Get to know more about Mighty Corp’s exec Oscar Barrientos

 

Retired Regional Trial Court Judge OSCAR P. BARRIENTOS has found himself on the other side of the defence as defender of the cigarette manufacturer Mighty Corp.

 

As the executive vice president of Mighty Corp., Barrientos also doubles as company spokesman. He has become the face for the low-profile owners of the wholly-owned Filipino cigarette company, who have been doing their business for 68 years quietly and away from the prying eyes of the media and even from competitors.

 

But the former judge, who also leaches marketing and finance, sees his role in Mighty more of a battle in actual grassroot marketing rather than a courtroom drama.

 

Chinese migrant Emmanuel Wong Chu King founded La CampanaFabrica de Tobacos Inc. in 1945 as his way of helping Filipino war victims.

 

At first, Wong Chu King, married to Nelia, a Filipina, did everything from blending the tobacco to working as salesman, delivery man, collector, cashier and promoter of his products. The Company specialized in producing native cigarettes. The iconic La Campana and Magkaibigan were the company’s original brands.

 

In 1985, Mighty Corporation was established and became the American blended Virginia Cigarette Manufacturing Co. In 2001, Mighty entered into a cigarette manufacturing agreement with Sterling Tobacco to produce the latter’s trademarks. In 2004, the company entered into a cigarette manufacturing agreement with the Philip Morris Philippines as the latter brought the trademarks of Sterling Tobacco.

 

The rest is history. What used to be just a simple native cigarette manufacturer has expanded to become not just an industry pioneer but a force to reckon with under one name Mighty Corporation.

 

Barrientos, who joined Mighty Corporation a year ago upon the encouragement of the owners who happened to be good friends of his, can only at least in the best position that this company has to offer and will continue to offer.

 

While Mighty focuses on the non-premium cigarette brand, it does not lose focus on what makes it stick all these years. It has remained faithful to what it does best, producing cigarettes for the Filipinos market content with a 3 percent market share.

 

“Mighty has good taste, good price and good packaging,” stresses Barrientos.

 

While both prices for premium and the non-premium brands were adjusted to account for the increase in excise tax, the non-premium has a lower tax increase and therefore it has lower price hike while the premium brands have to endure with the huge price hike making them more expensive to the ordinary smoker.

 

As prices of cigarettes become more expensive, most smokers can no longer afford the premium cigarette brands so they shift to the non-premium brands benefitting Mighty, which has a total of 23 brands.

 

But Mighty has another big edge: Its clear understanding of the domestic market, which it has been serving well and faithfully for the past 68 years.

 

“We have a very good distribution system focusing in the rural areas. Our distribution system touches system right down to the grassroots,” says Barrientos.

 

In fact, Mighty is very strong in the Zamboanga area. Its premium competitors though have been concentrating in the big cities and their distribution are mostly in big supermarkets.

 

“We understand the market better,” says Barrientos, who finishes his MBA at the Asian Institute of Management.

 

Another unique strategy is the company’s credit line offer to the rural sari-sari stores. This strategy does not only ensure that small stores carry Mighty products, but also augment the poor Filipinos capital to enable them to continue their small business.

 

This has endeared them to the sari-sari store owners, who now prefer Mighty grateful for the lifeline provided to them.

 

According to Barrientos, 70 percent of Filipino smokers buy by the stick, not packs.

 

The company has also tapped the direct selling network to further beef up its market.

Barrientos explained that at the end of the day, the price of a merchandise will redound to the cost of production plus margin.

 

In the case of Mighty, it has never gone overboard in its expenses. Its operation has remained low cost with not much overhead cost.

 

“In the first place, we don’t have expats personnel to pay for. An expat can easily command $10,000 salary a month,” says Barrientos. Maintaining expats is expensive because the employer must also consider they have a lifestyle to keep.

 

All these years, Mighty has remained a low maintenance firm. It holds its headquarters in Makati, along the PasigRiver which also serves as the residence of the company owners. Most traditional Chinese businessmen also reside in a building where they do their business. This lean organization is simple and bereft of the trappings of the high-end offices in Makati. It operates in an old but well-maintained

building.

