If it’s one thing entrepreneur Dennis Uy knows how to do, it’s stand up to bullies. Until he faced Manila’s elite.
“Pag probinsyano [When you’re from the province], there’s a lot of fighting, you know. My playground is the street,” the Filipino serial entrepreneur tells me during an interview in the rooftop restaurant of the Discovery Primea in the Makati business district. “In Tagum, I play in the streets, I play in the simbahan [church] and we fight and play, but operating in Manila, where they accuse you, they media you, they put you in the newspaper. It’s like whoa, whoa, this is, it’s daring.”
Good thing daring is in Uy’s blood. The 46-year-old businessman from Davao made his fortune taking on oil giants, founding a petroleum trading business in 2002 to get fuel faster and cheaper to his Mindanao community. It evolved into the largest independent fuel retailer Phoenix Petroleum, the Philippines’ third largest oil company, with more than 600 branches nationwide and 7 percent market share. It reported 2018 revenue nearly doubled from the previous year to $1.7 billion (PHP 88.6 billion) and saw earnings grow 82 percent.
Phoenix is the main revenue generator for Uy’s holding company Udenna (a word play on his name: Dennis Ang Uy), but petroleum is just the tip of iceberg of this fast growing conglomerate. Uy has stakes in at least 50 companies operating in shipping and logistics, hotel and tourism, education, hospitality, food retail, property development and infrastructure. As chairman and CEO, Uy is waiting on regulatory approval to backdoor list Udenna on the Philippine Stock Exchange in a $1.36 billion (PHP72 billion) share-swap acquisition of ISM Communications Corp.
Now, Uy is daring to disrupt the country’s powerful telecommunications duopoly as head of the China Telecom-backed Dito Telecommunity, formerly called Mislatel Consortium after the Mindanao Islamic Telephone Company that held the telco franchise. The Goliaths in this case: PLDT run by local businessman Manny Pangilinan that counts Indonesia’s First Pacific and Japan’s NTT group as its biggest shareholders, and Globe Telecom, jointly owned by the Ayala Corporation and Singapore Telecom.
The Dito Telecom deal shot normally under-the-radar Uy into the spotlight, making him a target of representatives from competing interests and subjected him to days of grilling in the Philippine Senate earlier this year, where some lawmakers questioned his integrity and the validity of the firm’s franchise. “But if I were a son of a taipan, growing into this business, nobody would question me,” Uy says.
A third generation Chinese from Fujian province, Uy owes his entrepreneurial spirit to his grandparents, who migrated in the 1930s to Tagum, 50 miles northeast of Davao, and built a diversified business with their 8 children (Uy’s father is the eldest), operating in everything from gold mining, to copra and commodities trading, to food retailing, to car dealing.
Finance Secretary Carlos Dominguez, a long-time Davao businessman, attests to the family’s success story and community influence, saying “they really built their wealth in gold, being at the right place, at the right time.”
The eldest of four and the only boy, Uy learned ambition and discipline at an early age, reading Dale Carnegie and Stephen Covey books and honing his knack for identifying opportunities by addressing unmet needs. Since 1990, he’s been traveling between Davao and Manila, first as a student at De La Salle University and then as a purchasing executive building supply chains for the family’s many businesses.
He made money investing in the stock market and real estate, and began researching businesses after the 1997 Asian financial crisis. In 2002, he took a chance on the deregulated oil industry, cultivating his appetite for risk. After his partner bailed, Uy cold-called the vice president of Cebu Pacific, the Gokongwei family’s budget airline, offering a lower fuel rate and flexible terms in exchange for an exclusive 5-year contract. The rest is history.
“I had the confidence because there’s real revenue,” Uy recalls, “and when I started trading, back then, we were pioneering in Davao.” Since then, Uy has been building confidence with each new venture and acquisition, strategically leveraging bank loans, debt instruments and public offerings to build capital and scale and amass a multi-million-dollar fortune.
