Research 97162

MERCURY DRUG CORPORATION I. Industry: Food and Drug Stores II. Years of Existence: 1945 - Present (66 years) III. Products and Services: Medicines, drug and medical equipments, personal care items, basic household needs, cosmetics and other beauty products IV. Vision & Mission The company's mission is to continuously be the leading, trusted and caring drugstore. V. Organizational Design -VI. Key Executives Mercury Drug Corporation remains a privately held company. Leadership of the company remains in the family: The company's president is Mariano Que's daughter, Vivian Que-Ascona. VII. Innovations/Technology Mercury Drug introduced many "firsts" in the Philippine drugstore industry: •

1948: Motorized customer delivery service o

Que began a drug delivery service, becoming the first to use motorized vehicles for swifter delivery times.

•

1952: 17-hour, 7 days a week drugstore service o

Que expanded his store hours, introducing a 17-hour-per-day, sevendays-per-week opening schedule.

•

1963: Self-service drugstore o

Part of the motivation behind the move came in recognition of a Filipino tendency to auto-medicate their illnesses.

•

1965: 24-hours, 7 days a week service o

By remaining open longer, Mercury Drug responded to its clients' demands for increased access to pharmaceutical products. The new opening schedule was expanded to 24 hours per day

•

1967: Computerized temperature-controlled central warehouse o

The company opened a centralized warehouse to serve its growing store chain, introducing computer-guided temperature controls to safeguard its products.

•

1969: Biological refrigerators to preserve life-saving medicines o

The company became the first to introduce biological refrigerators in its stores. This permitted the company to assure the quality of its lifesaving medicines.

•

1976: Expansion throughout Luzon, Visayas and Mindanao. o

The company expanded beyond the Metro Manila market for the first time, and over the next decades added locations in the Luzon, Visayas, and Mindanao regions of the Philippines as well.

VIII. Company History Mariano Que started his career working in a Manila drugstore in prewar Philippines. There he came into with many medications, including the newly discovered class of sulfa drugs, including sulfathiazole. These new drugs, developed by German scientists in the early 1930s, were quickly hailed as new "miracle" drugs. Indeed, the sulfa drugs enabled the treatment of many illnesses, such as pneumonia, gonorrhea, and other bacterial infections, that previously had been difficult, if impossible, to treat. Despite the fact that the sulfa drugs later were shown to have a number of undesirable side effects (they formed deposits in the kidneys, and bacteria quickly became resistant), they were credited with saving millions of lives around the world through World War II. The end of the war and the liberation of the Philippines by U.S. forces brought new business opportunities in the country. During the occupation, supplies of medicines had become scarce, and the immediate postwar period saw a surge in demand for sulfa drugs, and sulfathiazole, considered by many to be a virtual cure-all. With most

of the country's businesses, including its pharmacies, destroyed during the war, much of the country's trade shifted to its busy marketplaces. Mariano Que, inspired by the new entrepreneurial spirit, used his drugstore experience to launch his own business. At first, Que bought and sold medical vials and capsules. After he had generated sufficient savings, however, he took PHP 100 (worth about $1.50 at the time) and bought a bottle of sulfathiazole tablets. Que brought the sulfathiazole bottle to Manila's busy Bambang market and sold the pills--in single doses. The method of selling, known as "Tingi-tingi," became extremely popular in the poverty-stricken Philippines, bringing life-saving medications within financial reach of many more people than before. Que invested his profits in purchasing more pills, and before long he had generated enough revenue to buy a pushcart, which he filled with an expanding assortment of pharmaceuticals. The unregulated nature of the country's drug market, especially its pharmaceutical black market, led to abuses by sellers, who sometimes peddled fake or dangerous formulations, or sold medications long out of date, often at extortionist prices. Que, however, built a reputation for the quality and freshness of his products, and also for the fairness of his prices. Before too long, he had built up a steady clientele, and in March 1945, Que opened his first store. Que named the Bambang-located store Mercury Drug, after the Roman god and bearer of the caduceus, the symbol of the medical profession. At the beginning of the 1960s, the company was ed by the Ayala Corporation, which was building a shopping center in Makati. Ayala offered to lease space to Mercury, in order to include drugstore services at the center. Mercury agreed, and once again revealed its penchant for innovation, opening the country's first self-service pharmacy in 1963. Two years later, Mercury opened its third drugstore, in Quiapo, which became the company's flagship and set the model for its further development. Mercury Drug began building out its network of drugstores, staying close to the Manila market for much of the early 1970s. The company also began branching out beyond pharmaceutical sales. A significant early purchase was that of Medical Center Drug