 

“Our strategy at the plant is to produce low cost but quality cigarettes, but we go for volume because there is a strong demand for our products,” says Barrientos.

 

Its CSR program is mostly providing education to poor but deserving students. Now, it’s scholars are mostly children of tobacco farmers numbering 100 and is expected to reach 500 this year.

 

This scholarship program, which is geared for the tobacco farmers or through the Federation of Tobacco Farmers, has been going on for the past ten years already.

 

Part of its CSR program is to help improve the quality of local tobacco produce so they will not import anymore in the long run.

 

“Why is the imported tobacco has better quality than the locally grown when they come from the same seeds,” says Barrientos.

 

The company also extends assistance to affected families during calamities without any fanfare. Barrientos relates that his father was a chain smoker who could consume three packs a day, but he does not smoke nor his seven other siblings.

 

“But I don’t feel guilty being in this industry,” says Barrientos of his work in the cigarette industry, which is known to cause lung cancer.

 

“The health warning that cigarette is addicting is right although it has no effect to some,” notes Barrientos.

 

His being in the industry does not give him also the license to encourage others to smoke.

 

“I will not encourage anyone to smoke, but let them find their own stick. Parents are only there to guide, although children may not follow them 100 percent,” says Barrientos, who used to play golf until he joined Mighty.

 

“I was supposed to be enjoying my retirement, but I was called to this job, something that I cannot refuse because it is very challenging. Aside from that, one of the owners is a good friend of mine and they treated me well and that’s what they’ve been doing with the rest of the employees,” says Barrientos, who finished law and management from the Pamantasan ng Lungsod ng Maynila and the Philippine Christian University.

 

“This is a family-owned corporation, but the owners are very fair and professional. I enjoy this job, otherwise I should have left already. It’s good to meet new people and become part of this company,” says Barrientos.

 

“I am happy here. Definitely, I am in the right company,” says Barrientos.

Mighty Corp, other companies’ workers completed training seminar

Thirty people, including 17 from local tobacco manufacturer Mighty Corp., have completed a proficiency-training seminar conducted by American experts on tobacco leaf utilization, leaf chemistry and leaf purchases.

The seminar, jointly conducted by MC and American Tobacco Associates (TA) Inc., also trained the participants on the US Leaf Standards Grading System for both Burley and flue-cured tobacco developed by the US tobacco industry in the early 1900s.

Bobby Wellons, tobacco training specialist from the US Department of Agriculture (USDA) conducted the US Leaf Standards Seminar on Burley and flue-cured together with TA’s vice president, Hank Mozingo.

According to retired Gen. Edilberto Adan, MC president, understanding leaf tobacco grading standards provides the foundation for learning and appreciating tobacco qualities and characteristics in the Philippines.

“More specifically,” he said, “the seminars helped those directly involved in tobacco manufacturing gain a better understanding of the unique characteristics of each US tobacco grade and which grades are more suitable for specific blend needs.”

While MC provided all the necessary on-site assistance and essentials, the TA group supplied all tobacco samples and training materials.
The short but comprehensive course was conducted at the new MC facility (Pavilion) located inside the factory grounds.

Aside from the MC participants, the others came from the National Tobacco Administration, Universal Leaf Philippines, Trans-Manila Inc., Continental Leaf, Prudence and WCD.

The first two days of the seminar focused on the Burley tobacco grades and characteristics. The remaining three days covered flue-cured.

At the end of the training course, each participant received a certification from USDA for completing the program.

Overall, the tobacco grading seminar has successfully served its purpose, providing participants with a deeper and a more extensive knowledge on the different sectors of the tobacco industry.

Group delighted over Mighty Corp’s initiative

FARMERS in Pangasinan and the Ilocos provinces have expressed relief that their tobacco leaves will have a sure market this year.

Expressing relief was Mario Cabasal, president of the National Federation of Tobacco Growers and Cooperatives (NFTGC) after learning that Mighty Corp has made commitments to initially buy at least 10 million kilograms of tobacco leaves at an average price of P70 per kilo and buy all the excess tobacco leaves that farmers could not sell to other buyers.

