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Interview with Peter Hager


Good morning Peter, thanks for having us here at your office for the interview. Can you please introduce yourself and the company?


Well the company is Raco Trading, and we are an import-export commodities trading company and we are basically involved in pulp paper and packaging, coconut oil and coconut related products. We have done many different things in the past including selling airline engines, we have traded steel, we have been involved in copper concentrates, etc. We are a company of agencies, we represent for principals and we manage their business here in the Philippines. For example, in pulp paper, we represent paper suppliers from around the world and we sell their products here in the Philippines. It is also the case of FMNT, la Fabrica Nacional de Moneda y Timbre, we are their agents here in the Philippines and we manage their business here for them, including all of their sales. With them, we have worked for twenty-five plus years selling things like stamp paper and paper for the peso bills.


So in Raco, I would say, we are a trading company representing foreign principals managing their business interest here in the Philippines.


What made you or the company move to the Philippines? Raco Trading is a Filipino company, it was started by my boss and the owner of the company Ramon Arnaiz, who is also a Filipino national. So the company has always been here, it was established in the late 70s or early 80s. What made me come to the Philippines? Well my father is English and my mother is Filipina, so I was born and raise here. I went to college in the US after I finished high school. I also worked in the US for 2 years, but then eventually came back here and started working in Raco in 1993. How has the country changed in all these years? As I said before, I came back to the Philippines in 1993 but I grew up here. Obviously, the country has become more congested, more buildings, there are more malls, there are more western influences. You see more western stores, more shopping malls, more department stores, more roads, and especially more cars. I think everyone can agree on the cars' parts. How has your professional career or your company's career developed in all these years? Raco is involved in many different things. When I first started in Raco we were very active in metals and minerals, we were trading medals representing different trading companies in New York, exporting copper concentrates and precious metals, we were selling malts for making beer, etc. Over the years we have traded rubber, we have sold aircraft engines, we have been involved in many different things. What for me is interesting is that we try to do so many things it is not we are always doing the same thing, every day, for 25 years. We try to develop new products, where people come to us and say "we want to sell this in the Philippines and we want you to sell it for us". Then we have to study the product, we have to learn about the different industries that we can sell it to. That for me is what makes it interesting because there is always something different, or at least there is some change. For the company, we have been consistent with pulp and paper, ever since I joined the company, and we have been trading coconut oil and coconut related products. That has been very consistent. Outside of that, we have also developed new businesses and done different things, so, there has been a lot of growth in other areas. Do you think doing business now is easier or more complicated than before? I think it's probably more complicated, at least for us, now there are more sellers, there is always more competition. Always your margins are going down, you're always having to compete against more people. So, yeah, in general, it has gotten more complicated. Because we are like agents here in the Philippines, so of course we want to do well. But in the end, your success is also your end. The more successful you are, then the company says "oh we're paying this company so much, why don't we open our own office in the Philippines?". Many companies that we were representing in the past, they did open their own office here. On the other side, the Philippines is a very price-sensitive market and many principals also don't want to come here because they look at the costs here for things like paper for packaging and many of the suppliers when they hear the prices here they think the price is so low, why would they want to ship to the Philippines. So, it's always hard to find good suppliers who are willing to sell to the Philippines and to commit to selling here. How has the Filipino consumer changed during all the years that passed by? We don't deal with the Filipino consumer directly, because we deal with packaging companies and we deal with manufacturers. I guess, just by living here, I think that people have gotten more sophisticated and they are willing to spend more on luxury goods. What those luxury goods are depending on the people. Also, they like western products more, and they are willing to spend more. At the same time, it is still a very cost-conscious market. In general, I think Filipinos are expanding their values and appreciating imported products and that is why we are a consumption-driven market. What has been your most difficult challenge? Every year is a challenge. I was just talking to someone this morning, from Spain, and I was telling them "Every year we think it's difficult and then the next year comes and it's even more difficult" and we look back and see the previous year wasn't even that bad. The challenges are because of the market and the fact that there is more competition. For example, previous companies who couldn't sell here or they had a limited allocation of paper, they have now additional capacity so they can sell more here. Obviously, your competitors are selling more and the market is growing but not as fast as the number of suppliers. Here at Raco, every few years something comes along that is a big change for us, a whole new product someone wants us to sell. If someone suddenly wants us to sell teacups, it's a whole new market for us to try and develop. There are years, where we have products that are completely new and we are struggling to try and learn the product, struggling to try and learn the market, etc. And there are other years, where an existing business that we have done for many years they are changing because our principals are also changing, costumers are changing the requirements, etc.


To finish, could you please tell us an anecdote that you will never forget from the Philippines? II was in Davao in January of 2001 with a guest from New Zealand meeting clients when the Philippine Senate voted not to open the second envelop in the impeachment trial of then-President Joseph Estrada. The move almost immediately led to street protests culminating in the "Second Edsa Revolution". The head office in New Zealand of my guest saw the news and thought the whole country was in a state of revolution. They called my guest frantically telling him to get out of the country immediately in fear of his life... he looked out the hotel window at the calm Davao day and tried to explain that everything was ok and he was running late for a meeting!

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