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Web-only Exclusives November 30, 2000 From Our Correspondent: Hirohito and the War A conversation with biographer Herbert Bix From Our Correspondent: A Rough Road Ahead Bad news for the Philippines - and some others From Our Correspondent: Making Enemies Indonesia needs friends. So why is it picking fights? |
INTERVIEW:
A Passion
for Property
THE SON OF CHINESE immigrants from Fujian province, Tan Yu grew up in the Bicol region in the Philippines. At 13, he left grade school to help support his widowed mother. Tan Yu traveled around the archipelago buying and selling T-shirts and textiles. After making his first million at 18, he built four textile mills and acquired real estate. Tan Yu invested in land in Taiwan in the 1970s, when the U.S. cut diplomatic ties with the island in favor of China. His property, financial and hotel empire prospered along with Taiwan's astounding economic growth. Now regarded as one of Asia's richest men, the reclusive Tan Yu spoke with Asiaweek's Antonio Lopez in a rare series of interviews. Excerpts:
ON CHARGES OF INFLUENCE PEDDLING: In the Philippines, I cultivate friendships with people from all walks of life, not just with government officials. I don't ask for concessions from my friends, primarily because I'm in real estate and it is a business where friendships with public officials make very little difference.
ON DEBT: Borrowings equal only about 3% of total group assets. That's smaller than the value of a single property. The [200-hectare] Manila reclamation property and Fuga island were paid for in cash. Now, however, I tell our executives to go borrow. We're undertaking many huge projects. Multinational banks are lining up to lend me money. There's very little money now in Taiwan for lending, while interest rates in the Philippines are rather high. I'm sourcing loans from Europe, Japan and the U.S.
ON WHY HIS COMPANIES ARE NOT LISTED: This is one more proof of our financial strength. We don't need to go public to raise money. If one or two of my companies were to list in Taiwan, they would generate a fortune of anywhere from NT$300 billion [$3.6 billion] to NT$300 billion [$10.9 billion]. It has been my policy not to use other people's money for doing business. I can't say, however, that we will never go public. The group chairman, my daughter Bien-Bien Roxas, knows all about Western management. She may want to do an initial public offering in the future.
ON PROPERTY: At 25, I built my first textile mill [near Manila]. People thought I was doing well because it was such a huge facility. But it didn't make much money. I haven't been to the mill in the last 15 years. It is only land that gives big returns. But you have to consider location, take the long view, be very patient. You may lose initially in development cost, but when the money starts coming in, you're set for life. I buy land, keep it, develop it. Condominium prices may soften, but not land. Land is getting scarce every day. So how can land prices go down?
ON SUCCESS: There's no such thing as luck. Success is all hard work and persistence. When I was a teenager, I had a girlfriend in Bicol. She was the most beautiful girl in town. She had many suitors, some of them fair-skinned and good-looking. She married the ugliest guy in the village. You know why? He went to her house every day, fetched water, cut firewood, cleaned the house. I get scared if I see a competitor working hard because I know he's going to win.
ON THE PHILIPPINES: I believe the Philippines will grow faster than Taiwan. Foreigners have great faith in President Fidel Ramos. He works hard, he's honest and he is seen as having turned the country around. That's why investors are coming in. The boom is just beginning in the Philippines.
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