SIMBULAN PROFILE - Courage defines an entrepreneur

RENATO G. SIMBULAN
President & CEO
SIMBULAN GROUP OF COMPANIES

 

 

By Bernie Cahiles-Magkilat

RENATO G. SIMBULAN comes from a poor family, but he dreamed high and has courage to pursue it.

During his early days in business, Simbulan went through two serious tragedies that put his entrepreneurial spirit to a test. While nothing seemed left, Simbulan never lost courage, a value that his entrepreneur parents taught him.
Today, the maker of the bulky speaker boxes has become one of the country’s top, if not the number one, contracting companies that specializes in ID fit-outworks for high caliber projects.

HUMBLE BEGINNING

“I come from a poor family, so I dreamed early. I dreamed that I have to earn my first million at the age of 30,” recalls Simbulan, who belonged to the first batch of ECE (electronics communication engineering) graduates from the University of Sto. Tomas.

During his graduation in 1977, he realized that his course was ahead of its time. There was not much application then. So, the potential job was in the semiconductor industry, but his dogged determination to fulfill his dream gave him the courage to turn down job offers that failed to show a career path towards the fulfillment of his dream.

While he was trying to figure out his niche, he was working on speaker boxes. In fact, he was already working on those bulky speaker boxes during college that he designed and delivered to customers.

At that time, there was also a revival of the local furniture industry. Because his background was in electronics and electricals, his customers would ask him to do the electrical installations. Customers wanted new electrical wiring and new systems. From speaker boxes, he progressed into doing indoor cabinets and kitchen cabinets.

“I was practically doing indoor cabinets in our garage with one very good carpenter. I started really small,” he adds. He was able to attract customers that led to his introduction to executives of the country’s big conglomerates.

He formalized the business and as soon as he had P5,000 in savings, he registered the Simbulan Industries Philippines, Inc. (SIPI) based in Baliwag, Bulacan.

To pursue his dream, Simbulan joined international shows showcasing his practical use of design in his products. Success came so swiftly that they became the leading manufacturer of high-end furniture and home furnishings. In a span of 5 years, he was already exporting.

TRAGEDY

Unfortunately, a big fire broke out and gutted his furniture factory. “It was a total loss and we were in the front pages of some newspapers,” he says. The fire claimed the lives of five workers and P70 million worth of properties were damaged, including the P12 million worth of finished furniture pieces ready for delivery to Dusit Hotel, previously the Manila Garden.

At that time, Simbulan was doing the rooms, cabinets, ceilings and all the floor finishing of the hotel. The furniture that the hotel officials inspected that day were destroyed by the fire that hit during that night also.

“But the hotel director was very good to me and asked me how they can help. I said ‘just pay me the P12 million’ and they did,” says Simbulan. It was a P65-million contract, his first major project. His network of friends also lent him some capital.

“Everybody was just so happy helping me,” says Simbulan, who was overwhelmed with all the help he got. One person wrote a P3-million check and another P10 million.

“My dad told me that all is not lost because the market is there and there are people willing to help. So, five days after the fire, we restarted, people had to go overtime all the time because we had a deadline to beat,” he adds. With that, Simbulan was able to rebuild and deliver on time.

Just as he had recovered, the Asian financial crisis struck in 1996-1997. “It was so hard that even how hard you kicked, the market just won’t budge an inch,” recalls Simbulan. He was buried in debt as bank interest rates shoot up to 32 percent. The banks were after him and the people who helped him now needed their money back.

“You know banks, when it’s raining, they will not give you umbrella, but they give when there is sunshine,” he says. “I had no credit line, not even credit cards as all had been cancelled.”

His debts piled up to P100 million that some of his properties got foreclosed notices. He was frank with the banks, telling them he could no longer pay as he was running out of capital. But he pleaded for patience, promising he will pay up once he recovers. Some who could not wait had to foreclose and cases ensued. There was one bank he sued.

At that time, his property and factory assets were valued at P180 million that he can use against his debts, but which nobody would buy because of the pending foreclosure cases.

“My motivation is not to lose hope of recovery because if I lose hope there is nothing to look forward to,” he adds.

He mustered all the courage and when the crisis eased a little bit, his first project was the Fort Ilocandia, which was newly acquired by a Taiwanese group.

