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"We supported the rebel's side early on. Our trucks were among those that barricaded EDSA. We could see clearly at that time that change was needed."

Unknown to many, global logistics provider Royal Cargo Combined Logistics, Inc. is a Filipino company.

It started as a joint venture among German-FrenchFilipino businessmen and is now majority-owned by the family of Michael Raeuber, a German businessman who is married to a Filipina.

“We are a Filipino company,“ declares Raeuber proudly.

Raeuber has steered Royal Cargo to become the Philippines' first multinational freight forwarding company and now one of the leading names in the field of logistics.

ROYAL CARGO Raeuber started his career in freight forwarding with Hermann Ludwig GmBH, the pioneer logistics and forwarding company in Germany.

He first served as the station manager of Hermann Ludwig when it put up its representative office in the Philippines in 1975.

Three years later, Hermann Ludwig became Royal Cargo Corporation and Raeuber was named managing director, a position he held for the next nine years until he became the president of the company.

During that period, Raueber steered Royal Cargo towards diversification and acquisitions, which led to the establishment of a number of companies that he also headed, including Royal Cargo Combined Logistics, Inc., Royal Cargo Agencies, Inc., Royal Heavylift, Inc., Marzell, Inc., Royal Cargo Lines, Inc. and Royal Cargo Corporation (Vietnam) as well as Plastic & Tools, Inc., Regent Ace Company Limited, Stein Art, Inc., Combined Supply & Logistics, Inc. and Kawayan Hills, Inc.

Along with the steady growth of the company came its new name: Royal Cargo Combined Logistics, Inc. He ventured into projects and heavy lift operations, transport logistics, contract logistics, express customs clearance, and ISO tank and flexitank operations.

Through his leadership, the company has now established itself as a leader in these industries in the country. Now, the Manila-headquartered company has offices in at least ten countries including Germany, United Kingdom, Singapore, Hong Kong, Vietnam, Cambodia, Palau and Guam.

Iris Logistics Inc. is its newest addition. It provides domestic forwarding and distribution services in the country. Iris enables the group to offer cost effective and efficient multi-modal deliveries throughout the country giving domestic firms a good competition.

So far, Royal Cargo is the third biggest international freight forwarder with international footprint. It employs 1,400 people of which 1,000 are in the Philippines.

Its experienced organization has provided global logistics services, spreading its wings geographically and providing specialized logistics services in its areas of excellence such as international freight forwarding, contract logistics, warehousing/ cold storage and heavylift transports.

Raeuber nurtured Royal Cargo to what it is today. Now, he and his family own over 80 percent of Royal Cargo.

MARTIAL LAW Raeuber started early in life. He met his Filipina wife here in the early 70's and they got married in 1973 when he was only 19 years old.

“In the next few days is our 39th wedding anniversary,“ says Raeuber.

The young couple moved to Germany but Raeuber was assigned back in Asia and eventually settled here.

He remembered it was still Martial Years when he came to the Philippines.

Doing business then was difficult.

“We started from zero, so there was no way but up,“ says Raeuber.

According to Reauber, the sector that he belongs did not change, “there was always competition, problems to solve and services to render.“

These things didn't change, says Raeuber, but the way of doing business has. It has now become more sophisticated.

Communication in this kind of business is a very important tool and Raeuber remembers using the cable and telex to communicate to the other parts of the world.

“There was no internet to speak of,“ says Raeuber, who does not want to describe their business then as primitive but simple.

“We started with very simple concepts,“ says Raeuber as most of their business transactions were inbound cargoes.

That suited their earlier business as they were short with infrastructure support like transportation equipment.

When the EDSA 1 happened, Raeuber was there hoping change was coming.

“We supported the rebel's side early on. Our trucks were among those that barricaded EDSA. We could see clearly at that time that change was needed,“ says Raeuber.

When asked if the change that they envisioned did happen, Raeuber says, “It did change, but not always in the ideals that we wanted, there is always room for improvement.“

He expressed confidence that real change could happen in this Aquino administration.

“We can see real change now because of the drive of the new administration to move towards a level playing field,“ says Raeuber. President Aquino's attendance in the past Integrity Summit and the progress among government agencies are good indications that real change is coming.

“That is why the Philippines is now a good news,“ says Raeuber.

The European Chamber of Commerce of the Philippines (ECCP), which he heads, continues to play its role on the constructive and supportive side.

“There are still things that need to be handled better and need to be changed,“ says Reauber. He cited, for instance, the case of the sin tax bill stressing the need to get it right the first time.

REWARDS There is no stopping in its growth path where Raeuber sees his company maintaining its value, its people and its customer-centric operations in the next five years.

But, he also stressed that the rewards came later. It was hard work for his team and people before.

“We should be able to further enhance our role as a serious global logistics service provider,“ says Raeuber.

In fact, going public or conducting an initial public offering is not a remote possibility to be able for the company to grow faster and spread its wings globally while sharing opportunities locally.