“We limited to minimum areas fields planted to tobacco last year in anticipation of depressed demand due to the scheduled implementation of the sin tax,” Cabasal said. “good thing, some farmers were able  to sell part of their low-grade harvests to Mighty Corporation in 2013,” he pointed out.

“Now that we are assured of an alternative market, besides other tobacco companies, our members will again be inspired to devote larger areas to the cultivation of Ilocandia’s most important cash crop,” he said.

Fearing that tobacco prices and demand for the yellow leaf would dive as a result of the new excise tax law on cigarettes, many farmers in the Ilocos Region shifted to planting yellow corn, the only other cash crop that thrives in dry land where rainfall is scarce during the summer months. Profits from corn are, however, lower than tobacco.

Planting of the golden leaf started last month and selling the dry leaf often peaks just before the Holy Week.

“With Mighty’s assurance that the company will buy all the unsold tobacco harvested by farmers, we can also be sure that unlike in the past, prices will stay high even after the holiday season. Price cut downs on harvests after the Holy Week was an old practice of middlemen from Ilocos Norte to Pangasinan.

Use of tobacco dust pushed by Mighty Corp

Tobacco, used in the manufacture of cigarettes, can also be used as an organic pesticide against insects as aphids, leaf rollers and stem borers. It is an even more effective and much safer pesticide than chemical-based ones, which destroy soil productivity and harm the environment.

Filipino cigarette manufacturer Mighty Corp (MC) plans to develop and promote the alternative use for tobacco, to help reduce Filipino farmers’ reliance on chemical-based pesticides, increase tobacco farmers’ income, and protect the environment.

Oscar Barrientos, MC executive vice president and spokesman, said the move was part of the company’s corporate social responsibility thrust. He noted that a small but growing number of Filipino farmers were shifting from chemical-based to organic pesticides, or a combination of the two. “This trend should be encouraged,” he added.

The company coordinating with key agencies as National Tobacco Administration (NTA), Fertilizer and Pesticide Authority (FPA) of the Department of Agriculture (DA) and University of the Philippines in Los Baños, Laguna (UPLB) in this effort.

Filipino farmers make up 11.55 million of the country’s 38.6-million-member labor force and contribute 20 percent of its gross domestic product. Insects and other pests have adversely affected farmers’ production of main agricultural crops, including rice, corn, coconuts, sugarcane, bananas, pineapples, coffee, mangoes and abaca. Also affected are secondary crops like peanuts, cassava, sweet potatoes, garlic, onions, cabbages, eggplants, calamansi, rubber, and cotton. Nicotine from tobacco has been used on crops as a natural insecticide that does not have the health and environmental risks of chemical-based pesticides.

 

Mighty Corp continues to slice up the market share

Bulacan-based Mighty Corp. will continue to eat up a slice of market share from rivals as the Wongchuking-owned tobacco firm believes it offers quality but cheaper alternatives to expensive cigarette brands, a company official said.

In a briefing late Thursday, Oscar P. Barrientos, Mighty executive vice-president, said smokers continued to shift from premium brands to cheaper alternatives this year as prices of cigarettes in the domestic market rose due to reformed excise tax law.

“Mighty’s market share is rising because of our very competitive price as well as quality of our cigarettes,” Barrientos told reporters. “Consumers are shifting from premium to low-premium brands after the new excise tax law.”

Barrientos said Mighty’s market share grew from 5 percent in 2012 to between 10 percent and 12 percent last year. The company earlier claimed its market share stood at 20 percent in 2013.

“For this year, we’re targeting to expand it by two percentage points, or 12 percent to 14 percent,” Barriento said. “The country’s tobacco industry is estimated to be more than 100 billion sticks annually.”

Barrientos said the company currently sells its Mighty brand for P26 to P27 a pack, while Marvel brand for P25 to P26 per pack, both higher by P5 compared with last year’s retail price, reflecting the P5 increase in excise tax rate this year.

However, some retailers sell Mighty brand at P23 per pack, while Marvel brand P18.4 per pack.

Barrientos, meanwhile, noted a slight decline in number of adult-smokers in 2013 based on the report of the Department of Health (DOH).

