China's economic reform and opening-up has turned entrepreneur Carlos Chan's Liwayway Group into one of the country's largest and trusted foreign corporations. Willa Wu reports.

The Oishi Shanghaojia brand is one of the most widely-respected and recognized brands in China - a remarkable success story of how the country's economic reform and opening-up policy has pulled in foreign investment.

The company, renowned for its snack foods, is a part of the Chinese miracle - brought here by Carlos Chan, a Chinese Filipino, who is today ranked No 21 on the Forbes list of the Philippines' 50 wealthiest individuals. The tycoon shared the secrets of his success with China Daily.

Chan set up Oishi's first overseas plant in Pudong, Shanghai, in 1993, in cooperation with two State-owned companies. He gave his brand the Chinese name - Shanghaojia, which literally means "excellent, top grade and high quality".

The auspicious name didn't bring much luck to Chan at the beginning. He had to wait for nearly half a year for the plant's operating license to get the nod.

Then, no sooner had the plant opened when it looked like his fledgling enterprise was bound for disaster.

Chan got a phone call from the manager of his newly-established Oishi plant in Shanghai.

"I'm afraid we have to leave the China market," Chan recalled his plant manager telling him. "The employees here won't cooperate with us."

Chan answered: "I will come and talk to them." He had already learned valuable lessons, working shoulder by shoulder with his father in the family business - "be patient" and "make friends before doing business".

The entrepreneur recalled the tense atmosphere as he walked into the meeting with the plant's Chinese workers. "They were all standing, red-faced. I wasn't allowed to sit either." Chan stood for almost an hour listening to his employees' complaints.

The workers had been hired from two State-owned companies that had leased the factory to the Filipino group.

"They were dissatisfied with the management. We were foreign employers. They thought we were capitalists, intending to exploit them. It was an ideological issue," Chan said.

Talking slowly, Chan described himself as "a shy man", something he had to overcome to follow his father's advice to be patient: "That to me, means having an attentive ear and talking to people regardless of their background."

Chan heard the workers' complaints and answered them. Tensions eased. Chan was invited to sit down. The Chinese Filipino employers and their Chinese workers started calmly discussing how to build mutual trust.

Chan ordered annual increases in their salaries. The workers had been earning only 200 yuan ($29) per month in the first place. He installed heaters in the staff canteen. "We needed to let them know we cared about them and not treat them like mere laborers."

Chan's communicative management style has imprinted his corporation. "We've maintained good relationships from top management down to frontline workers. Every decision is made after we put everything on the table to discuss," said Desmond Cheng, the plant manager of the corporation based in Cavite City, Philippines.

Chan's style won him loyalty from his staff and business partners. Cheng joined the company in 1996 and has worked for the group ever since. In his eyes, Chan is a "good and down-to-earth boss" who is always ready to talk to employees and willing to help whenever they need it.

According to Cheng, many of the employees with Chan's Liwayway Group of Companies in the Philippines are like him, having worked with the group for more than 20 years. "They view the company as their family, willing to build their entire career here," Cheng said.

It was 1994 when Oishi's Shanghai plant produced its first lot of prawn crackers. Chan recalled the trucks waiting outside the plant to deliver the crackers to distributors across China. "We faced little competition in China. We managed to cover the initial cost in the third year after we entered the Chinese market. Demand exceeded supply," Chan noted.

There's also loyalty among Liwayway's dealers in China. Many of the 700 wholesale distributors have maintained partnerships since the group entered China in the early 1990s.

"I often told my dealers that without Deng Xiaoping, Oishi would not have what it has today," Chan said.

Thus, the reform and opening-up policy became the catalyst, helping to create one of China's largest and trusted corporations.

Deng, the architect of modern China, put forward the reform and opening-up policy in 1978, allowing the once reserved country to open its doors to foreign investment. The policy has lifted around 700 million people out of poverty and has been the driving force behind the Chinese economic miracle.

Eight years after Oishi Shanghaojia was nearly forced to close, it became the first non-Chinese company to win the Shanghai Famous Brand Award. It's an honor given to brands ranked among the top five in their respective industries, and which have earned broad consumer trust. In 2006, Oishi Shanghaojia won the additional honor of being recognized as a "China Famous Brand".

