BUSINESS BITS

Meat of the matter

Prima Gracia Sarmiento and Katrina Tan

By establishing a reputation as a reliable supplier of pork, the Serrano couple of Pitril, Tondo, grew their business as their customer list expanded Filipinos are among the biggest pork consumers, with annual per capita consumption of 14.5 kg (32 lbs.). Indeed their hearty appetite for pork sustains lucrative P100 billion swine-raising industry, which consists of several medium- and large-scale commercial farms as well as thousands of backyard hog raisers in various parts of the country.

But an important link between the hog raisers and the pork processors and consumers are the commercial pork buyers and sellers- the middlepersons who buy hog carcasses in bulk from farms or slaughterhouses, cut the carcasses to order, and distribute them wholesale to meat processors and wet-market vendors.

Among them are Alvin and Edith Serrano, the husband-and-wife owners of Aldith’s Meat Shop, a major pork wholesaler and retailer based with outlets in Divisoria and Tondo, Manila. From a volume of only one or two hog carcasses daily when it started in 1985, the business now handles daily volume of 120 carcasses.

The couple buys them from their network of hog suppliers, then butchers them for distribution to meat processors, food-service establishments, and end-consumers in Metro Manila. Currently, the business employs 20 people and now also has a meat-cutting plant at the ground floor of the three-story building that the Serrano couple had built in Pitril, Tondo.

Edith Serrano comes from a family of pork suppliers. Along with her two brothers who are also pork wholesaler and retailers like her, she learned the business from her parents. The Linsangans sold pork in a small stall in Divisoria, and Edith recalls that when she and her five siblings were young, her father required all of them to work in the family-owned meat shop. She thus learned the intricacies of the pork supply business as she grew up and got her formal education.

In 1985, shortly after getting her management degree, Edith set up her own meat shop in Divisoria. Three years later, she married her boyfriend, Manila policemen Alvin Serrano. She asked him to help out in the business, but Alvin decided to keep his regular job and only assisted her whenever he could after his working hours. “Tinulungan ko siyang mag-retail, doon din ako natutong maghiwa ng baboy [I help her do retailing and also learned pig butchering in the process],” Alvin says.

Working on a revolving capital of P3,000 and a profit margin of only 10 percent, the couple at the start would dispose of an average of two hog carcasses a day on retail – just enough to sustain the business and out food on the family table. But Alvin and Edith were ambitious and wanted to grow their business beyond simple retailing. “Sa retail kikita ka, pero hanggang doon ka na lang {There’s money in retail, but that’s just about it},” Alvin says.

To expand their market, the Serranos worked hard to establish supply lines for their pork to canteen concessionaires. Alvin, acting on tips he got from acquaintances, would make cold calls to prospects or visit them, offering supply them pork at process slightly slower than those at prices. By 1991, the couple had become suppliers to several canteen concessionaires, and they used P40,000 of their personal saving to keep up with the demand for hog meat from their costumers.

The business continued to grow and from 1991 to 1995, the Serranos were turning over 10 to 15 carcasses a day, mostly to canteen concessionaires; the rest they sold through their meat stall in Divisoria. Although the couple already had three worker then, the couple had to work long and stressful hours to keep up with the growing volume of the business.

The year 1996 gave the Serrano couple an even bigger opportunity to expand their business. “Dumating ang panahon na dumagsa ang baboy. Maraming nag-aalok [That was the time when the demand for pork became so strong and we got so many offers from suppliers],” Edith recalls. Her brothers, who at that time had already been supplying pork to several meat processors, encouraged her to go into the same business as they themselves had been having a hard time keeping up with the fast-growing demand for pork meat.

Alvin and Edith didn’t pass up the opportunity. They borrowed P350,000 from acquaintances and immediately bought 30 carcasses to initially supply one of the meat processors. The couple developed a reputation as a reliable pork supplier, and soon they were getting supply contracts from other to recover their initial investment and settle their debts in only a year’s time.

Today, 11 years later, Aldith’s Meat Shop has became a thriving business. The proceeds from the venture had enabled the Serrano couple to built their won house in Tondo, where they also run a meat ship retailing pork to their neighbors. They also derive extra income from renting out rooms in a three-story apartment building they had built. Because business has been good, the Serranos are able to send their two children to study in private schools.