But despite the decline in smokers’ population, Barriento said Mighty is still positioning for the forthcoming unitary excise tax rate of P26 per cigarette packet by 2017.

Barrientos said Mighty expects demand for low-premium cigarette brands will decline in 2017, while premium brands may regain their popularity in the next three-years.

“That’s why we launched our premium brands King and Chelsea in a bid to firm up our position.” the company executive said. Mighty is currently the country’s second largest cigarette firm in terms of market share, next to PMFTC Inc.

Barrientos, meanwhile, just shrugged off Marlboro-maker and Lucio Tan’s foreign partner, Philip Morris International (PMI), accusations against Mighty of tax dodging.

“Those are baseless accusations by Philip Morris,” Barrientos said “But we’re ready to face investigations by authorities. Our factory is open to any inspection by Bureau of Internal Revenue (BIR) and Bureau of Customs.”

Barrientos also explained the company managed to lower its operational cost as it does not pay royalty to foreign headquarters, like in the case of PMFTC, and has no foreign consultants or employees.

He, meanwhile, revealed that Mighty’s manufacturing cost of cigarette per packet declined last year from 2012 as the company expands its market share.

“Our cost per pack of cigarette is around P3.5 to P4 [excluding taxes], this is cheaper than in 2012 when our market share was small. We managed to reduce the cost as Mighty expands market share due to economies of scale,” Barrientos explained.

Mighty Corp emerged its market share

Bulacan-based Mighty Corp. will continue to eat up a slice of market share from rivals as the Wongchuking-owned tobacco firm believes it offers quality but cheaper alternatives to expensive cigarette brands, a company official said.

In a briefing late Thursday, Oscar P. Barrientos, Mighty executive vice-president, said smokers continued to shift from premium brands to cheaper alternatives this year as prices of cigarettes in the domestic market rose due to reformed excise tax law.

“Mighty’s market share is rising because of our very competitive price as well as quality of our cigarettes,” Barrientos told reporters. “Consumers are shifting from premium to low-premium brands after the new excise tax law.”

Barrientos said Mighty’s market share grew from 5 percent in 2012 to between 10 percent and 12 percent last year. The company earlier claimed its market share stood at 20 percent in 2013.

“For this year, we’re targeting to expand it by two percentage points, or 12 percent to 14 percent,” Barriento said. “The country’s tobacco industry is estimated to be more than 100 billion sticks annually.”

Barrientos said the company currently sells its Mighty brand for P26 to P27 a pack, while Marvel brand for P25 to P26 per pack, both higher by P5 compared with last year’s retail price, reflecting the P5 increase in excise tax rate this year.

However, some retailers sell Mighty brand at P23 per pack, while Marvel brand P18.4 per pack.

Barrientos, meanwhile, noted a slight decline in number of adult-smokers in 2013 based on the report of the Department of Health (DOH).

But despite the decline in smokers’ population, Barriento said Mighty is still positioning for the forthcoming unitary excise tax rate of P26 per cigarette packet by 2017.

Barrientos said Mighty expects demand for low-premium cigarette brands will decline in 2017, while premium brands may regain their popularity in the next three-years.

“That’s why we launched our premium brands King and Chelsea in a bid to firm up our position.” the company executive said. Mighty is currently the country’s second largest cigarette firm in terms of market share, next to PMFTC Inc.

Barrientos, meanwhile, just shrugged off Marlboro-maker and Lucio Tan’s foreign partner, Philip Morris International (PMI), accusations against Mighty of tax dodging.

“Those are baseless accusations by Philip Morris,” Barrientos said “But we’re ready to face investigations by authorities. Our factory is open to any inspection by Bureau of Internal Revenue (BIR) and Bureau of Customs.”

Barrientos also explained the company managed to lower its operational cost as it does not pay royalty to foreign headquarters, like in the case of PMFTC, and has no foreign consultants or employees.

He, meanwhile, revealed that Mighty’s manufacturing cost of cigarette per packet declined last year from 2012 as the company expands its market share.

“Our cost per pack of cigarette is around P3.5 to P4 [excluding taxes], this is cheaper than in 2012 when our market share was small. We managed to reduce the cost as Mighty expands market share due to economies of scale,” Barrientos explained.