Still in constant need for capital, Simbulan, who was already active with the Philippine Chamber of Commerce and Industry, had the chance to meet businessman Fred Yao, who owns Philippine Business Bank. Yao facilitated a P70-million credit against his projects. They came up with a project financing facility where he assigned his receivables to Yao’s bank. He would always run to Yao for credit when new projects came up.

From then on it was a smooth sailing business for Simbulan as he got repeat and new clients.

TOP FINISHING CONTRACTOR

With the growing finishing business, the Filipino R.G. Simbulan and Partners became a contender in the fit out solutions.

Guided by its mission, the company was able to “execute ID fit-out works in the enterprise’s time-honored tradition of excellence in quality and workmanship, combined with creativity and innovation to provide the client best value for money.”

Now, the Simbulan Group is already one of the top three finishing contractors in the country. His biggest break was when he won the bidding of Shangri-La Boracay in 2006. “We did Shangri-La Fort, Conrad Hotel and the full renovation of New World Hotel, Hyatt Manila and Manila Heritage Hotel,” he adds.

They are now doing Sheraton Hotel, Admiral Hotel in Roxas Boulevard. They are also doing the construction of the hotel resort in Guimaras, the Andana Hotel. They have their hands full that at one time, they had an aggregate contract value of P3 billion. On the average, they have P1.2-billion to P1.3-billion revenues a year.

“We are ranked in the top 600 corporate players employing 1,200 workers,” says Simbulan adding that during peak season they have as high as 3,600 people.

To date, its clientele includes world-renowned resorts and hotels, prestigious names in international entertainment and gaming, and industry pillars in high rise and township development.

They have become an integrated finishing fit-out works contractor where they supply everything from floor tiles, carpets, wall coverings, cabinets, and all other furniture pieces.

COURAGE

Simbulan had gone through two serious crises that any ordinary entrepreneur could have just given up. He did it with sheer courage.

“The challenge is getting back from scratch. So, the basic value of good business practice is to never give up your entrepreneurial spirit, you must have courage,” says Simbulan.

He shared that when he was fighting against a bank that he sued during the Asian financial crisis, he told the bank, “I already lost my shirt, I cannot afford to lose my underwear.”

Aside from courage, Simbulan said, “Business is always anchored on good relationship with supplier, partners, and people. You have to have good relationship for they can make it hard for you and bring you down if you are not treating them right.”

At the factory, Simbulan makes sure they have barracks and quarters for their people, food supplies, and shuttle services.

They grow their own people, too. If you are good, you move up the corporate ladder. He has given 6 real corporate chairs to his top people, who have been loyal to the company.

“That is the corrective measure in our brain drain now. So many Filipinos have left the country, so our approach is to give them incentives to continue working with us. As partners, they share in the dividends,” he says.

The company also invests heavily in training so that their people become well-rounded workers. “We do not pirate people, all of them are homegrown, we have engineers, architects and industrial engineers, accountants,” says Simbulan.

In fact, part of their vision and mission is to become a training institute for the industry. Workers are encouraged to enroll in their training so if one particular task is completed, they can move on to the next part. “If you are a painter only when painting is done you have no work anymore but if you know other functions so can have extended engagement as stone tile setter or welder,” he adds.

VISION

Simbulan chairs the international affairs of the PCCI. As such, he sees the opportunity for local businessmen to partner or form a joint venture with foreign companies to invest in the country or in other countries.

Simbulan stressed that by forging a joint venture, Filipino contractors can undertake projects overseas with their local partners and bring Filipino workers over there.

“If we just send our skilled labor, we are at the losing end because we already have good track record. We can very well undertake these contracts overseas like Japan and Korea with our expertise together with our skilled labor. We can do these projects in Taiwan or Japan or China or even Europe.
Since they do not have enough people, so we have to forge a joint venture. But I cannot just supply pure labor, we will do the project together,” he adds.

With the ASEAN integration, Simbulan was very optimistic that Filipino architects can expand in other ASEAN countries. “It is all fair for everyone, but we have the advantage with our skilled labor,” says Simbulan.