Apart from the financial rewards of the business, Edith says she also feels fulfilled in having succeed in a business that she had grown to love over the years. “Sa totoo lang, hindi ko maisip and sarili ko sa ibang negosyo maliban sa pagiging magbababoy [I can’t see myself doing any other business than being a pork meat buyer and seller], she say.


Carving a name in animation
The animation process is tedious. Animators spend a great deal of time on the drawing board doing digital inking, two-dimensional and three-dimensional animation, and several other steps before they can breathe life to a narrative in the form of a full motion picture. Although animation as a business has been around for two decades, it is only now that the Philippines fund itself on the brink of carving a name in the global animation arena.

As an outsourced service, animation has a huge market. Worldwide, it’s a $70-billion industry, and “grows 70 percent every year,” says Grace Dimaranan, President of the Animation Council of the Philippines, Inc. (ACPI), a non-profit organization promoting Philippine animation here and abroad. “When computers and the internet were introduced, [animation] was no longer confined to TV or movies, but [spread] to mobile and Internet content, special movie effects, and the number one billion-dollar industry, video and online gaming.

This significant surge in demand has led to a rise of outsourcing jobs to China, India, and other Asian countries. The Philippines possesses several competitive advantages in the animation field. Aside from providing affordable services, the country boasts an ample supply of skilled and creative workers, and a strong affinity with the Western Culture, language, and humor. In fact, Filipinos have already done a lot of work for international companies, the likes of Disney, Hanna-Barbera, Warner Bros., and TOEI Japan. They have also played a part in creating several hit movies, including Toy Story, Finding Nemo, and Pirates of the Caribbean; as well as a number of popular cartoons, such as Scooby Doo, Tom and Jerry, and The Flintstones.

Animation is also one of the five sectors of business process outsourcing (BPO) – the others being back office processing contact center, engineering design, medical transcription, and software development – on whose strong performance the Philippine government is hoping to hitch on the country’s economic recovery. There are currently 25 ACPI members, including production studios, training center, and equipment distributors and around 50 animation production houses in the country, majority of them based in Metro Manila, according to Eric Tansingco of Take one Animation.

“Animation is long term investment. Don’t expect to get regular monthly income – you may get several million for one project, and nothing the next months,” says Mina Caliguia of ArtFarm Asia, an animation company that used to be content production and training firm. She says one should expect to invest anywhere between P3 million and P100 million on computers, scanners, printers, tables, chairs, concept and cork boards, among other equipment, as well as on operation costs.

Although business registration requirements are similar with other businesses, new players must take care to acquire the proper software licenses.

Business owners must also produce good, sellable work. Dimaranan agrees that the animation business survives through the talents and skills of animators. Don’t attempt to enter the business by just setting up and buying the equipment, without the [right] people to handle the job.”

Caliguia, for example, glimpsed a future in animation when her husband, Nelson, kept bringing home a monthly income of as high as P60,000 to P70,000 from his job as a freelance animator. After a friend offered a place in which to set up, the couple opened Artfarm Asia in 1994 with less than 10 employees. The first few years were difficult, but after just one major project for a Roger Corman movie in 1996, ArtFarm was able to earn its initial investment.

“It’s crucial for outsourcers to tie up with at least one foreign company to have regular work,” says Caliguia. “Another difficulty is that clients will always expect you to finish everything to the last detail. Animation, although it’s done by hundreds of people, must end up looking like it was done by one person.”

ArtFarm now counts around 30 employees and 15 to 20 freelance animators. To ensure a steady income, ArtFarm also offers training and commercial and music video production, which Caliguia refers to as “trip” projects. “Training brings in about 60 percent of our earnings,” she says,

Indeed, the animation industry looks primed for growth not only in outsourcing but also in developing original content. “If we continue competing with lower pries, we will eventually lose out other countries,” says Caliguia. “I believe our strongest competitive advantage is design and concept. We should come up with our own original content for the global market.”

As for those looking to animation as a short-term investment, Transingco says your company’s value would depend on its poll of clientele and site of set-up. “But I personally don’t have any plans of selling [the business] because I can see potential expansion in the next few years.”