Corporation (MCDC). Founded in 1946, MCDC focused on sales of pharmaceutical supplies, equipment, and basic surgical instruments. The purchase of MCDC, complementary to its existing drugstore business, led Mercury Drug to change its structure. In 1972, Que created the Mercury Group of Companies, Inc., which in turn oversaw Mercury Drug and MCDC. Both companies remained independent of the other; in 1980, MCDC changed its name, to Medical Center Trading Corporation (MCTC), in order to highlight its difference from Mercury Drug. MCTC then grew into the Philippines' leading importer and distributor of medical, hospital, laboratory, and related equipment, with branches throughout the Metro Manila and surrounding region. MCTC was not the only venture by Que (who was ed by daughter Vivian QueAscona, later president of Mercury Drug) to expand beyond his drugstore empire. The introduction of the convenience store concept in the Philippines in the early 1980s represented both a new source of competition for Mercury Drug and a new opportunity. Mercury developed its own convenience format in response to the growth of competitors such as 7-11. Typically located next to its drugstores, the Mercury Drug Superstores expanded the company's range of goods beyond drugs and into wider consumer categories, such as beauty and personal care products, fast-foods, and the like. Separately, the Que family added other interests, including the Q*10 convenience store format and the Tropical Hut fast-food restaurant chain. Nonetheless, Mercury Drug Corporation remained the focus of the family's holdings. Mercury Drug's growth was impressive: By 1995, the company operated more than 270 stores. Less than ten years later, Mercury had expanded its number of branches to more than 450, giving it a near monopoly grip on the country's drug sales. By 2004, Mercury controlled as much as 60 percent of all drug sales in the Philippines. Ironically, Mercury's dominant position led the group, which had achieved its early growth based on its low prices, to be criticized for what many considered as its restrictively high prices. Indeed, as some critics pointed out, similar drugs could be

purchased in India and other markets for as much as one-third the price Mercury Drug charged. In the early 2000s, the government began taking action to force the Philippines' drug industry, including Mercury Drug, to lower prices on many life-saving medicines. As part of that effort, the country's Trade and Industry and Health departments began encouraging the parallel importation of pharmaceutical generics from India, which had earned worldwide recognition for the quality of its generic equivalents. In 2004, the government stepped up its pressure. In September of the year, the government ed legislation expanding drug discounts for the country's senior citizens. The country's smaller independent drugstore owners protested the decision, in part because it was expected to serve only to increase Mercury's dominance over the market--as the country's largest retailer of pharmaceutical products, Mercury was easily able to negotiate discounted prices from its supplies. Also in that year, President Arroyo established the lowering of drug prices as one of the government's priorities. In December 2004, the Filipino government announced a new plan to break what some were calling Mercury's "oligopoly" on the country's retail market. The Philippine International Trading Corp. (PICT), owned and run by the Filipino government, announced its intention to organize up to 300 of the country's independent pharmacies into a new network of privately owned and operated drugstores, dubbed "Botika ng Bayan." The new network would then sell drugs, sourced by PICT directly from drug companies, at prices as much as six times less expensive than "market"--i.e., Mercury's--rates. Despite these pressures, Mercury Drug Corporation remained a fixture on the Philippines pharmacy market. The company also remained one of the Philippines' largest corporations, ranking in eighth place among the country's largest corporations and third place among the corporations in the high-quality services/products bracket. Mercury Drug appeared to have discovered its own "miracle drug" for success.

CHEVRON PHILIPPINES,INC. I. Industry: Petroleum Refining II. Years of Existence: 1917 - Present (94 years) III. Products and Services: Chevron markets a full range of petroleum products in the Philippines under the Caltex brand name, including Caltex gasolines and diesel with Techron®, kerosene, jet fuel, and fuel oil. Chevron also markets Caltex Havoline® and Delo® engine oils, along with other lubricating oils and greases.

