In 1998, only a few years after Dominic Sytin and his brothers first founded their business trading in truck and car parts, they faced strong headwinds. The Asian financial crisis had tightened its grip around many industries in the Philippines, forcing the Sytin brothers to eventually liquidate their company’s entire inventory to pay their staff and outstanding business expenses.
With sheer perseverance and only a handful of trucks and machines in their lot, they conducted their first auction in the Philippines on 4 March 1999. Following the success of their auction, the idea was born to transform the business into a full-time auction operation. By 2003, United Auctioneers Inc. (UAI) had grown to become the Philippines’ leading auction company and began hosting auctions in Subic Bay Freeport Zone.
Almost 18 years later, UAI has sold more than 110,000 units of various industrial, transport and construction machines to more than 40,000 foreign and local buyers. In the next 10 years, the company has set its sights on establishing more auction operations across Asia–Pacific. As long-time UAI Chairman and President Dominic shares with The CEO Magazine’s readers how UAI has catapulted the popularity and influence of
the ‘auction way of life’ into Philippine society.
The CEO Magazine: Can you please share with us a summary of your professional history up until when you founded what would become United Auctioneers Inc.?
Dominic: I graduated from the University of the Philippines with a double degree in business administration and accountancy. In my last year in college, I was recruited by Procter & Gamble Philippines (P&G) to join them after graduation for a fast-tracked career in brand management. After 18 months at P&G as an assistant brand manager, I decided that I was not cut out for a desk job, and my drive for entrepreneurship prompted me to start a trading company for truck and car parts. A few years later, we started importing and selling used trucks and construction equipment.
My father passed away at an early age, so being the eldest in the family, I had to be both a father and a brother at the age of 25. I founded UAI, and since then we have expanded into other areas. Each one of my brothers is now at the helm of the companies that make up the family business.
What were some of the key challenges you faced in the early days of operations?
In 1998, at the height of the ASEAN currency crisis, the Philippine economy was at a standstill. Construction projects were left abandoned, and bank lending rates were at an all-time high. Our original company felt the slump, and with about 800 units of unmoving inventory of trucks and equipment, I had to ask our company employees to temporarily take pay cuts to avoid downsizing until the company was back on its feet.
Truthfully, I ran out of options, and so daringly decided to liquidate our entire inventory by auction to raise funds quickly to keep the company afloat. And the rest, as they say, is history. Within every adversity lies a great opportunity; one just has to recognise and seize it! The first 3 auctions from our warehouse in Manila were challenging. We were selling our entire inventory at a substantial loss to raise cash. But then something went right and our “everything must go” liquidation auctions were turning out to be the solution we needed to get back on our feet again, so to speak.
Buyers were coming and bidding and our inventory started moving. By our third auction, trucks and equipment traders in the Philippines who were faced with the same problems had started approaching me to auction off their non-moving inventory. That’s when I started accepting trucks and equipment for sale on consignment. Consignors would send their equipment to us and we would charge a commission for selling them in our auctions.
Educating the Filipino buyers about buying, selling and trading trucks and machines through auction also proved to be a tough but necessary measure. Before auctions became popular in the Philippines, Filipinos were used to buying
them from importers and traders.
We had to pour massive funds into advertising and teaching potential buyers how to register, participate and buy from auctions. As fate would have it, soon buyers from as far as southern Philippine islands started to join our Manila auction in droves. Yard space and the transport of trucks and machines became a problem and hampered business operations, but by February 2001 UAI held its first three-day auction in Subic Bay Freeport Zone.
In the early 2000s, you were hosting 3 auctions a year. How often do you hold them today, and how does the frequency of auctions affect day-to-day operations?
We used to hold three-day auctions 3 times a year. We are now hosting four-day auctions 6 times a year. That’s a 270% increase in sales volume annually from
a decade ago. In 2017, we’re broadening horizons and will be launching our auction in Davao City, the booming hometown of the Philippine President, His Excellency Rodrigo Duterte. We are targeting to host 10 auctions in 2017.
I ran out of options, and so daringly decided to liquidate our entire inventory
by auction to raise funds quickly to keep the company afloat.
With the exponential growth in our business targets every year, UAI has to run like a well-oiled machine all the time. Our focus on the 4 key factors to a successful business operation — Process, System, People and Technology — have enabled UAI to operate at the most efficient, optimal capacity, ensuring timely hosting of bigger and better auctions every year.
Our adherence to ISO’s quality standards assures the buying public that every auction we deliver is dedicated to the standards of our quality policy and our company mantra to contribute significantly for the benefit of our communities.
