communities so that other families would also have a stable home of their own.

Ortiz, 49, worked as a furniture draftsman in an American firm for eight years before he decided to put up his own furniture export business in 1996, which would enable him to spend more time with his family.

He was surprised that the demand was high, oftentimes reaching five containers a day when he only expected one to two containers to cope with basic needs.

With the business at its peak, Ortiz used the extra money to buy foreclosed properties in Lapu-Lapu City, and Liloan and Consolacion towns.

An encounter with a developer regarding property acquisition encouraged him to build a subdivision of his own, especially since he is also passionate about architecture and interior design.

In 2003, Joanna Legacy Homes Inc. (JLHI), with Ortiz at its helm, was registered with the Securities and Exchange Commission as a local player in the real estate industry.

It completed its first project, a community with 136 units, in Yati, Liloan the following year.

Ongoing projects include Joanna Homes in Sudtungan, Lapu-Lapu City (302 units), Palm River in Talisay City (167 units), Prescila Heights in Lawac, Consolacion (190 units), and Beachline Communities in Compostela (296 units).

Eventually, Ortiz trimmed down his export business due to “high demand but low capital” and absorbed some employees into JLHI.

JLHI is now in Phase 1, or 175 units out of 1,300 units, of its biggest project so far, the Grand Terrace in Casili, Consolacion.

It is currently eyeing a 6.7-hectare property in Paknaan, Mandaue City, a four-hectare lot in Tagbi-laran City, Bohol and a five-hectare area in Surigao.

“There is no problem with the market. Our buyers, about 98 percent of them, are Pag-Ibig Fund members, and love our quality and affordable homes. And the demand for low-cost houses is continually growing,” Ortiz said.

About 600 interested buyers have already listed their names with JLHI for follow-up for its ongoing and future projects.

As a developer, though, he is worried about the unstable prices of construction materials. But he assured buyers, including potential ones like working couples and starting families, that JLHI does not adjust the prices once the sale has been
booked.

The current prices of the units range from P850,000 to approximately P1.5 million, depending on the location of the subdivision and the lot size.

Ortiz is contemplating venturing into a construction supplies business as his team continues to provide a home as a legacy for every Filipino.

Filed under: Business,

PAL returns to Cebu-Osaka route

Sun.Star Cebu <> Tuesday, October 28, 2008

BY NANCY R. CUDIS, Sun.Star Staff Reporter

MARKET demand has dictated the decision of Philippine Airlines (PAL) to finally reopen the link connecting Cebu and Osaka, Japan.

More than seven years after the flight connection was halted, PAL re-introduced the Cebu-Osaka service last Sunday at Marco Polo Plaza Cebu.

“We are responding to the persistent demand by Japanese travelers and local hoteliers to open the route to encourage frequent travel between Osaka and Cebu,” PAL president Jaime Bautista told reporters.

This will make Osaka another major market for tourists and investors, and Cebu, a leisure destination for the Japanese, he added.

The Cebu-Osaka service was first introduced in 1994 but was discontinued in October 2001 when Japanese government travel advisories were issued in the wake of the Sept. 11, 2001 terrorist attacks on the United States, discouraging the Japanese from traveling and weakening the tourist market.

Slowdown

However, Bautista noted that even before the tragedy, the Asian financial crisis in 1997 had resulted in a slowdown in the market and prompted PAL to close some flights and reduce frequencies to many destinations. Eventually, the Cebu-Osaka line was affected.

Despite the ongoing global economic crisis, PAL is optimistic that more and more local and Japanese travelers will take advantage of the renewed service for leisure and business purposes.

Department of Tourism (DOT) 7 Director Patria Aurora “Dawnie” Roa said the government will do its part by organizing familiarization tours with PAL’s help for the Japanese working class.

The Cebu-Osaka flights will initially operate twice weekly—Thursdays and Sundays—on a newly delivered Airbus A320 aircraft that has the capacity to accommodate 12 passengers for business class and 144 for economy class.