Mighty Corp on their purchase of tobacco products

Mighty Corp (MC), one of the country’s local producers of low-priced cigarettes, yesterday announced it will buy 10 million kilograms of tobacco products worth millions of pesos from farmers in Northern Luzon and elsewhere in the country.

In an official letter of intent he sent to National Tobacco Administrator Edgardo D. Zaragoza, MC Executive Vice President Oscar P. Barrientos said it is buying tobacco from farmers 100 percent more than the five million kilograms his firm bought in 2013.

“This is to assure our tobacco farmers of our willingness to help in response to the published report of the market leader in the tobacco industry to lessen production this year,” Barrientos, a retired regional trial court judge, said.

The letter of intent, in effect, debunked critics’ allegations that MC has been importing raw materials from foreign countries at low prices and therefore it is no longer buying tobacco from local farmers.

Barrientos said their critics have been resorting to a disinformation campaign using convoluted data in an effort to undermine Mighty’s tremendous increase of its market shares.

MC’s market shares surged to almost 20 percent of the low-priced cigarette brands last year from three percent the previous year, resulting to the payment P8.2 billion in excise taxes.

According to Barrientos, their market shares shot up after the government effectively implemented Republic Act 10352, otherwise known as the Sin Tax Law that leveled the playing field in the multibillion-peso tobacco industry which was controlled by Philip Morris and Fortune Tobacco. The new law that took 14 years to pass and certified as urgent by President Aquino III caused a tremendous migration of smokers from the expensive premium and sub-premium brands to low-priced cigarettes.

It also resulted to some smokers, because of economic reason, to simply quit the vice and thus validated health authorities estimate that the sin tax law would result to the decrease of the number of smokers in the country.

Before the end of 2013, total tax collection by the BIR hit an all time increase of P91.6 billion from P60.4 billion in 2012. Taxes from cigarettes represented 61.6 percent or almost two thirds of all sin tax collection for 11 months of 2013.

Mighty Corp., then a minor player with a measly three percent of the market share with only P500 million in excise tax payments before the sin tax law took effect in 2012, contributed P8.2 billion in tax payments in 2013, discrediting its critics that it had allegedly committed technical smuggling and tax evasion.

Mighty Corp gave out scholarship grants to college students

Formal schooling is often too expensive and priced well beyond the reach of the poor, including tobacco farmers. Thus, the Wong Chu King Foundation (WCKF) is offering 100 college scholarship grants to poor but deserving children of tobacco farmers in Northern Luzon.

The program is one of three components of a P10-million joint project of Mighty Corp. (MC) and the National Federation of Tobacco Farmers and Cooperatives Inc. (NAFTAC) that aims to benefit 65,000 farmers in Pangasinan, La Union, Abra, Cagayan, Isabela, Ilocos Norte and Ilocos Sur.

The WCKF is the corporate social responsibility arm of MC, which the Wong Chu King family owns. “This is our way of thanking the farmers for helping to make our company what it is today,” said retired general Edilberto Adan, MC president and chief executive officer, at the formal signing rites for the project at a hotel in Bauang, La Union on February 8.

“We are happy that Mighty Corp., through its Wong Chu King Foundation, has stood firm on its commitment to help 65,000 tobacco farmers in the Philippines,” said Mario Cabasal, NAFTAC national president, at the signing, attended by top MC executives and 200 farmer leaders.

Retired Judge Oscar Barrientos, MC executive vice president and spokesman, said the WCKF initially offered scholarships to the dependents of active MC employees but later expanded this to include dependents of retired MC employees and poor but deserving students with excellent academic records.

Other components of the project include agricultural production assistance, consisting of 16 hand tractors worth P2.5 million and 90 irrigation pumps worth P1.1 million; and institutional support for the annual search for outstanding tobacco farmers and cooperatives by the National Tobacco Administration.

The foundation has six high school and 14 college students on scholarship in various schools nationwide. Two of its college scholars graduated last year.

WCKF also donated P300,000 for textbooks and other library materials of Lyceum de Amulung in Cagayan North, TuguegaraoCity last year. In 2012, it provided textbooks, laboratory and home economics equipment to Lyceum de Amulung and teaching devices to Lyceum de Amulung’s teachers.

