EXECUTIVE INTERVIEW EXECUTIVE INTERVIEW

The hardware
connection
An innovative and forward-thinking approach has
helped family-run business Co Ban Kiat Hardware to
dominate the Filipino marketplace.
IMAGES JAMES ONA

A
fter travelling to America in the 70s and seeing firsthand just how
successful the huge hardware retailers were, Johnny Cobankiat had
an idea. So when he got a certain fateful call, he jumped at the
chance to bring a franchise of ACE Hardware USA, in partnership
with the SM Group of Henry Sy and family, to the Philippines, using
his family’s own wholesale hardware business as one of its suppliers.

This was just one of the many things that Johnny has been instrumental in
achieving over his 25 years as CEO of Co Ban Kiat Hardware. Johnny sat down
with The CEO Magazine to talk about the journey and his plans for the
company’s future.

The CEO Magazine: You are the fourth-generation family member

to run Co Ban Kiat Hardware. How does the relationship between Co
Ban Kiat Hardware and ACE Hardware work? Name Johnny Cobankiat
Company Co Ban Kiat
The rise and rise of
RICHARD
BRANSON

PHILEX MINING’S
EULALIO AUSTIN
ST LUKE'S
MEDICAL CENTER’S

As featured in
Johnny: Co Ban Kiat Hardware in itself is a wholesale company. We sell to Hardware
Position CEO
EDGARDO CORTEZ
CHRYSLER’S 300 SRT8: NAKASHIN DAVAO
American muscle at its best INTERNATIONAL’S

all the hardware companies across the Philippines. We were originally

KEISUKE NAKAO

The CEO Magazine

ASIAN MARINE
Escape to Queensland, TRANSPORT
CORPORATION’S
and get back to nature PAUL RODRIGUEZ

HQ Manila, the Philippines

SUPER 8 RETAIL
SYSTEM’S
ALVIN LIM
Off the Grid
in outback

called the Hardware Workshop, which was purely a retail store, and after
Australia

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33
EXECUTIVE INTERVIEW
“You can never get rid of competition; you just have to work
harder and let them chase you.” - Johnny Cobankiat
a while I think it caught the eye of ACE
Hardware in the US. At that time,
the corporation was looking to
expand into Asia. The management team
in the States got in touch with me, and
the rest is history. We started ACE
Hardware in the Philippines, using it as a
stepping stone to then introduce it to
Indonesia, Malaysia, and whichever
other Asian countries they were
looking to get into. They wanted to
give me the China market, too, but I
refused because it is too difficult, and I
was content to just be in the Philippines.
34
During my stay in the US, when we made
the deal, the National Hardware Show
was on and I had a lot of interviews. One
of the journalists asked me: “Why would
you put ACE Hardware in the Philippines
when it has never been there before?” I
answered: “How do you expect people to
go and see a movie when there is no
building to see the movie in?” So I built
the house first and everything started
happening from there. Basically, Co Ban
Kiat is the wholesale and hardware
supply company for the Philippines, and
ACE Hardware is our retail partner.
Together we have formed a marketplace
that allows us to tackle the retail
consumer’s needs.
How many ACE Hardware outlets
do you operate now?
We have more than 120 stores and are
committed to building another 50 stores
in the near future.
Do you own all of the Co Ban Kiat
outlets or do you have a
franchising model?
ACE is the partnership between
myself and SM Group; the largest
conglomerate in the Philippines owned
by Henry Sy and family. All the stores are
company owned.
You have been CEO of Co Ban Kiat
for more than two decades, and
during this time it has remained
a family-owned and -operated
business. Have your family
members always been supportive?
There have been some rough times
when some of my uncles did not
agree with me, so I bought them out.
Now that I am independent and entirely
own Co Ban Kiat, I have nothing to
discuss with anybody except for my
son and my father—that makes things
a lot easier.
That shows extraordinary strength
of character. What are your plans
for the future of Co Ban Kiat,
besides opening more stores?
ACE Hardware is on the retail consumer
end, and Co Ban Kiat on the wholesale
end. What I intend to do is put in a
“RIDGID has been doing business with Johnny and
his team for decades. We’ve developed a deep trust.
Our strong partnership ensures that we are able to
provide the highest quality products and service to
customers throughout the Philippines.” - Fred Pond,
President, RIDGID
EXECUTIVE INTERVIEW
digital platform to make it easier for our
industrial clients to purchase from us.
We don’t have a one-stop buying shop for
them so I am planning to put in this
platform where all of the suppliers can
come to me and I will be the one to
introduce them to the market. The
Philippines is an archipelago with over
7,000 islands so the logistics are
terrible. Just look at a map and you’ll
see what I mean. How on earth do you
deliver efficiently and effectively to all
of the Philippines? That is the
logistical and marketing nightmare
we are faced with. We are building
a digital platform this year to
address those logistical challenges
and I have allocated significant
resources for my son to work on
that technology.
Do you have a logistics company
to handle the distribution of
your products over such a
large area?
I don’t intend to be a logistics company
because there are a lot of those already
out there. But if push comes to shove,
maybe I will buy a logistics company
because it’s easier.
36
You have some great relationships
with your suppliers—I gather
some have been doing business
with you for many decades?
That’s true—they have all been with me
for a long, long time, which I think
speaks for itself. Some have worked with
us for two, three, four decades.
Do you have a lot of competition
in both the wholesale business
with Co Ban Kiat and the retail
side with ACE Hardware?
Competition will always be there, we just
have to do the best we can. You can
never get rid of competition; you
just have to work harder and let them
chase you.
How do you attract and retain
your talented staff ?
Would you believe, we are competing
with countries such as Saudi Arabia
and Kuwait? They are poaching our
staff but my philosophy is to keep up
with the training of people. We have
an abundant wealth of talent in the
Philippines; we just have to train them
“We are building a digital
platform this year to address
those logistical challenges
and I have allocated
significant resources for
my son to work on that
technology.” - Johnny Cobankiat
appropriately. If they are hired by
a company abroad I am happy for
them because they will still contribute
to the economy of the Philippines.
It’s just about training, training, and
more training.
That is a generous philosophy.
Very true. It can be extremely hard
initially but once you get over the
hurdles it’s easy. Besides, we need to
train more staff for our future
expansion anyway—you cannot grow
a store without good people. People
are your strength, and enable you to
build more stores.
Is that what sets the company
apart from its competition?
I hope so, because every day it is a
changing world. You have to adapt to
what’s happening around you.
How do you attract new products,
both imported from overseas
and locally produced?
It’s easy when we are dealing with
multinational companies like Black
and Decker, Stanley, and Ridgid.
There are no problems that we have
to solve because they are the ones
who have to be innovative and come
up with a new product every year.
We just ride with them and implement
the products and marketing that
they want.
EXECUTIVE INTERVIEW
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Are you still involved with the
Philippine Chinese Chamber
of Commerce?
Yes, I am very much involved. You have
to be in tune with the market, and as
a member I am able to listen a lot to
what is going to happen in the future.
They are the pulse of my business and
help me to channel the right energy
into my organisation.
You have mentioned your son a STORAGE POWER TOOLS
couple of times—he is obviously
an important part of the family
and will be the fifth generation to
lead Co Ban Kiat. Are you looking
forward to him taking on the
business?
Of course; I cannot work forever and nor
do I intend to. I need some time for
myself too—time to relax. There comes a
point when it’s time for my children to
make money for me; not me always
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making money for them! I hope my son
can carry the mantle and move the
business forward to an even higher
degree of success than I have.
What is your overarching
business philosophy?
Nothing stays the same. Things change
and you have to be very prepared to
accept the changes and to move on.
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