Expansion

“We have decided after careful review to pursue a selective expansion of our operations that started several years back.

This is marked by the newly completed modernization of our domestic fleet and acquisition of additional airplanes,” Bautista said.

PAL started this acquisition in 2007 with a P1.2-billion budget. The airline company is expected to operate a total of 50 aircraft by 2012, including new planes.

“We have 45 aircraft now. Some planes are leased so we will return them to their owners, while some will be sold as there is also a demand for second-hand aircraft by Third World countries,” said Bautista.

Tokyo

PAL also operates a six-times-weekly service between Cebu and Tokyo, Japan as well as a four-times-weekly service between Cebu and Seoul, Korea.

Once the downgrading of the Philippines to a Category 2 rating by the US Federal Aviation Authority is lifted, PAL is planning to mount additional flights from Cebu to the United States.

Under Category 2, PAL is barred from increasing its 33 flights a week to the US and from changing the type or increasing the number of aircraft used on these routes.

PAL is also studying the possibility of opening up a link between Cebu and Singapore. After a Manila-China flight connection will be well-established, PAL might also study the prospect of having a Cebu-China link, said Bautista.

Filed under: Business,

‘Stay calm,’ Philam arm to clients

Sun.Star Cebu <> Monday, October 27, 2008

BY NANCY R. CUDIS, Sun.Star Staff Reporter

TOP officials of Philam Asset Management Inc. (Pami) asked its clients to stay calm and to wait for capital markets to stabilize before they will even think of withdrawing their mutual fund investments.

Pami executive vice president Gina Morales told investors in a meeting last week at the Cebu City Marriott Hotel that various governments are intervening and providing tools, such as bank equity, to boost investor confidence amid the global financial crisis.

When this confidence is built, Morales said that banks will start lending to each other that could contribute to the stability of the world market.

She added that investors will miss the opportunity of higher returns if they will still wait until after the market is stabilized before investing or reinvesting.

“When there is blood in the streets, it is best to start investing,” she said.

Pami’s total assets in management is approximately P17.2 billion at the national level, about P2 billion in Central Visayas and more than P1 billion in Cebu.

Morales and Pami president Karen Roa have been visiting key provinces in the country—Pampanga, Davao, Cebu, Bagiuo and Bacolod—to reinforce what their personnel have been assuring to clients amid the global financial turmoil sparked by the US sub-prime mortgage crisis.

This crisis has affected the American International Group (AIG) which earlier announced to sell its Philippine unit, Philippine American Life and General Insurance Co. (Philamlife), to repay its $85-million loan from the United States Federal Reserve.

Along with other Philam Life affiliates, Pami, a wholly owned subsidiary of Philamlife, has been identified for possible divestment.

Morales, though, admitted that their mutual funds, which are market-driven, have been affected by the poor performance of the stock market.

Pami’s products, such as Philam Bond Fund, Philam Dollar Bond Fund, Philam Managed Income Fund, Philam Fund Inc., Philam Strategic Growth Fund and the GSIS Mutual Fund, are invested in Philippine Government Securities, fixed-income securities of strong local corporations and blue chip stocks.

“At Pami, it’s business as usual,” Roa said. “We have established very good relationships with our investors (such that) they have not only trusted us but also understood this is only a market sentiment and everything will soon settle down,” she added.

Filed under: Business,

WELCOME!

This is a personal site that contains my news articles on Cebu, local tourism, investments, real estate, small and medium enterprises, and many more! Some entries tackle personal thoughts and experiences as a business writer covering the Cebu business community. Enjoy your time here. And I hope to hear from you! -NANCY R. CUDIS

NRC: a Cebuano scribe


NANCY R. CUDIS writes for herself (a pastime), for her family (a source of income), and for the Cebu community (a sense of duty). For inquiries or invitations to cover events related to Cebu, you may contact her through her e-mail: nrcudis@gmail.com.

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