The Midas Touch of LCG Group's Iron Butterfly

Since the time she took the unheard of leap into the macho man's world that is business in the Philippines, there isn't much that LCG Group of Companies Chair and President Betty Uy Lu hasn't touched which didn't turn into gold.

"When I was still in college at Xavier University (Ateneo de Cagayan), I asked my father to allow me to work for only one year," the winsome dynamo said. "My high school in Davao and college in Cagayan de Oro had opened my eyes to the world beyond my father's business in Kibawe, Bukidnon and I wanted to be part of that dynamic world."

The family ran a general store and hardware in the southern municipality of the highland province and also did the usual trading in rice, corn, coffee and other agricultural commodities that Filipino-Chinese families usually engaged in the rural areas.

"I couldn't see myself going back to Kibawe to continue the business, "Ms. Lu said. "I saw so many opportunities in Cagayan de Oro that were only waiting to be tapped."

After fuming over the possibility that his eldest child might not be coming back to run the family business, Lu Cham Giam (whose initials are enshrined in the company name) finally consented and Ms. Lu went to work as a money market trader for State Investment House, Inc. (SIHI) in Cagayan de Oro.

However, after working for a few months on a small salary, a chance visit to her aunt in Davao City changed things overnight. Tomas Ang, the husband of her mother's younger sister who ran Mike's Auto Parts, asked her if she was interested in selling Firestone tires as a sideline.

"I was horrified," Ms. Lu recalls. "How could I, a woman, do in what was then strictly considered a man's world of selling tires?"

Her uncle convinced her that she already had a captive market in her money market clients, so she grudgingly consented. "I couldn't say no to him because the family accommodated me for six years while I was in high school at Davao Chinese High School."

With no experience, no contacts, and no capital, Ms. Lu started what would eventually be the LCG Group of Companies in a tiny two room apartment in San Agustin-Pabayo Streets in 1982. "My first client was Tony Chan of D' Shoppers," she recalls. But she made more money from her first transaction than a whole month's salary at her regular job. There was no turning back after that.

Even when her father said a young Chinese woman like her had no business doing business in a man's world and vowed not to give her any financial assistance, Ms. Lu doggedly pushed ahead, her tiny sala in the apartment became clogged with batteries and tires, and the neighbors started complaining about the smell. When necessary, she delivered tires strapped to the roof of her VW Beetle, or had batteries sent to her buyers by motorela, the ubiquitous Kagay-anon motorized caretela powered by a motorcycle.

She eventually saved up to P100,000 by rolling her capital, maximizing her 30-day credit line from her uncle by giving her customers 15 days term and using the same capital twice in a month but it was still not enough to exploit the potential that Ms. Lu saw remained untapped in Cagayan de Oro.

Again, with the help of her uncle, she was referred to Bernie Alvarez, then branch manager for Ramcar Batteries in Cagayan de Oro to negotiate for a 30-day credit line. Mr. Alvarez, who would eventually wind up as the general manager for NorthWest Mindanao for the Tires, Batteries and Accessories (TBA) division of the LCG Group, admits he was taken aback upon seeing a woman running a tire and battery distribution business, and only gave her credit because her uncle was their biggest client in Davao at that time.

By 1983, Ms. Lu had attained a monthly turnover of P200,000 a month selling tires and batteries from her 'moonlighting' when disaster struck. Firestone appointed a new distributor for Cagayan de Oro and she was asked to stop selling immediately.

Distraught and depressed, she decided to take some time off with a vacation to Tacloban City, Leyte. On the way back aboard a boat to Cebu, providence again smiled at the determined young woman from Kibawe. She met Greg Gabumpa, the Cagayan de Oro branch manager of Sime Darby, who agreed to introduce her to then national sales manager Jess Mendoza.

Mr. Mendoza did not expect a woman to be in tire distribution, she laughingly recalls. "He asked me what I was doing in a man's world, and discouraged me by saying they were not ready to appoint a distributor for Cagayan de Oro since the market was still immature."

Ms. Lu said she appreciated Mr. Mendoza's reservations about her gender, lack of experience and lack of a proper office from which to transact business which were all legitimate concerns, but she pleaded with him to just give her a target and try her out for three months.

At that time, Firestone and Good Year were the dominant tire brands nationwide with Sime Darby a distant third. The Cagayan de Oro market was mainly a truck tire market with Firestone dominating with an average monthly sales of P200,000.

"After many weeks, I received an interim appointment as distributor for Cagayan de Oro, but in a place where the highest previous sales per month for a brand was P200,000, Sime Darby gave me a quota of P1-million a month!" Although happy she finally got her break, Ms. Lu spent many sleepless nights agonizing over how she could attain the impossible target. She also had to again swallow her pride to ask her father permission to mortgage the family property in Kibawe to be able to secure the bank undertaking required by Sime Darby.