What is your company’s winning formula when it comes to hosting auctions?
Telephone and on-site inquiries on how to bid and buy at auction are handled by highly trained customer care representatives who meticulously explain the whole auction process
to new buyers — from registration, actual bidding and settlement of accounts, to the eventual removal of won bids. Real-time interactive online help desks on our website quickly respond to anyone who has queries about our auction process, the line-up of items we have on sale, the auction calendar, and anything about UAI.
We require a potential seller or consignor at our auctions to submit a list of their trucks, machines and equipment for sale. Our Auction Solutions and Development Department then very carefully scrutinise the model, condition, quality and legal ownership of each item. Consignment items that pass the vetting process are given dates and deadlines for delivery to our auction facility for final line-up before the auction schedule.
We also set aside three days prior to the sale date allowing potential buyers to inspect, select and test trucks, machines and equipment they need for their businesses. After shortlisting the items and lots they want to bid on, buyers can then proceed to the office to register as a bidder.
In exchange for a refundable registration fee, participants are issued bid books or a catalogue containing unique bidder numbers. In the bid book, buyers will find a complete listing of all the items up for sale, in sequence. Every auction, we contract foreign professional auctioneers to carry out the bidding process.
They call out the starting bids for each lot, registered buyers raise their bid books to signify intent to purchase on lots that are paraded for sale, and the highest bidder wins the lot on sale. Bidders are given 7 banking days to complete their payment and remove all the lots they have purchased from UAI’s premises. I say with pride that now that the auction style of conducting our business has been deeply ingrained in our targeted buying public, everyone participates with ease and elevated levels of enthusiasm.
You’re having your first off-site auction this year in Davao City — your third site since launching your business. How did you go about selecting these sites?
When we were getting started, another key challenge for us was around logistics. The long distance between the port of Manila and our auction yard, which is in the north of Metro Manila, means traffic restrictions, port congestion and bureaucratic paperwork made it even harder to mount bigger auctions as our buyer base began to increase.
We knew we had to get out of the gridlock of Metro Manila. When Subic Bay just opened its doors to welcome investors to locate their businesses inside the economic Freeport Zone, it presented a viable proposition for UAI because of Subic’s sprawling industrial estate
and proximity to its own port facilities. Our transfer to Subic Bay Freeport Zone enhanced our logistics and supply management capabilities. Here we were able to plan our auctions efficiently and more effectively.
UAI’s new Davao site is an expansion area for the company. From 2011 to 2017, the Philippine government’s infrastructure budget has increased 5 times nominally
(from 175 billion to 860 billion) and is up from 1.8% of GDP in 2011 to 5.4% of GDP.
As a beneficiary of the government’s infrastructure spending, UAI is a leading and direct indicator of the country’s economic health, because we supply Filipino buyers from
all walks of life almost everything they need for their businesses.
UAI is a leading and direct indicator of the country’s economic health because
we supply Filipino buyers from all walks of life almost everything they need for their businesses.
Davao City, where our incumbent President Duterte hails from, and the entire Mindanao region, will be the sweet spot for business owners in the next 5 years as the present administration is poised to allocate budget to fund massive infrastructure projects in the region. Renewed foreign and local investor interest presents an excellent business opportunity for United Auctioneers to go down to southern Philippines and be a key contributor to business growth in that region.
You’ve strengthened your position in the Philippine market, but you’re looking to expand to whole new regions, too. What new areas are you considering, and why?
After Davao, we are also looking to expand into other key cities and provinces such as Cebu, Bacolod and General Santos City. Another area of our business we hope to develop is to spawn core competent management teams whom we will carefully identify and rigorously
train to run the satellite auctions we are rolling out in the provinces.
In keeping with our quality policy, these to-be-developed management teams should be able to duplicate the standards we have set in our flagship office in Subic and run the auctions in key metro provinces. This runs parallel to our commitment to benefit our communities by providing topnotch personnel who don’t just understand our business but, more importantly, are also passionate to contribute as much as possible as productive and able citizens.
I am currently in discussions with some foreign machine traders and studying the possibility and viability of expanding our auctions to other emerging countries, like Vietnam.
What value can be found in maintaining strong working dynamics among all stakeholders, whether it be key suppliers and partners, or your own staff in house?
Almost all our partners, consignors and suppliers have been with us since the inception of UAI, and I attribute the longstanding success of our work dynamics to mutual respect and professionalism in all our dealings. During our 2016 Christmas party, we were delighted to give recognition to 10 loyalty awardees who have been with us for 2 decades, and counting.
