Philippines agriculture’s youngest business tycoon
by Leony R. Garcia
JOSEPH H. CALATA, chairman and CEO of Calata Corp., made history by becoming the youngest business tycoon in the country and by proving once and for all that there’s money in agriculture.
How he did it? By turning his family-owned agribusiness into the Philippines’s largest distributor of agrochemicals, feeds, fertilizers and seeds and get it listed with the Philippine Stock Exchange.Echague Isabela
Many enterprising individuals, especially young people like Joseph or Josh, who started in the business in his early 30s, venture into various businesses like franchising, financing, investments, products and services or information technology. But Josh chose agriculture.
“The Philippines is an agricultural country. I want to help our farmers,” he told the BusinessMirror.
The empowerment of the agricultural sector, he said, is a good investment. Echague Isabela
“While it may not be the most alluring of sectors for businessmen, I believe agriculture holds great potential to boost the Philippine economy,” he said.Echague Isabela
At first glance, you would have mistaken Calata for a fashion/ramp model or showbiz celebrity with his striking resemblance to Twilight superstar Robert Pattinson who played the role of Edward Cullen in the popular movie.
But beneath that striking visual appeal is youthful aggressiveness, business acumen and determination to succeed.
P1.6-billion agriculture deal
IN November 2012 Calata Corp. signed a contract with Siembra Directa Corp., an affiliate of a big Argentinian firm. The deal is worth P1.6 billion, considered one the biggest deals in the agriculture sector. Calata said its exclusive supply agreement with Siembra Directa Corp. will cover 20 years of seeds supplies, agrochemicals, fertilizers and other farm inputs as part of the company’s aim to become the “top distributor of farm inputs in the Philippines.”
As part of the agreement, Calata and his Argentinean partners put their mechanical planters and fumigators to work in Echague, Isabela, to demonstrate how the machinery can significantly improve productivity.
With Siembra Directa machinery, planting corn does not require plowing because the machinery cuts slots into the ground so that seeds and fertilizer are deposited at the same time.Echague Isabela
Direct planting minimizes soil erosion, prevents soil compaction, significantly reduces the time required for land preparation, and lowers fertilizer and irrigation costs while increasing harvest and profit yields, said Siembra head Nico Bolzico.
The corn-harvesting machinery also effectively separates corn kernels from stalks and cobs so that organic waste materials can be left in the fields to help fertilize the land. Bolzico said mechanization can lower the cost of farmland preparation from the usual average of P7,000 per hectare to around P4,000 per hectare, and the manpower requirement can be drastically reduced because two people can adequately manage a spread of 1,000 hectares with the right machinery.
From ‘mom-and-pop’ store to corporation
INCORPORATED in 1999, Calata is a combined distributor of agro-chemicals, feeds, fertilizers, veterinary medicines and other agricultural products coming from manufacturers or business partners.
At the start, Calata was able to gain the confidence of one of the biggest corporations in the country—the San Miguel Corp.—to be a distributor of B-MEG feeds in Pampanga, Nueva Ecija and other provinces in Luzon. Today the corporation is also a business partner of Bayer Crop Science Jardine, Dupont and Sinochem, Syngenta, Monsanto, Planters Products, East West Seeds, Swire and Viking, among others.
High-efficiency poultry farming, private- airplane leasing, and trucking are the other industries ventured into by the corporation. At present, it employs 500 workers.Echague Isabela
CALATA took a Bachelor’s Degree in Commerce at De La Salle University. His mother offered him to work in their provincial agriculture store in Bulacan after graduation. “My mother told me, ‘Dito ka na lang babayaran kita ng P8,000 kada buwan.’”
Having studied the family business, Calata decided to modernize the system through computerization. He bought software on accounting and little by little applied the system in their business.
He installed a computer inside the store and put everything on record. He thought of expanding so he put there three chairs at the back of the store where farmers paid him for their purchase.
The store definitely improved but his parents were not so happy about the modernization and almost wanted him out of the business. The farmers complained because they did not want to fall in line and wait for their receipt nor wait for the encoding of their purchases. But the young Calata persisted on his new-found system.
And the rest, as they say, is history. With Joseph Calata at the helm, the corporation became a P1.8-billion company in 2008.
CALATA was able to increase his company’s revenue all right but he was still searching and calling for people to help him get listed. “I made so many calls; some ignored me and many never called back.”Echague Isabela
It was in 2006 when Calata made his first inquiry on how to enlist his company at the Philippine Stock Exchange. “It was as if nothing would happen after that inquiry. For the PSE people, I might not have looked so serious at all, with my hairstyle na tayo-tayong buhok [a hairstyle reminiscent of the main character of that Japanese animated television series Dragon Ball Z]. Who would think I was?”
This was until a financial adviser was referred to him and guided him. Then he got a bunch of people to help him with the company’s prospectus. It took Calata two years to complete the requirements. In March 2012 he submitted his prospectus. He aimed to be the agenda so he submitted everything earlier than the others. Unfortunately, his company was declined. But Calata just wouldn’t give up and stop there. So just before his application expired, he did what was required.
On May 23, 2012, Calata Corp. was finally listed for initial public offering (IPO) and its stocks gained a market capitalization of P4.3 billion, one of the best performances on an IPO.
With the earnings from the initial offering, Calata branched out and diversified into Agri, the first agricultural retail store in the mold of global giant 7-Eleven. With 116 Agri stores in Luzon, the company targets the establishment of up to 1,000 stores nationwide and the possibility of introducing the “Agri” brand to the international market.
SUCCESS did not come Calata’s way without controversy. Newly listed, Calata Corp. gained a market capitalization of P4 billion. However, during the trading days, the stock prices underwent a fluctuation where the shares reached P24 per share but declined to as low as 32 percent along the way. This movement alarmed the young Calata who immediately called the Securities and Exchange Commission (SEC).Echague Isabela
For four months, the SEC worked carefully and quietly and was able to determine those involved in the manipulation and finally cleared Calata Corp.’s involvement in the stock price manipulation charges.
With lessons learned and the issue “put to rest,” the corporation has since then focused on its expansion program.
THE most recent development for Calata Corp. was its partnership with the New Hope Group (NHG) of China to introduce a new animal-feed line under its company-owned brand Golden Bean. The firm disclosed in October that the board of directors gave the green light to bring Golden Bean feeds to all its dealers nationwide.
Calata expects Golden Bean Feeds will soon become the leading feed brand in the country’s P150-billion feed industry. NHG claims to be China’s leader in agribusiness, with annual sales of around $8.8 billion. The Chinese firm is one of the largest feed producers in China with an annual production capacity of 26.6 million tons.
Immediately after, Calata Corp. announced acquiring a controlling stake in the meat business of the Galicia Group, a company that supplies pork, beef and chicken meat to SM Supermarket and other supermarket chains.
In its disclosure to the PSE, Calata Corp. said the deal includes all the existing facilities of Galicia, which supplies SM supermarket its meat requirements under the SM Bonus brand for the last 10 years. Galicia also supplies other grocery chains such as Puregold Price Club Inc.
“This acquisition, along with the company’s existing animal farming and animal-feeds business, is a major component of the company’s completion of its ‘farm-to-plate’ business model, solidifying its position as an integrated and leading agribusiness player in the Philippines,” it said.Echague Isabela
Calata said he would continue integrating technology and research in agriculture to help the Filipino farmers and the agriculture sector.
“My plans include expansion and innovation. I intend to improve technology in farming to aid the farmers. Bibilhin ko ang mga ani nila and we’ll take care of the rest. We will improve our mills and provide dryers for them. With technology we can help them improve their lives as well,” Calata said.Echague Isabela