 

Mighty Corp, tobacco farmers sealed the deal over projects

Organized tobacco farmers in Northern Luzon signed over the weekend an agreement with a local cigarette manufacturer to jointly pursue projects designed to uplift the lives of farming families under the theme, “Sama-sama Tayong Pilipino sa Pagyabong ng Industriya ng Tabako.”

The partnership was sealed by top Mighty Corp President Edilberto P. Adan and Executive Vice President Oscar P. Barrientos with Mario Cabasal, head of the National Federation of Tobacco Farmers and Cooperatives, Inc. (NAFTAC) at a hotel in Bauang, La Union last Saturday.

A consultative meeting was held between Mighty Corp. executives and 200 tobacco farmer-leaders in Pangasinan, La Union, Abra and the Ilocos provinces in which the firm announced a pledge for a P10-million fund for three-pronged programs that will help tobacco farmers produce better quality tobacco.

The program includes the donation of support farm implements like irrigation pumps and tractors, sponsoring new 100 college scholar grants for the sons and daughters of tobacco farmers and the institutional support for the annual search for outstanding tobacco farmers and cooperatives.

“We are happy that  Mighty Corporation has stood firm on its commitments to help the 65,000 strong tobacco farmers in the Philippines with their pronouncements this year to purchase 10-million kilograms of tobacco leaves and the P10-million outreach projects for tobacco farmers,” said Cabasal after the agreement was signed by the new partners.

The meeting was highlighted by Mighty executives, through its Wong Chu King Foundation, Inc., turning over 16 units of hand tractors worth P2.5 million and 90 units of water pumps worth P1.1 million to chapter delegations from the seven tobacco-producing provinces in Northern Luzon.

“This is a big help to tobacco farmers,” said Cabasal, who expressed elation over Mighty Corporation’s commitments to initially buy at least 10 million kilograms of tobacco leaves.

The federation’s Ilocos Norte chapter got two tractors and 12 water pumps; Ilocos Sur Bantay chapter – two tractors and three water pumps; Ilocos Sur-Candon Chapter – 2 tractors and 20 water pumps; La Union Chapter – 2 tractors and 14 water pumps; Abra Chapter – 2 tractors and 11 water pumps; Pangasinan Chapter – 2 tractors and 13 water pumps; Cagayan Chapter – 2 tractors and 5 water pumps; and the Isabela Chapter – 2 tractors and 5 water pumps

Mighty Corp, charitable arm donates 4 million to Yolanda victims

The Wong Chu King Foundation (WCKF), a philanthropic non-government organization providing assistance to poor and underprivileged sectors, has donated more than P4-million benefitting directly and indirectly hundreds of victims of super-typhoon Yolanda in Leyte, Cebu, Iloilo and Capiz.

Camille Arsenal, WCKF coordinator, said the foundation’s board of directors led by its chairman, Nelia Wong Chu King, approved the release of the funds to the victims, including 78 employees of Filipino cigarette manufacturer Mighty Corp (MC) and their dependents whose homes were either totally or partially destroyed by the typhoon.

“WCKF did not think twice after learning of the extent of the disaster. The victims were given enough funds to enable them to pick up the pieces and recover from the disaster,” Arsenal said.

“We treat our employees like family,” explains Mrs. Wong Chu King, whose foundation is MC’s corporate social responsibility arm.

Yolanda, the most powerful tropical cyclone to hit the Philippines last year, slammed the country on November 8 and barrelled through most of the Visayas, leaving a trail of devastation in its wake.

The latest from the National Disaster Risk Reduction and Management Council lists at least 5,209 killed, 23,404 injured and 1,611 missing, but government updating of  figures on the disaster remains unfinished. Initial estimates placed the death count at 10,000.

Created in 1990, WCKF aims to perpetuate the memory of Wong Chu King, the family patriarch, a philanthropist who had provided assistance to the poor and underprivileged in his lifetime.

The foundation also aims to encourage and promote education through scholarship programs and raise funds for charitable, cultural and educational purposes.