IV. Vision & Mission Mission: "Our Company's foundation is built on our Values, which distinguish us and guide our actions. We conduct our business in a socially responsible and ethical manner. We respect the law, universal human rights, protect the environment, and benefit the communities where we work." Vision: "At the heart of The Chevron Way is our vision …to be the global energy company most ired for its people, partnership and performance." V. Organizational Design -VI. Key Executives -VII. Innovations/Technology •

In 1954, Caltex inaugurated the Batangas Refinery at San Pascual, the first petroleum refinery in the Philippines. In 2003, this refinery was converted into a finished-import terminal, with a storage capacity of at least 2.5 million barrels.

•

Chevron runs a network of 862 service stations in the Philippines. In 2008, we introduced Caltex E10 with Techron®, an ethanol-blended gasoline, to the Philippine market. In 2009, Caltex Diesel with TechronD

was introduced into the Philippine market as well as newly formulated DELO® and Havoline® products. VIII. Company History Caltex gained its foothold in the Philippines in 1917 when Texas Company (as Texaco was then known) began marketing the products in the Philippines through a local distributor, Wise and Co. Four years later, Texaco (Philippines) was formally established and opened its office in Binondo, Manila. Eleven years later, its Pandacan warehouse depot was converted into a key distribution terminal to bring products by barge to nearby provinces. By 1936, Texaco ed forces with the Standard Oil Company (California) to form Caltex (Philippines) Inc. On the same year, Caltex improved its position dramatically— it increased its capitalization from an initial PHP 2 million to PHP 200 million— transferred to a new office, and opened depots and service stations nationwide, making it the country’s number one oil company. But three years of plunder and neglect during the Second World War wreaked havoc on the company’s facilities. The Pandacan Terminal was destroyed and the Caltex network of depots and service stations were rendered inoperative. After the Liberation, Caltex was able to rebuild and reestablish its distribution and service station facilities. In 1951, the construction of a Caltex Refinery in San Pascual, Batangas began on a 125hectare lot. No less than then Philippine President Ramon Magsaysay was present when the US$60-million Caltex refinery was inaugurated in 1954, becoming the first petroleum refinery in the Philippines. On the same year, Caltex s California Asiatic Oil and Texaco Overseas Petroleum explored the Cagayan Valley for oil deposits. In 1956, Caltex moved its main offices into its own building on Padre Faura Street in Ermita, Manila. The roaring 1960s were marked with a series of milestones that helped Caltex reestablish itself as the country’s premier oil company. The year 1960 saw Caltex introducing Boron gasoline to meet technical advances of automotive engineering. By

1961, Caltex had 2,400 employees and four major installations operating five depots in Luzon, 12 in the Visayas region, and three in Davao. The following year, the Caltex Refinery was already supplying 50% of the country’s national consumption for petroleum products. In 1969, two 108-kilometer pipelines were built from Batangas to Manila that provided a more economical and reliable means of transporting oil products from the Caltex Refinery. The Seventies saw the company on an energy search in the country. Caltex began searching Palawan for oil in 1972. Two years later, it built and opened the Philippines’ first island wharf and storage complex in its Batangas refinery complex to handle deliveries from very large crude carriers (VLCCs). A VLCC can deliver 300,000 tons of crude, which provided at the time about 10 days of the nation’s crude oil needs. In an effort to help the national government’s total energy program, Caltex spearheaded geothermal exploration in Kalinga Apayao and studies on alternative energy sources in 1977. Among the company’s milestones in the 1980s was Caltex’s acquisition of Mobil Philippines’ marketing network, including 500 stations and several depots. It also launched its revolutionary CX-3 gasoline with deposit-control polybutene amine additive in 1982. The 1990s heralded more progress for Caltex’s operations in the Philippines. By 1994, Caltex had the most number of depots and the largest retail network in the country. It upgraded the refinery to 72,000 BPD capacity. Havoline Formula 3 motor oil was introduced. The first Star Mart outlet in Sucat, Parañaque, was opened to the public in 1995, marking Caltex’s foray into convenience retailing. The familiar red star Caltex logo was given a new look and the color of deep ocean green was added to the new Caltex logo that was launched in 1996. The dawn of the new millennium ushered in the merger of Caltex’s two parent companies to form ChevronTexaco—the second-largest US-based energy company and the fifth largest in the world, based on market capitalization. Currently celebrating its 125th

anniversary,

ChevronTexaco

employs

more

than

50,000

working

in

approximately 180 countries around the world, producing and transporting crude oil and natural gas, and marketing and distributing fuels and other energy products. Its associated brands are sold in approximately 30 countries across Asia-Pacific, southern Africa and east Africa. As its more recent accomplishment, Caltex operates a world-class finished product import terminal in Batangas with a storage capacity of roughly 2.7 million barrels. This 2006, in line with the change in its parent company’s name from ChevronTexaco Corporation to Chevron Corporation, Caltex (Philippines), Inc. will now be known as Chevron Philippines Inc. Despite the change, the commitment that the company has shown the local market for the past 89 years will remain the same and the customerfacing Caltex brand and logo will be unchanged at service stations and retail outlets.

