Wilcon shares almost double value in five months
Wilcon founder William Tan Belo shares why he’s bullish about the local construction business
September 21, 2017
Interview by Judith Torres
Photographed by Ed Simon
21 Sept 2017 — Wilcon Depot marks its 40th year in the construction supply industry with an anniversary promo. The 40 Years Raffle Promo is set to give away up to ₱ 1.6 Million worth of prizes to forty lucky Wilcon customers. Another celebratory announcement was made during the launch of promo yesterday. Director and CEO Lorraine Belo-Cincochan updated us on progress since the company became public last March. The initial public offering of ₱ 5.05 per share is almost doubling its value, peaking at ₱ 9.70 this year. Wilcon shares opened at ₱ 8.98 today.
The retailer was the country’s leading depot in 2015 in terms of net sales amounting to ₱ 14.45 billion and market share by sales of 56%. Wilcon has 39 stores nationwide, with plans to put up five more by the end of 2017.
In an exclusive interview with BluPrint, Wilcon founder and chairman emeritus William Tan Belo shares why he’s bullish about the construction business and the Philippine economy, and what other promises to its shareholders his 40-year-old company intends to keep.
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What can Wilcon’s shareholders expect? What’s the promise? Profitability, of course. That’s always number one. Our promise is also to be world-class—to continue sourcing the best products and to have the most helpful and knowledgeable people. Best products in the market mean products that are safe; whose manufacturers observe sustainable practices. As a big player in the industry, it’s not enough for Wilcon to play a role in improving the economy. We must also be eco-friendly. We take care of the environment because the planet is not enough to provide all the resources everybody needs. We conserve so the next generation can share in the blessings we enjoy today. Doing the IPO was also a decision to share—to not confine the company’s blessings within the family, but to open it to the public.
How will it change the business? The way we do business won’t change much. The same people will be running the company. The significant change is everything will be more transparent—the recording and the reporting will now be open to the public. For the past few years, we have been professionalizing our operations from sales and marketing to the support departments, accounting, and finance, all jiving to be at par with publicly listed companies. We invested ₱ 200 million in upgrading our business software to achieve exceptionally accurate inventory reporting. The superior system allows us to identify trends, make informed decisions about which product to carry and not to carry, reduce dead stock, increase inventory turnover, and improve customer service. The company will work far better than ever before as a privately listed company. The other significant change is the funds we generate will enable us to accelerate the expansion of our stores. Since 2008, we have been opening an average of three branches every year. Think how much more we can do after the IPO.
How much more? The Company plans to expand in the following locations: Cavite, Zamboanga, Iloilo, Tacloban, Cabanatuan, Bicol, General Santos, Davao, Lucena, Isabela, Tagum, Tuguegarao and Surigao. By then, we should cover the entire Philippine archipelago practically. The vision is to continue opening new branches where we don’t have any presence, to service people in those areas. This is good not only for our business but also for the local economies. It provides jobs, and instead of having to source construction supplies from the National Capital Region, where for the longest time most businesses have been concentrated, local businesses will now have access to the right products in their area, and they save on transport costs. This is also consistent with our vision of helping the environment reduce its carbon footprint.
What indicators, in particular, make you bullish about the Philippine economy? We’ve been in the business for 40 years. We’ve seen the ups and downs of the economy from the Martial Law years until now. We saw the peso value plunge from ₱ 9 to the dollar to ₱ 50-something to the dollar, and we’ve seen interest rates go up from 14% to 45%. The stability we have been enjoying for the past several years is remarkable. Our interest rate remains at an all-time low. The Philippines is awash in money. Many businesspeople are liquid. You see BPOs opening down south, no longer just in NCR, but also in Cebu, Iloilo, and Davao.
“The C, D, and E (demographic)—that’s who we have to take care of now. In fact, we don’t have to do anything for the A and B.”
How about the construction industry? The growth in construction per annum is higher than the growth of the economy as a whole. It’s one of the growth engines of the economy, as it has contributed an average of 5.6% to the country’s Gross Domestic Product (GDP) from 1990 to 2015. There was a slowdown in 2011, but the sector bounced back and has been on an upward trend in the last ten years. In 2014 and 2015, the construction industry contributed 6.4% and 6.9% to the country’s GDP, the highest in decades. We are well positioned to take advantage of the positive outlook of the Philippine home improvement sector, and with the IPO, more so.
Will acquisitions be part of your expansion plan? There have been several companies that have reached out to us already. There are many possibilities and opportunities to diversify, but it’s a little too early to discuss that now.
Do you believe life will get better not just for the A and B markets but also the C, D, and E demographic? The C, D, and E—that’s who we have to take care of now. In fact, we don’t have to do anything for the A and B.
Give us an example of the advice you give. One thing I always stress is credit and credibility. Once a company gives you credit, make sure when you promise to pay it back in 7 days or 30 days that you do so. Always pay on time! The problem with a lot of small businessmen, once they get the loan or get the things they need, yung pagbabayad nakakalimutan na. And when that happens, they won’t be able to get a second credit.
Last words? We look forward to a very good 2017 and the years to come. Let’s all do our share to help the country. You don’t have to be a part of a big organization. When you go out to communities, you see what people need; some of them may have small businesses. Help them out; give pointers. Volunteer your time. Also one of the biggest concerns is the environment. Let’s conserve it. We in the construction industry should do our part. Stores, architects, designers, builders–let’s all do our part.
This interview first appeared in BluPrint Volume 1, 2017. Minor edits have been made for Bluprint.ph.
On its 40th anniversary, Wilcon brings your shopping experience into a whole new level with Wilcon 40 Years Raffle Promo! Customers can join the promo by shopping at any Wilcon branch nationwide from October 1-31, 2017. Every P5,000 cash or card purchase in a single receipt entitles customer to one raffle entry, where they get a chance to win P40,000 worth of Wilcon e-GCs. Electronic raffle draw is scheduled on November 7, 2017. Visit any Wilcon store near you or www.wilcon.com.ph for more details. Like and follow them on Facebook and Instagram @wilcondepot.ph. Per DTI FTEB Permit No. 11398 Series of 2017.