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I The Entrepreneur

Mr. Cecilio Kwok Pedro

Mr. Cecilio Kwok Pedro is the CEO and President of Lamoiyan Corporation which is
popularly known as makers of the first Filipino toothpaste brand, Hapee toothpaste. He is born of
Filipino-Chinese descent and he is a Business Management graduate of the Ateneo de Manila
University and has received numerous awards and citations, including one of the Ten
Outstanding Young Men award for business entrepreneurship.
He began his life in the business industry as the owner of Aluminum Containers, Inc
which was the major supplier of aluminum collapsible toothpaste tubes of multinational
consumer goods giants Colgate-Palmolive and Philippine Refining Company - now Unilever
Philippines. But when a major shift occurred in the toothpaste segment both these companies
junked their aluminum packaging for plastic laminated tubes. This caused the close down of
Aluminum Containers, Inc. But Mr. Pedro didn’t give up. He used his existing facilities and a lot
of adamant determination and hard work and founded Lamoiyan Corporation.
Mr. Cecilio K. Pedro is also a longtime Christian and for all the logic and deliberation
that went into building Lamoiyan, Pedro acknowledges a very important factor to his success:
faith.
Apart from his strong spirituality, Pedro has also won the admiration for his work in
helping people with disabilities, particularly the hearing-impaired. As chairman of the Deaf
Evangelistic Alliance Foundation, Inc., he has helped in bringing free education to hundreds of
dead-mute Filipinos, some of whom are also employed at Lamoiyan.
For Pedro, success really boils down to grabbing opportunities, both in terms of making
profits and helping others.
II The Enterprise

Mission and Vision

Lamoiyan Corporation’s vision is to have a Lamoiyan product in every home, and their
mission is to improve the quality of life by bringing essential products within the reach of the
common people.

History

In the late 1970s, Dr. Pedro’s Aluminum Containers, Inc. stood as the major supplier of
aluminum collapsible toothpaste tubes to Colgate-Palmolive, Procter and Gamble and Philippine
Refining Company (PRC) now Unilever. Aluminum Containers, Inc. enjoyed profit growth due
to the increasing demand from the country’s leading toothpaste manufacturers.
However, in 1985, these companies began using plastic laminated tubes. Although this
caused Dr. Pedro to close his factory, he realized his old equipment could still be put to good use
by forging into the Philippines toothpaste market on his own. Two years later, he reopened his
factory as Lamoiyan Corporation, now known as the manufacturer of toothpaste brands’ Hapee
and Kutitap.

Growth

When Dr. Pedro entered the market in 1988, the big toothpaste makers controlled 99% of
the market. Today, that figure has dropped down to 65%. The first step of Dr. Pedro's strategy
was to target the multi-nationals' achilles' heel: price. While Dr. Pedro knew that he could not
compete in areas such as promotion and distribution, his decision to cut price by 50% won an
immediate response from consumers. However, when Colgate followed suit with a 20% price
cut, Dr. Pedro turned to market diversification. Among other things, he developed multi-flavored
toothpaste for children. It took Colgate three years to respond, but by that time, Lamoiyan had
already successfully captured the new market.
With perseverance and effective advertising, and by selling his product at a price 30%
lower than the leading brands, Dr. Pedro succeeded in making Hapee the No. 3 toothpaste brand
in the country.
In addition, Dr. Pedro targeted specialized markets, by diversifying his product line to
include Hapee Kiddie Toothgels, Dazz Dishwashing Paste and Dazz All-Purpose Kitchen
Cleaner, Fresher feminine wash and Gumtect, a special gum-formula toothpaste , which larger
companies did not find profitable.
Lamoiyan Corporation has been recognized as the Most Outstanding Toothpaste
Manufacturer by the Consumer's Union of the Philippines for seven years. The company was
also recognized by the Personnel Management Association of the Philippines (PMAP) as having
the Most Outstanding Program for Equal Employment.

Expansion

With this drive and faith, Dr. Pedro has no plans of slowing down. In November of 2004,
Lamoiyan has earmarked P100 million to expand its business and establish presence in
neighboring countries such as China, Vietnam, and Indonesia, and later on become the preferred
brand in Asia. Dr. Pedro stated that the fresh capital would be used to acquire additional
machinery that would double the firm's toothpaste production capacity to 6,000 tons which
equates to approximately 1.5 Billion Pesos in total revenue. Dr. Pedro said the company's
expansion plans were meant to support its bid to become a transnational company. "We are
working to establish overseas operations, initially in Vietnam, and we hope to do this within the
year," he said. "We want to be the Colgate of Asia and we can only do this by getting bigger."
He added that the increase in the capacity of Lamoiyan's Bicutan factory meant doubling
its 60-person workforce, a third of which are hearing-impaired. In 2003, Lamoiyan grew by 12%
and the company hopes to repeat this record this year.

Social Responsibility

While enjoying the success of being the first Filipino to ever penetrate the toothpaste
market that has been dominated by multinational companies, Dr. Pedro has chosen to use his
entrepreneurial skills to help provide opportunities to others. A staunch advocate of the hearing
impaired, Dr. Pedro helps provide free college education to at least 180 deaf-mute students
through the Deaf Evangelistic Alliance Foundation, Inc. (DEAF), which he currently chairs. He
was recognized by the Department of Education, Culture and Sports for the continuing efforts of
D.E.A.F. providing education to the hearing-impaired in alleviating their conditions and
providing them with adequate education.
Dr. Pedro also employs over 30 deaf-mute staff in his company, and helps provide them
with free housing. To narrow the communication gap between his hearing-impaired and hearing
personnel, Dr. Pedro has also required his managers to learn sign language.
“My primary intention is to encourage more businessmen to be socially responsible—to
help people and to give back to the community,” he shares. “Being socially responsible is not
only taking care of the hearing impaired, but also taking care of your people. You provide a
decent place where they can work safely,” he adds. “I also believe in taking care of my
employees’ physical, intellectual, and spiritual well-being.” Of these three aspects, Dr. Pedro
puts a premium on creating means by which his people can grow spiritually. His company holds
regular Bible studies and prayer meetings to help make food for the soul. Their singular
corporate motto is “Making the difference for the Glory of God.”