Today, Oishi Shanghaojia snacks can be found everywhere, in small convenience shops or large supermarkets all over China. The company, now in its 25th year in China, has 15 plants across the country. The company's products are distributed throughout the country by over 700 wholesale distributors.

Data from Liwayway show that, currently, Oishi's market share accounts for 26 percent among similar products in China.

Oishi's success story began in the Philippines in 1946 when Chan was only 5. His parents, immigrants from South China's Fujian province, founded Liwayway Marketing Corporation in Manila, the capital city of the Philippines.

The company started out repackaging products like coffee and starch. It then began manufacturing products for the local snacks market. In the 1970s, the company started producing Oishi Prawn Crackers, making it a market leader in the local industry.

The family had held on to its Chinese roots. Chan was raised in a traditional Chinese family setting heavily immersed in Confucianism. The idea of contributing to the land of his ancestors was planted deep.

Chan attended Chinese schools in the Philippines. He is proficient in spoken and written Chinese and even gave himself a Chinese name, Shi Gong Qi.

Chan had dreamed of becoming a painter. He was majoring in architecture in college but, as the eldest son, he dropped out to help out with the family's growing business.

Chan got his entre to Shanghai through the movies he watched when he was a kid. In those movies, he saw it as a lively, vibrant place - a place that would be ideal for business.

He'd been considering entering the China market since the mid-1980s. Ten years after the company produced its first bag of Oishi prawn crackers, it was facing increasing competition from local rivals. He got little encouragement from people who knew the market, or thought they did.

"Many told me it would be hard to profit from the China market. People there were poor," Chan said. "So you mean they don't have one or two yuan at all?, I asked people who turned the stoplight on my go-to-China proposal," Chan said.

He wasn't willing to give up and decided to see for himself. He was determined to crack the Chinese market. In the late 1980s, he started making frequent visits to Shanghai. There was no direct flight from Manila to Shanghai. He had to change planes in Hong Kong and often enough, he was the only passenger in business class.

Chan's first direct experience of Shanghai proved a disappointment to him.

"It was under-developed. Roads were shabby and people all wore the same color - blue," the magnate said. But he hung on and learned about the local market and the country's legal system.

Recalling his initial days in Shanghai, Chan said one of his most memorable moments was the time he drove his Mercedes-Benz in Shanghai shortly after he opened the plant.

"There were few cars on the road at that time, let alone a luxury car. You could feel the people's eyes all fixed on you.

"But now things are different. I watch others' cars on the road in Shanghai. The city has advanced a lot."

Shanghai, where Chan's business empire in China started, became the first city in the country to post a 3-trillion yuan ($469 billion) GDP in 2017, and is on its way to becoming one of the world's major financial centers by 2020.

With its successful experience in China, Liwayway expanded its snack business to other markets, including Myanmar, Thailand, Indonesia, Cambodia, India and South Africa.

"My roots are in China," Chan said. "The Philippines is my home too. It has accommodated my family and given opportunities for us to thrive."

The mogul's love for both countries propels him to act as a bridge between China and the Philippines. Three Philippine presidents, including incumbent leader Rodrigo Duterte, have named Chan as a special envoy to China.

Talking about that role, Chan said his main task is to bring the two countries closer together. He has initiated many sisterhood pacts between provinces and cities of the two countries, including Bohol in the Philippines and Jiangxi province in China, Cavite in the Philippines and Anhui province in China, and Palawan in the Philippines and Ningxia Hui autonomous region in China.

After the deadly magnitude 8 earthquake struck southwest China's Sichuan province in May 2008, Chan donated 13 million yuan ($2 million), including 1 million yuan worth of Oishi products, to the affected areas.

He also paid for 100 high school students from the devastated areas to go to the Philippines to help them recover.

"I believe when someone dies, he or she, standing in front of God, will inevitably be asked: What have you done in your life?

"I think I've prepared myself for that question. Life is short. Live it not only for yourself, but also for society when you're able."

Chan now spends half the year in Manila and the other half in Shanghai. He is a man of few words, but plenty of action. At the age of 77 and having seven grandchildren, he's still energetic when it comes to expanding Liwayway's market map. That way, the billionaire is satisfied that he's not wasting time.

Contact the writer at

willa@chinadailyhk.com

(HK Edition 09/28/2018 page9)