The Entrepreneur Of The Year Philippines 2019 has concluded its search for the country’s most successful and inspiring entrepreneurs. Entrepreneur Of The Year Philippines is a program of the SGV Foundation, Inc. with the participation of co-presenters Department of Trade and Industry, the Philippine Business for Social Progress, and the Philippine Stock Exchange. In the next few weeks, BusinessWorld will feature each of the finalists for the Entrepreneur Of The Year Philippines 2019.
Alexander Cruz
Chairman and CEO
XRC Mall Developer Inc.
AS A CHILD, Alexander Cruz had to sell salt and fruits in a public market to fund his schooling.
Today, the chairman and chief executive officer (CEO) of XRC Mall Developer Inc. has built 28 community malls and five public markets with the goal of bringing growth to the countryside.
At the age of 12, Mr. Cruz started working to support himself, pushing carts of shoes from one department to another in a Caloocan shoe store. He wanted to study further so he worked out a deal with a relative to work for food and lodging near his high school.
Knowing that college would be a different challenge, Mr. Cruz was fortunate enough to be awarded a full Meralco Foundation, Inc. scholarship. He completed his Bachelor’s degree and started working for a construction company.
Then misfortune struck. In his third month on the job, he slipped on a walkway and fell into 2 feet of molten metal. Despite excruciating pain, he was able to pull himself out. He spent a year in the hospital recuperating before eventually returning to work.
Despite having a steady job, Mr. Cruz felt challenged to increase his income. His father-in-law suggested microfinancing and gave Mr. Cruz P50,000 as starting capital. This idea sparked Mr. Cruz’ business acumen and he began offering microfinancing services at the local wet market after office hours.
Seeing better profit potential in microfinancing, Mr. Cruz decided to focus on his business.
Coincidentally, the construction company decided to downsize at the time and he opted for voluntary retrenchment. Utilizing his retrenchment package, he was able to further grow his microfinancing business until he was able to buy his first commercial building and a home.
In time, Mr. Cruz noted that more people started entering microfinancing. This prompted him and his wife to upgrade to the pawnshop and money exchange business. Mr. Cruz was able to build his clientele, leading to a dramatic growth to 43 branches in 10 years. He eventually sold the business, however, after robberies resulted in the deaths of a family member and an employee.
With the proceeds from selling his pawnshop business, he was able to build his first XRC community mall in Angono, Rizal in 2002, in front of a public market. His first anchor tenant was a well-known department store. Mr. Cruz relates that, back then, he was not keen on bank financing and preferred to grow organically. His second XRC mall in Morong, Rizal, was funded internally. It was only after his fifth mall that Mr. Cruz started to look into bank financing, using the assignment of receivables from his commercial leasing revenues as collateral.
He also ventured into other developments. He recalls when his wife jokingly asked him to give her a hotel as a gift, which led Mr. Cruz to building their first hotel in Puerto Galera. This was followed by five other hotels in various locations such as Iligan and Batangas.
One of Mr. Cruz’s strategies to ensure the success of his mall is to plan out his tenant base to create a full ecosystem that supports the businesses. For example, he put up malls next to his hotels to guarantee good foot traffic and a captured market for his tenants. He also offered spaces to call centers since their employees are potential mall patrons.
Mr. Cruz also prefers to lease land for around 30 years so that he can use his funds for construction of the mall rather than purchase of the land. He claims that by doing so, he is able to gain his return on investment in just four to five years.
Yet, Mr. Cruz never forgot his roots and started focusing his time and experience in transforming the concept of public wet markets around the country. Remembering how he had to use disgusting public toilets as a child, Mr. Cruz ensures that all the public markets he constructs contain clean facilities. He invests in premium toilets, generators, fire detectors and CCTV systems for the safety and convenience of both tenants and customers. He also established a security agency to help guard his projects.
He constantly takes the initiative as a first mover, using a combination of his experience, instinct and data to analyze if a location holds any potential for a mall. He firmly believes in developing the untapped potential of the countryside through his commercial spaces, ensuring quality facilities, new commercial opportunities and increased employment by bringing in business process outsourcing businesses and tenants that also operate in metropolitan areas. He claims XRC Malls fills the niche between larger mall developers and public markets.
In developing malls in rural areas, he hopes to help decongest areas like Metro Manila by directly bringing the mall experience and employment opportunities to those in the provinces.
He explains that true success for him is being able to uplift the lives of those in the countryside.
Growing up while working in public markets, Mr. Cruz considers his biggest strength to be his ability to relate with those living on the peripheries of society. He anchors his leadership on good intentions, fairness and compassion tempered with practicality. He relates how he would be more lenient with first-time tenants who were just starting out, although he also says he does his due diligence to ensure his goodwill is not abused.
His heart for the community shows best through XRC’s corporate social responsibility services, held through the Xander Youth Foundation. Named after their late son, the foundation offers pre-school education and meals for free.
In addition, Mr. Cruz shares his dream to help create meaningful and gainful employment for people in the countryside. He sympathizes with people from rural areas who are forced to leave their families to find employment in Manila or overseas.
He hopes that by developing more retail spaces in rural areas, he can help encourage other business owners to create jobs and help Filipino families in the countryside stay together.
The official airline of the Entrepreneur of the Year Philippines 2019 is Philippine Airlines. Media sponsors are BusinessWorld and the ABS-CBN News Channel. Banquet sponsors are Global Ferronickel Holdings, Inc., Jollibee, Udenna Corp. and Uratex.
The winners of the Entrepreneur Of The Year Philippines 2019 will be announced on Oct. 15 in an awards banquet at the Makati Shangri-La Hotel. The Entrepreneur Of The Year Philippines will represent the country in the World Entrepreneur Of The Year 2020 in Monte Carlo, Monaco in June 2020.
The Entrepreneur Of The Year program is produced globally by Ernst & Young.