“We are as resilient as the Filipinos we employ we foster team spirit and take pride in our work while being responsive and responsible to all stakeholders,“ says Raeuber.

While the big logistics companies operating in the country are foreignowned, Royal Cargo is the only Filipinobased global logistics company.

“We amalgamate western and Asian values in doing our work,“ says Raeuber.

The logistics industry, too, has been fortunate, blessed with robust growth amid challenges and Royal Cargo has been part of such exciting growth.

Although the Philippines lags behind other countries in the region, Raeuber says it is catching up.

“It is pursuing opportunities for growth,“ says Raeuber.

In fact, Raeuber says its business has completely reversed from what used to be an all inbound cargo business to majority domestic business transactions.

In fact, the company has been growing over 30 percent in the past three years citing the strong growth of its newly formed Iris for domestic freight forwarding.

With its experience and scale, Royal Cargo is in a position to compete with foreign firms. In the Philippines, the size of Royal Cargo is comparable with that of DHL's.

“We are proud, we are a Philippine company and we have achieved this scale to compete with the world's giants,“ says Raeuber.

Next year, the company is targetting Malaysia, Thailand, and Indonesia for it's expansion.

The company has been reinvesting in the country. Two years ago, the company invested R250 million and last year with R100 million. The company is allocating R200 million in capital expenditure this year.

“I am careful next year because our base growth is already very high, that it is not always possible to sustain such huge growths,“ adds Raeuber.

For 2013, Raeuber says they plan a capex of R100 million noting they just have to maximize the use of their equipment and facilities. It has a paid up capital and retained earnings of R500 million.

In terms of growth in sales, the company reported R1.5 billion in sales in 2010 and R2 billion in 2011 and is expected to hit R3 billion this year. For 2013, the company expects sales to jump to R3.5 billion.

“I see the future quite bright because this is the right time and place. It is not only China but the entire Asia including the Philippines,“ says Raeuber.

CHALLENGES “Business is good despite the fact that there are challenges and strong competition from foreign firms,“ says Raeuber.

When pressed on what are these challenges, Raeuber says these include the “struggle against redtape, and the struggle towards integrity, which we support wholeheartedly.“

“We have to live and meet with these challenges,“ says Raeuber reciting the Serenity Prayer, “...to accept the things I cannot change, The courage to change the things I can, And the wisdom to know the difference. ... “ For the past more than 30 years that he did business in the country, Raeuber has to adjust to the realities.

The ECCP is the first business group to call for the Integrity Pledge among businesses in the country.

SAILING The way he does business in the country has been a combination of foreign and local experience. His being married to a Filipina Leny Umale with whom he has three children--Andrew Kurt Raeuber, Christian Kurt Raeuber and Sebastian Kurt Raeuber -is a big help in making him understand the Filipino values and culture.

“I love the Filipino culture, the family values of sharing and supporting each other, and the ability to be happy even in difficulties,“ says Raeuber.

As a businessman, he has not stopped learning new things.

“I am always be ready to learn something new -add values for others to be successful, and accept to learn from your own mistakes,“ says Raeuber.

Because of the size of the company, Raeuber has to delegate some of these tasks.

“I have to empower people and make them responsible for what they are doing. With proper encouragement, Filipinos can be very creative and can be motivated towards a common goal,“ says Raeuber.

This German businessman emphasizes the discipline with clear rules and consistent implementation of rules as keys to a successful organization.

The resiliency of the Filipinos and the power to face challenges and difficulties with a smile impressed him the most.

If there is one Filipino value that he wants to change it is the “tendency to accept abuse because change entails delays.“

This German, who loves chicken/ pork adobo and beef tapa, says he would mostly retire in the Philippines someday, combined with travels and some stays in the “Black Forest“ in Germany.

To give back to the society, Royal Cargo has implemented some corporate social responsibility programs, including the formation of an Emergency Response Team and the dedication of the company's heavy lift equipment and a fire truck to assist local government units during emergencies.

Raeuber also established “The President's Fund“ for employees stricken with health problem. The company is also into the sponsorship of housing projects for Gawad Kalinga.

To unwind, Raeuber is into the notso ordinary sport. He loves sailing and ultra light flying. With his sail boat, he competes in three regattas a year in Puerto Galera and Boracay.

On weekends, he sails to Batangas and Puerto Galera and back to Manila Bay. His favorite tourist spots are Boracay, Puerto Galera and Paoay Lake in Ilocos.

“Sailing is what I enjoy best,“ says Raeuber. He used to be in ultra light flying.

“But flying seduces you to risks and my family prevented me so I am now into sailing,“ says Raeuber.

For Raeuber, what makes it fun to do business in the Philippines is, “To meet challenges and feel the satisfaction of achievement overcoming them ­ to enjoy teamwork and happiness while creating structures.“

Raeuber had steered the company during the most challenging times in the country's history, now that the Philippines is moving in a direction of growth his role is not going to get easy, only becoming more exciting.

 

Source: Manila Bulletin; Business Bulletin; 24 October 2012