III The Entrepreneurial Opportunity

Mr. Cecilio Pedro, chief executive and president of Lamoiyan Corporation believes that
periods of crisis also provide numerous opportunities; it really just depends on how one chooses
to view the situation.
For 8 years since 1977, his former company – Aluminum Containers, Inc. – was raking in
as the major supplier of aluminum collapsible toothpaste tubes to multinational consumer goods
giants Colgate-Palmolive and Philippine Refining Company - now Unilever Philippines. But
products, especially those peddled to mass consumers, are constantly in a state of evolution. And
in 1985, one of these major shifts occurred in the toothpaste segment when both companies
junked their aluminum packaging for plastic laminated tubes and almost in an instant, Aluminum
Containers’reason for being ceased.
But Pedro wasn’t about to give up. After all, he still had the equipment, which could still
be utilized somehow. “I had to find a business that would make use of my existing facilities,”
Pedro recalls. The most logical option he thought was to make his own toothpaste.
Still, this proved to be easier said than done. “Initially, my capital was very small, and
you need a lot of resources to compete,” he admits. Pedro thought of forming joint ventures with
other companies from abroad, but found the royalties to be too expensive. “I was forced to create
my own brand locally,” he says. To accomplish this, he knew he had to find a source or a
supplier that could help him with the technical expertise of producing toothpaste. He found one
through a friend: a company that was making toothpaste for hotels in Japan who agreed to assist
him with the technical know-how. The knowledge may have come from Japan, but Pedro wanted
a product that was unmistakably Filipino. He wanted to use local flavors, and he and his team
researched and tested close to 200 formulations until they found what they thought to be the most
ideal. The whole process took two years, and in 1987 he opened Lamoiyan, better known in the
market as the makers of Hapee toothpaste.
To sell Hapee against well-entrenched foreign brands like Colgate-so strong a brand
name that many Filipinos at the time used it almost generically to refer to all kinds of toothpaste
– Pedro had to come up with an effective marketing strategy to attract consumers by first pricing
his product at around 30 percent lower than the leading brands and by coming up with an
effective advertising campaign that had strong recall. The result? Lamoiyan now has the No. 3
toothpaste brand in the Philippines. Lamoiyan is 100% Filipino-owned company.
Most importantly, the confidence gained by the company from this initial success has
allowed Lamoiyan to diversify its product line, which now includes Dazz dishwashing paste and
liquids, Tenderly fabric enhancer, Fash liquid detergent, and Gumtect, a special gum-formula
toothpaste.

IV The Enterprise’s Target Market

As it was already discussed in Chapter 2, when Dr. Pedro entered the market in 1988, the
big toothpaste makers controlled 99% of the market, but then today, that figure has dropped
down to 65%. This came about when Mr. Cecilio K. Pedro cut price by 50% and won an
immediate response from consumers. But aside from competition purposes, this decision of
cutting price was also to achieve Lamoiyan Corporation’s mission and vision which are
primarily directed toward the common Filipino people. By this we have identified that the
corporation’s primary target market ranged within the middle classed group and the lesser
fortunate Filipinos of the country.
When Colgate followed suit with a 20% price cut, Dr. Pedro turned to market
diversification. Among other things, he developed multi-flavored toothpaste for children. It took
Colgate three years to respond, but by that time, Lamoiyan had already successfully captured the
new market.
With perseverance and effective advertising, and by selling his product at a price 30%
lower than the leading brands, Dr. Pedro succeeded in making Hapee the No. 3 toothpaste brand
in the country.
In addition, Dr. Pedro targeted specialized markets, by diversifying his product line to
include Hapee Kiddie Toothgels, Dazz Dishwashing Paste and Dazz All-Purpose Kitchen
Cleaner, Fresher feminine wash and Gumtect, a special gum-formula toothpaste , which larger
companies did not find profitable.

V The Entrepreneurial Lessons

Mr. Cecilio Kwok Pedro’s hardwork, perseverance, and incredible faith have truly
inspired us. Lamoiyan Corporation’s Hapee toothpaste success story is a story that every aspiring
entrepreneur should hear. We are grateful to discover the following lessons: (1) Success really
boils down to grabbing opportunities, both in terms of making profits and helping others; (2)
Choosing people who will work for us and with us should be done carefully; (3) There will be
certain stages in our business that competition will be fierce, thus it is necessary for us to have
faith and believe that we can carry through; (4) We should start small but we should always think
big, thus we need to consider global penetration; (5) And lastly, we can always make our own
brand!.
Mr. Cecilio Kwok Pedro
The man behind Hapee toothpaste

In completion of the requirements in

Ent102: Business Opportunities 1

MWF 6:30-7:30 PM

Submitted by:

Nur-Hannah L. Saad

Ailene D. Lisay

Rowell S. Tan

Jose Francisco Uy

John Robert Burbano

Ria Joy G. Grecia

Ava Jugan

October 4, 2010

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