From reluctant entrepreneur to a seasoned risk-taker

The Entrepreneur Of The Year Philippines 2019 has concluded its search for the country's most successful and inspiring entrepreneurs. Entrepreneur Of The Year Philippines is a program of the SGV Foundation, Inc. with the participation of co-presenters Department of Trade and Industry, the Philippine Business for Social Progress, and the Philippine Stock Exchange. In the next few weeks, BusinessWorld will feature each of the finalists for the Entrepreneur Of The Year Philippines 2019.

DEVELOPING and managing a successful business is a long, arduous process that requires patience, determination, hard work, and business acumen.

For someone who is about to celebrate 50 years in the business, Necisto Sytengco is no stranger to the demands of entrepreneurship. He was only 16 years old when he took over the family insurance business after his father passed away. Young and inexperienced, he struggled to keep the company afloat because it was earning very low premiums at the time. To make matters worse, customers also doubted his ability to run the company.

He recalls, “People told me, “Who will buy insurance from you? You are only 16 years old? Nobody will trust you.”

Fortunately, he was able to maintain the business with the support of his father's friend, the late Nicasio G. Co.

While working, he continued his education at the Mapua Institute of Technology and graduated with a BS Mechanical Engineering degree in just three and a half years. Armed with his experience in the insurance industry and a newly acquired degree, he ventured into electronic spare parts and chemical trading. In the early 1970s, he opened Sytengco Merchandising, a single proprietorship, in Sta. Cruz, Manila which initially focused on distributing electronic spare parts imported from Singapore.

The early years were financially challenging for Mr. Sytengco.

He recalls, “I had to save whatever I could save. There were times when I had to walk from my office in Sta. Cruz to Caloocan.”

Unbothered by his financial difficulties, he continued with his venture, determined to learn about the tricks of the trade. He would eventually become adept at identifying business opportunities and acquired loyal clients who helped him sustain and build SBS to what it is today.

Sensing the market's growing need for raw chemical products, he shifted to the importation and trade of chemicals. He traveled to different countries in search of producers who could supply him with high-quality products at a competitive price. Encouraged by their wide range of products, companies from various industries began sourcing their chemical requirements from SBS.

As the company's market share grew, it became difficult for SBS to meet its clients' demands given their volume and time requirements. As a small company, SBS did not have the financial capability and storage capacity to supply clients with large volumes of chemicals within a limited amount of time.

But Mr. Sytengco knew that he had to deliver on his promises. He took out a loan with the help of a friend and invested in a strategic warehousing and distribution facility. This facility streamlined the movement of products, giving SBS the flexibility to provide their clients with chemicals in large volumes.

This move was instrumental in building the company's good reputation and assuring their clients of their capabilities. He shares, “At SBS, we know what we're doing. The best thing about us is our reputation. Whenever we commit to something, we do it. We don't make promises that we cannot perform.”

A calculated risk-taker, Mr. Sytengco steered SBS through the national political and economic instability of the 1980s and the Asian financial crisis in 1997. Unlike his competitors who took conservative stances, he saw these events as opportunities to increase the volume of their products and expand and diversify their portfolio. He calculated the probability of his plan and foresaw a favorable return on investment. Immediately grabbing the opportunity, he ordered an increase on their imports. Although a significant risk, he explains, “In any business, there's always a risk, but in trading, there's always opportunity. I calculate the risk to check if the probability is above 60%, then I continue. You just have to ensure your strength as a trader and the reliability of your source so that you can deliver products to your client at an acceptable price range.”

His calculations proved correct as the company's inventory flew off the shelves. He recounts, “We became one of the biggest companies in the industry. By then, my clients were convinced that only Nestor Sytengco could provide them with chemicals at that kind of volume even in times of crisis and shortage.”

Mr. Sytengco attributes his company's success to its commitment to provide better value for clients' investments. They constantly search for suppliers who provide high-quality products at reasonable and competitive prices. Through this strategy, clients reduce their cost, increase their market share and grow their business, leading SBS to achieve customer satisfaction and acquire long-term supply contracts.

Going beyond its role as chemical suppliers, SBS also studies its clients' industries, goods and services to determine what they can do to further improve their operations. The company encourages clients to innovate by substituting their existing chemical materials with better ones.

SBS Philippines Corp. (formerly Sytengco Philippines Corp.) was established in 2001. SBS continues to expand its portfolio with a wide range of over 3,000 products to meet the requirements of various industries. It has also developed its operations through several key distribution warehouses with a combined storage capacity of 18,000 metric tons.

Its growth quickly attracted investors and, by August 2015, SBS was listed on the main board of the Philippine Stock Exchange with a total of 1.2 billion common shares with par value of P1.00 per share. Today, SBS stock has climbed to an estimated price of P9 per share. The company was named the 2015 Best Small Cap Equity Deal Of The Year in Alpha Southeast Asia's 9th Annual Best Deal and Solutions Awards.

Mr. Sytengco's ability to identify business opportunities extends to his corporate social responsibility endeavors. He established the Sytengco Foundation, Inc. which subsidizes education for priests, provides scholarships to students in Mapua University, and conducts regular charity clinics and medical missions in underprivileged areas. He also donates to the Philippine Cancer Society and various government hospitals and orphanages.

Through his penchant for calculated risk-taking, Mr. Sytengco was able to grow SBS Philippines Corp. from a humble merchandising firm to one of the leading chemical distributors in the country. In recognition of his outstanding career, he was named the 2018 Entrepreneur of the Year at the Asia Pacific Entrepreneurship Awards and has also received The Outstanding Mapuan Award for Entrepreneurship from Mapua University in 1994.

Having leveraged many opportunities to get where he is today, he gives one key advice to aspiring entrepreneurs, “Learn to seize the right opportunities at the right time. Not all ventures will end up successful so know how to mitigate risk. Be ready to encounter losses and learn from them. Build your credibility by delivering on your commitments to ensure long-term sustainability. Whatever we learn is our asset for life.”

The official airline of the Entrepreneur of the Year Philippines 2019 is Philippine Airlines. Media sponsors are BusinessWorld and the ABS-CBN News Channel. Banquet sponsors are Global Ferronickel Holdings, Inc., Jollibee, and Uratex.

The winners of the Entrepreneur Of The Year Philippines 2019 will be announced on Oct. 15 in an awards banquet at the Makati Shangri-La Hotel. The Entrepreneur Of The Year Philippines will represent the country in the World Entrepreneur Of The Year 2020 in Monte Carlo, Monaco in June 2020.

The Entrepreneur Of The Year program is produced globally by Ernst & Young.