To date, Simbulan has 40 delivery trucks, vans and shuttle business to deliver products to clients. Simbulan has further expanded its business with the creation of the Concrete Blocks and Co., which is producing professional building blocks at its 2-hectare complex in Baliwag, Bulacan. The plant is fully automated and is capable of producing 20,000 blocks a day.

With its capability, Simbulan is now entering into pocket housing development. They are set to build its first 40-unit housing project in Bulacan next year.

The company has grown this big that they are now thinking of going IPO listing in the next two years.

LESSONS LEARNED

There are lessons that Simbulan treasures.

“Life is always a challenge, so continue updating your body because it is like a machine. You cannot stagnate because living is now dictated by technology. So, live within it or else it would be boring unless you want to live like a hermit or be silent. But it is difficult to isolate yourself when your surroundings are connected to technology. You will be left behind,” he adds.

Second, he encourages entrepreneurs to keep the values they learned. “One should not lose the value of honesty, patience, perseverance, industriousness, and most of all, courage,” says Simbulan.

He lamented the fact that the educational system in the country has done away with the basic GMRC (good manners and right conduct) subject in school.

In his company, the first thing they drill down in a new employee is about integrity, which they define as “doing the right thing even if nobody is watching you” because it is too tempting to lose integrity.

Another valuable lesson is prudence. People have become too materialistic that could lead them to do bad things to support their whims and caprices.

“If you practice prudence, you live within your means. If you want more, then increase your ability to earn more, but you can never cheat to earn more,” he adds.

As a businessman, Simbulan said he never participates in fixing or bid rigging. “We are always above board, if we lose in the bidding, we lose.”

His mother always tells him the karma effect. “Never be tempted by money because if you trifle integrity with money, you will amount to nothing,” says Simbulan. This is one dictum that he shared with his children and people.
These days of fastfood and fast paced life, patience has become a very rare virtue.

“If you have no patience, you take short cuts. But if you want to live and enjoy life, do it slowly, but surely,” adds Simbulan, who have been invited as motivational speaker in various events.

“One thing I can tell you is never to lose hope,” adds Simbulan.

In all his life as an entrepreneur, Simbulan was able to build trust and confidence with clients and his people. “I have cordial relationships with them that I became part of their family events. I became godparents to their kids,” he adds.

Despite the rigors of business, Simbulan never loses time to spend with his people. He always banters them. “I tease my people, I am jolly, but when it comes to work, I am very strict with compliance,” he adds.

They hold quarterly gathering and regular company outing. Its Christmas party is held at the Makati Coliseum where they gather 4,000 people.

He described himself as “warm” and someone who loves mentoring people.

“I hunger for knowledge and I want to gain knowledge from every conversation and I want the other person to also learn from me because if can share I can also learn,” says the 63-year-old entrepreneur.

SUCCESS

There are several things that would define a successful individual. First is technical competence, to be excellent in what you are doing. Second is managerial excellence and third is a combination of the two which is entrepreneurial.

“The entrepreneurial thinking will translate to income. What the first two can do will always contribute to support that entrepreneurial spirit,” he adds.

“Technical competence can bring you up the ladder while managerial excellence defines your value and worth, but the entrepreneurial spirit should be the result of the combination of these two.”

Simbulan does not hide his admiration for President Duterte, who he looks up to among the people he admires.

“Duterte is my idol,” says Simbulan, who is amazed at the President’s psychological way of management. “Who is a leader of any country who is able to do what he is doing,” says Simbulan, who said that Duterte manages the US and China relations without losing his dignity as a leader. “It is just him, manipulative in a sense because he knows the results,” he says.

He also has high regard for Winston Churchill, a statesman and deep thinker, manipulative with subtle rudeness, but when he makes a decision it was a boom.
He also admires the former strongman President Ferdinand Marcos. “Marcos was also good until he lost control of the situation. He was a visionary and the only President with a long-term plan,” adds Simbulan, who served as the youngest Rotary Club President of the Bulacan chapter when he was only 26 years old.

Success to him is relative. He does not define it in terms of money in your passbook, not the many trophies, accolades and friends that surround you.
“Success is something measured by the heart, how you feel, not how people say about you,” says Simbulan, who always loves simplicity just like the values of his young boy’s scout’s life: Always be prepared, happy, cheerful, honest, industrious, loyal, and courage.

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