MALAYAN INTEGRATED INDUSTRIES CORP. I. Industry: Real Estate II. Years of Existence: -III. Products and Services: -IV. Vision & Mission -V. Organizational Design -VI. Key Executives -PABLO C. VILLABER Owner VII. Innovations/Technology -VIII. Company History --

TEAM ENERGY CORPORATION I. Industry: Power and Energy II. Years of Existence: 1996 - Present (15 years) III. Products and Services: Supply power and generate electricity for the community IV. Vision & Mission Vision: To become the leading and most respected company among IPPs in Asia Pacific. Mission: We are TeaM Energy, the Nation’s growth partner. We generate and supply reliable and affordable energy to uplift lives and promote the sustainable development of the country while creating value for our stakeholders. We are committed and empowered to achieve cost effective, safe and environmentally-sound operations, using superior technology. V. Organizational Design -VI. Key Executives Mr. Federico E. Puno Chief Executive Officer and President Age: 63

Ms. Joy Rivera-Guanlao Environmental Management Officer

Satoru Harada Executive Vice President for Business Dev’t and Corporate Affairs

Greggy Romualdez Senior Manager for External Affairs

VII. Innovations/Technology TeaM Energy received an award from Department of Environment and Natural Resources (DENR) for the sound waste management programs adopted by TeaM Energy’s Pagbilao Power Station at the first Zero Basura Olympics (ZBO) for Business. Spearheaded by Earth Day Network Philippines, Inc., ZBO works towards zero waste in the Philippines, in of the Ecological Solid Waste Management Act of 2000. The project encourages the business sector to apply environmentally beneficial practices and incorporate the 3Rs (Reduce, Re-Use & Recycle) in their day-to-day operations. TeaM Energy Corp. plans to undertake construction of hydroelectric plants that will generate a total of 15 (MWs) megawatts in Benguet. Puno said TeaM Energy planned to expand the Pagbilao coal plant by another 400 MW and the Sual coal plant by another 600 MW. We are committed and empowered to achieve cost effective,

safe

and

environmentally-sound

operations,

using

superior

technology. VIII. Company History TeaM Energy, a partnership between noted Japanese firms Tokyo Electric Power Company and Marubeni Corporation, is one of the largest independent power producers in the Philippines, with over 2 ,000 megawatts (MW) of installed generating capacity. The company was founded in 1996 and is based in Pasay City, the

Philippines. We are committed to working with the Philippine government in addressing the country's energy needs towards promoting sustainable economic growth and development. We own and operate two clean coal facilities, namely the 735 MW Pagbilao Power Station in, the province of Quezon, and the 1,200 MW Sual Power Station in the province of Pangasinan. We also own a 20% stake in the 1,200 MW natural gas-fired plant in Ilijan, Batangas. We are dedicated to the people we serve and empower our local communities through improvements in education, health, infrastructure, livelihood and environmental protection. Our Sual and Pagbilao plants are both ISO 14001-certified, and we have consistently complied with, and exceeded the environmental standards set by the Department of Environment and Natural Resources and the World Bank, making our operations truly world-class. As

environmental stewards, we take the lead in implementing programs that promote the ecological conservation and development of our host communities through various initiatives that aim to not only protect, but nurture our country’s natural resources. Our flagship corporate social responsibility program, Project Beacon (Barangay Electrification Assistance for Countryside Development) which began in 2001 has energized over 1,000 far-flung villages all over the country. This has improved the lives of over a million Filipinos. The project, undertaken at a cost of over Php 1 billion was done in partnership with the Department of Energy, National Electrification istration and various local government units. In a rapidly changing world, we remain unwavering in our commitment to create value for our shareholders, uplift lives, and empower the Filipino.