“Part of our challenges of being entrepreneurs, especially from the province and no name, is how to borrow money. How and where. Cause usually if you don’t have the credit rating or the property or any asset or cash, you borrow from the loan sharks, right? Informal. It’s just too high,” Uy says.
Building an Empire
Over the past two years, Uy has built a multi-million-dollar logistics empire and business conglomerate with stakes in more than 50 companies, each feeding into an ecosystem driven by economic development, infrastructure and tourism. He publicly listed shipping and logistics firm Chelsea Logistics Holdings last year, named after his daughter Chelsea, raising more than $114 million (PHP 6 billion) in the IPO.
His PH Resorts Group Holdings Inc. (PHR) is planning a $300 million integrated resort casino in Cebu, a 12-hectare development called Lapu-Lapu Leisure Mactan, and a 177-hectare logistics hub in Clark city. He bought Petronas LPG, partnered with Thai firm Tipco Asphalt, and bought Japanese convenience store brand Family Mart, high-end bakery Conti’s and hospitality and business college Enderun. His Motostrada just became the exclusive distributor and dealer of Ferrari sports cars in the Philippines. When he’s not building his empire, Uy manages a team in the Philippine Basketball Association, serves as the Honorary Consul of Kazakhstan in the Philippines, and is President Duterte’s Presidential Sports Adviser.
Uy’s debt-driven buying spree drew skepticism from investment analysts and Makati’s conservative business community, noting he could be overextending himself with loans that have high debt-to-equity ratios. But Uy isn’t fazed, saying “being public means good governance, you have to have the discipline for reporting and transparency. And also to attract balance.”
“It’s not like I have capital to do business. I have business, look for capital,” he adds. “You have to scrimp, look for ways to find capital and how to work and make capital work for you.”
Another way he’s building capital is through strategic alliances with powerful families. The Uy-Gokongwei Cebu Pacific partnership extends to the hotel business, with Udenna and the Gokongwei’s Robinsons Land Corp. forming GoHotels Davao for the budget hotel branch in Davao City.
Uy also earned the trust of the Philippines’ richest family, the Sys, securing loans from Sy-owned BDO Unibank and partnering with him in 2016 to buy the country’s largest integrated supply chain operator, 2GO Group Incorporated. Uy also has loans from Lucio Tan’s Philippine National Bank and Bank of China.
In the energy sector, Uy has a joint venture with China National Offshore Oil Co. (CNOOC) to establish a liquefied natural gas (LNG) terminal in Batangas. Manuel Pangilinan’s PXP Energy also partnered with Uy, hoping to leverage his connections to CNOOC to jumpstart talks on oil and gas joint exploration in the West Philippine Sea.
As is the case with many entrepreneurs, Uy says success is a recipe of hard work, guts, discipline, resilience and destiny. So while analysts question Uy’s use of debt and public offerings to raise funding without a history of strong profitability, he sees M&A as the most cost-efficient way to grow organically and make an impact. “We’re building companies, building businesses that you can at least make a difference in the industry. Disrupt something. We disrupted petroleum. And maybe now telco.”
Changing the Manila Mindset
It’s difficult for outsiders to break into imperial Manila, where alliances are strong, but this gutsy probinsyano entrepreneur is doing it, buoyed by supporters in high places. Uy may not be a household name yet, but he is redefining what it means to be a tycoon for a new generation of Filipinos, in hopes of inspiring more innovators to speak up for a more level playing field.
Uy, himself, is going back to his roots with two major infrastructure projects in Davao: a P30-billion monorail and the Davao International Airport.
“Don’t mind the critics, just have to stick to your own shareholder base and know who really are your stakeholders and hopefully have some good advice,” he says. “Be transparent. Don’t hide anything. … You have to have not only guts, but conviction. I’m not saying I’m smarter than the rest. In fact, one of the keys to our success is knowing that you don’t know everything or you don’t know at all. There’s no ego, hopefully, in our group.”
And in a city where entitlement begets egos and big names intimidate small players, Dennis Uy might be the underdog Filipino entrepreneurs need.