The attrition rate of employees leaving UAI is very low, majorly due to our dictum to respect every individual by taking care of our employees with work–life balance. I strongly believe that a healthy and happy family life will reflect positively in the way
they work. So far, I am very pleased with the productivity and performance of each and every one of my work family.
I strongly believe that our company is pillared by individuals who not only work for a living
but who are passionate to see the company climb to the top because
of their hard work and dedication. Much of our success comes because of spirited teamwork. We also encourage design thinking in our company. Employees are emboldened to ideate ways and measures on how we can further enhance our product lines as well as business processes.
As the captain of this ship, I recognise that opportunity, innovation and growth are interwoven and serve as the nuclei that will spur on our success. I echo this to my colleagues constantly, asking them to always have the courage to innovate, to be fired up for growth, and believe that together we will be able to accomplish many possibilities.
UAI has recently earned ISO 9001:2008, a feat many companies only dare to dream of. But UAI will not rest on its laurels. We will continue to strive for greater and grander accomplishments to benefit our communities. Perhaps the future is something we will create and not just enter into.
Earning ISO 9001:2008 Quality Management System Certification was a big milestone for the company. What challenges and protocols did this involve?
UAI’s business growth in the past decade has made it imperative for
us to standardise processes and management systems so we can continue improving and maintaining the quality of our products. I mandated company managers to focus on 4 key elements to ably prepare UAI for a tougher, more competitive business environment
in the future: strengthen processes, institutionalise systems, empower people, and utilise technology.
In May 2016, the management team initiated steps to earn ISO 9001:2008 Quality Management System Certification, which necessitated a thorough review, evaluation and restructuring of our core processes and systems to conform to ISO standards.
After 7 months of spirited teamwork, UAI became the first and only industrial auction
company in the world to achieve ISO 9001:2008 Certification. Our ISO-certified system focuses on perpetual improvement in all areas of operations, especially in the production of quality products and achieving total customer satisfaction.
We will unfalteringly strive to offer and sell highly reliable products that provide the best value and benefit to our customers. Our commitment to employ best business practices will constantly enhance the enterprise value of the company for our shareholders, the quality of life of our employees, and the communities where we conduct business.
How important is it to you that UAI contributes to the development and enrichment of its people and surrounding communities?
Every day I go to work knowing that the livelihood of all our employees and their families rests on my shoulders, I cannot fail them. From that I now realise that my life’s purpose is to be a man for others, and I hope I am. UAI is the corporate sponsor of the University of the Philippines Women’s Volleyball Team. I’m an alumnus of the University of the Philippines, Class of 1989, and this is my humble way of giving back
to my alma mater.
United Auctioneers also regularly initiates and supports civic activities as part of the company’s corporate social responsibility program. We have organised and equipped the UVEAT (UAI Volunteer Emergency Assistance Team), which is composed of 50 volunteer company employees who have undergone rigorous training on first aid, basic life support, emergency rescue, and cardiopulmonary resuscitation.
UVEAT will be mobilised this year to respond to calls for search and rescue assistance during times of crisis in provinces, cities and municipalities surrounding Subic Bay Freeport Zone. We hope this initiative will start a ripple effect and create big waves for the betterment of our society.
Who or what inspires you to keep succeeding, both in life and in the workplace?
Many moons ago, in my younger years, at the age of 16, I was a dreamer and I dreamed big. I guess I still am a dreamer in a lot of ways. Since then, my father has been my constant source of inspiration. He encouraged me to find my niche and supported me without hesitation, and he did not fault me for the mistakes I made. On the contrary, he said mistakes just prove that I am doing my best, and that I am headed for something great. “No good comes out of doing things right all the time,” he told me often.
I am also constantly grateful for my family, who give me newfound inspiration every day. My vision to succeed provides the adrenaline rush I need to get things done. Their unwavering support and faith in my abilities and capabilities cement the foundation from which I strive to contribute greatly to society. Early retirement has long been scratched out of my life plans.
Who is allowed to buy & sell with UAI?
Items up for auction are provided to UAI from locals as well as consignors from Japan, the US, Europe and numerous other Asian countries. Items have been bought and exported to Singapore, Hong Kong, Thailand, the UAE, and Vietnam. Around 90 per cent of trucks, construction and industrial machines that UAI lines up for auction come from Japan, and 100 per cent of UAI’s buyers are local to the Philippines. UAI charges its consignors commission rates based on the volume and sales of their consignments. Large-scale consignors that remain loyal partners over many years are rewarded with substantial discounted consignment fees and commissions.