Finally, she came up with a strategy. With the help of Mr. Gabumpa, she got an appointment with Mr. Ricardo Yanson, the owner of Bachelor Express, which was (and still is) the biggest bus line operator in Northern Mindanao at the time. When she arrived at the Bachelor office at Cogon market, her competitors from Firestone and Good Year were already there, having secured earlier appointments. However, providence again smiled on her when to everyone's surprise, Mr. Yanson chose to see her first.

"I was determined to close this deal at all costs so I offered him 12% discount when everyone else was offering 10%," she said."I know this would cut into my margin but I thought I could make that up with the volume of business we would eventually get from Bachelor Express."

Mr. Yanson promptly signed the purchase order for 50 pcs. and to this day she says her competitors (who are now her colleagues in Good Year) couldn't forget how she sashayed out of the office in her high heels and mini skirt, casually fanning herself with the P.O. and told the awestruck group waiting there, "Goodbye and sorry, he already signed the P.O.!"

Ms. Lu took special care of her golden account, serving Bachelor Express personally when needed, and it became the lynchpin which enabled her to deliver, after 3 months, an unheard of P3.5-million sales for Cagayan de Oro City.

"I was told Mr. Mendoza was hopping mad when he heard the news and immediately called an emergency meeting of his sales and marketing people, demanding to know why they only projected P200,000 a month for Cagayan de Oro, and here I was with P3.5 million after only 3 months!" she recalls gleefully.

Ludy Montesclaros, then Visayas-Mindanao manager for Sime Darby, brought Ms. Lu's appointment letter herself to the SIHI office and gave it to her pretending to be one of her clients. "I was so afraid they had turned me down despite my performance, but when I saw what it was, I immediately went to the toilet and jumped for joy!"

Ms. Lu finally had to leave her regular job and go into business full time. Her regular sidekick who was with her since the beginning was her younger brother Michael, now the Vice President for Sales and marketing of the LGC Group. While Ms. Lu ran did telemarketing from her office, the younger sibling was her delivery man, collector, agent, and all-around factotum. She recalls the time when she was still running the business from the tiny apartment and both parents and all six siblings were present.

"I vowed to give them all jobs in my company when we were already established," she recalls. "I told my mom I would buy her a new house and my dad a new pick-up. They all had a good laugh at what they took to be my illusions. It took some time but I delivered on everything I promised them on that day."

Letty, who helped her run her first store in 1984, is now the VP-Admin, while Annie is the VP-Finance. Two other siblings, Henry, is now a neurologist and pain management specialist at the Makati Medical Center but at the same time a member of the board of directors for the LCG Group while Johnny, their bunso, is a dentist, but is also part of the management team as assistant vice president for sales and marketing.

From the original Tires, Battery and Accessories (TBA) lines, LCG Marketing has grown into a service oriented group of companies which counts among its ranks Toyota Motors Cagayan de Oro, the 2001 Toyota Dealer of the Year (and still the only dealer outside Manila to be recognized as such) and the Good Year High Performance Center, the latest addition to the group launched last October 27, 2006, and reputed to be the biggest such Good Year facility in the country and second largest in Asia. Just recently, the group began importing Case IH farm tractors and implements as its sole distributor nationwide.

The group has also diversified over the years as the exclusive distributor for other product lines in other areas such as SC Johnson consumer products (Northern, Western Mindanao and Cebu province), Johnson & Johnson (Mindanao and Cebu), Shellane LPG (Misamis Oriental, parts of Western Mindanao); Shell Lubricants ( Caraga, Central & Northern Mindanao, & parts of Western Mindanao); Prestone Brake Fluids (Caraga, Central, Northern Mindanao, & parts of Western Mindanao); Philip Morris (Northern Mindanao, Caraga & parts of Western Mindanao); Globe Telecoms consumer products (Parts of Northern, Western Mindanao and Southern Cebu) Philips Lighting (Professional) (Visayas including Palawan), Bioactive Fuel Enhancer (Caraga, Central & Northern Mindanao, & parts of Western Mindanao) and Wyeth Nutritionals (Cebu Province).

In a bid to professionalize the group's management, an executive committee composed of stockholders, top management and general managers meets every quarter to evaluate the performance of each division and chart the group's direction. Training is given a high premium and many of the group's middle managers are in their early and late 20s.

In 2005, the Cagayan de Oro Chamber of Commerce and Industry Foundation, Inc. (Oro Chamber) recognized the LCG Group of Companies as the Outstanding Business Enterprise (OBE) for Region X for the maiden edition of the award in the Medium Enterprise Category.

With all these achievements and accolades, many lesser mortals would be content to sit back on their laurels and let the professional managers do the dirty work. No such thing for the Iron Butterfly with the Midas Touch, though.

On February 11, Ms. Lu left for Boston to take the second module of her Owners President Program in Harvard University, a 3-year course exclusively offered for chairmen and presidents which only requires participants to attend 3 weeks per year. Of the 160 participants from all over the world taking the program, only 10% are women.

For self-taught, self-starters like her, there's something new to be learned every day. Perhaps that's one reason why almost everything she touches turns to gold. In the city where friendship is golden, it's the one constant that could be the secret behind her success.

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