Philippine Business Magazine: Volume 9 No. 1 - CEO Interviews
The Doctor is Out; The Businessman is In
The entrepreneurial spirit in Dr. Rolando Hortaleza turned a homegrown business into a global name in personal care products
By Maureen Macaraig-Martinez

Dr. Rolando Hortaleza and Splash Corporation truly made it in the Philippines. Seventeen years after he and his wife, Dr. Rosalinda Ang-Hortaleza, went into the personal care industry – in the beginning a foreign land to them — their company has established a globally-competitive product line that is proudly, and purely Philippine made.

Initially responding to the local market demand for hair spray, cuticle remover, acetone, and cold wave lotions, Dr. Hortaleza has transformed a household business into a big corporation investing heavily in pioneering and innovative personal care products like whitening lotion and exfoliant products. Philippine Business found out more about the man and his company.

How does it feel to have come this far in the personal care industry, competing in a multinational-dominated industry?
The entire group is really overwhelmed, but our feet still stand firmly on the ground. We’re happy with our accomplishments, though we are still in the initial stages of our campaign to go global. It feels very good to compete against the best in the world like Unilever, Procter and Gamble, Johnson and Johnson. There is this inner drive for us to do more and to excel more.

We are also very happy that a lot of Filipino companies are competing in an industry being dominated now by larger organizations. Filipino manufacturers are well-known in handicrafts and in the food industry. In the information industry, our role is more of the labor component, not producing the finished products. But in the personal care industry, we’re producing finished products and we’re exporting these. This is something that we can be proud of.

How were you able to penetrate the market?
Actually, it’s a textbook application of niche marketing. In niche marketing, you don’t have to go against multinationals head-on. For example, we are coming up with a lot of products that are not available in the market. Most multinational companies are into detergents, shampoo, conditioner. We opt to go into another route by going into more specialized categories like whitening products, exfoliant products. The exfoliant products are not in the product line of big global players like Procter & Gamble and Unilever. So it’s very easy and we don’t need much advertising. Multinationals wouldn’t notice you if you go through this route. By the time they notice you, you’re already big.

What were the humble beginnings of Splash Corporation?
This is a business venture with my wife. We are both doctors by education, but we never practiced medicine because during that time, it was very difficult to practice medicine. I was on my third year of residency training, specializing in ophthalmology, but I decided to quit on my third year. I already had two kids then and realized it will be very difficult to provide a good education for them. So I opted to divert and went into business.

My family then was retailing cosmetic products so I got this idea to introduce some products to them. With P12,000 initial capitalization, I started the business with my wife and one employee, doing the crudest method of manufacturing and buying second-hand bottles from junk shops. That’s how we started.

What made you decide to go global?
We’re a focused organization. As much as possible, we would like to penetrate first the local market. But we’ve encountered a lot of opportunities through word-of-mouth advertising. We’re very thankful to the OCWs (overseas contract workers) because when they travel abroad, they bring our products and use them. Through word-of-mouth advertising some locals abroad now look for the products. So distributors and dealers in those countries are now investing so they could market the products there.

We started way back in 1992, but with no formal structure. We just shipped products if there was a requirement from the small dealers and distributors. During this time, we were focusing our attention in the local market because we were encountering stiff competition all over, multinationals and local companies.

But due to the increasing demand outside the country, we went heavy in 1995. We started putting the structures. We made some representations, made some intervention in terms of marketing efforts and marketing plans. We had many joint ventures like, for example, in Indonesia and China.

At present, we are exporting to Middle East countries, Indonesia, Malaysia, China, and we might distribute our products in Thailand, pending the registration and that’s due for approval within the year.

You just inaugurated your manufacturing complex in Valenzuela. What are its features?
It’s about three hectares that cost us about P650 million, including the machinery and the buildings. It covers the entire plant operation, reproduction, quality control, production planning, and research and development. This will be our production hub. We will remain here in the Philippines and it will cover the requirements of our distributors in other countries.

Our company has seven core values and one of our values is belief in the Filipino capability. We lived by this value when we were constructing the plant. Our plant was crafted, designed, and constructed with an all-Filipino team managing the entire construction.

What qualities of Splash made it succeed?
We are a value-driven organization. We have values that we embrace and uphold. We internalize these because we truly believe that through these values we can thrive and attain our vision.

Vision is very important because the employees crave for a simple yet compelling picture of where the company is going. So you have to provide a very strong, powerful vision. But there should be execution towards attaining the vision. Also, before employees can believe in what you are saying, there should be trust between you and them. If there is trust, it’s very easy for them to believe and work towards the company’s vision.

What business trends do you see in the future?
People will look for therapeutic cosmetics. It’s a combination of pharmaceutical and cosmetic products. They don’t want regular moisturizing crème, like for example, facial cleanser for oily or dry skin. People are trying to look for more value in the products they buy, therapeutic value like the ability to treat acne, pimples or to remove wrinkles. Filipinos in particular are impatient – they don’t want to wait for four to five weeks to see the results.

We don’t create customer wants. Because customer wants are tangible wants. We are looking for latent needs that are not yet available. We are looking for those products, those possibilities, and that’s very exciting. For example, if we can produce a cosmetic product that can remove eyebags, it’s not currently present in the market. That’s exciting, I think it would sell.

Who is your role model?
One person I admire is Konosuke Matsushita, founder of Panasonic. Matsushita is the traditional entrepreneur who was very successful, very pragmatic, frugal. He had gone through a lot of hardships and yet he was able to achieve a lot during his time. He’s very successful that at one point, the consolidated sales of Honda and Sony couldn’t match the performance of Panasonic.

How can you inspire the Filipino entrepreneur of today?
One lesson is that even if you are in a disadvantaged position, you can excel as long as you are dedicated and focused on what you are doing. I had a poor economic background and didn’t have any track record when I started the business, but with dedication, focus, and the right team, I was able to do good.

I believe that the Filipinos can really excel as long as we get our acts together. The question is about leadership. We should place good leaders in all sectors, all levels of our society. While people think that business has a big role in society because we tend to produce concrete results, the role of government should be given importance, too.