Brothers Alfonso Iñigo and Alexone Rolando, sons of Dr. Rolando Hortaleza, are now at the helm of Hortaleza Corp.’s financial technology and food businesses.
Alfonso is the president and chief operating officer of Prime Global Finance Corp. (PGFC), the group’s lending arm, while Alexone is the president of Prime Global Corp. (PGC) whose major business is in fast-moving consumer goods (FMCG).
The brothers are now ready to take on the challenge of running the business from their father Rolando, bringing it to new levels.
“He still stands as chairman and CEO, and he is still there in terms of strategic directions, and he is still involved in terms of the product portfolio–more on the creative side of the business such as launching new products. But in terms of operations, it is now me and my brother who manage our respective businesses,” Alexone said.
The brothers were given bigger roles after their trademark company Splash Corp. was sold in 2019.
“He is semi-retired, trying to enjoy life. He sits on the board of the group, but it is very rare for him to come to the office,” Alfonso said, referring to his father.
Alfonso aims for a bigger and stronger PGFC, with the company investing heavily in digitalization.
PGFC is an end-to-end financing company established in 1997 that caters to small and medium enterprises (SMEs).
“When I took over in 2019, we had been innovating and investing heavily on digital platforms for the past four years,” he said.
PGFC has shown tremendous growth in the middle of 2022, the time when SMEs started to realize how the company benefits users. It is the only financing institution that offers diminishing loan rates compared to other financing solution providers who impose add-on rates where interest is based on the total loan value.
“With us, it is diminishing interest. Whatever is the outstanding balance, we base the interest from there,” Alfonso said.
He said the company is the largest SME fintech, with end-to-end digital functions compared to other companies. The company continues to grow its loan portfolio in the billion-peso mark.
Unlike other financing firms, PGFC has a dedicated portal for borrowers to log-in and check the status of their loans. The process from loan application to processing is purely digital. The only time there is physical contact is during appraisal for signing of documents and releasing of loan.
PGFC offers a suite of financing options to SMEs from as low as P1 million to as high as P25 million.
“Fifteen percent of our clients graduate to bank financing. We are helping the SMEs, and we know that the cost of capital is very expensive. The ultimate goal for us is for our customers to have a bank loan,” Alfonso said.
While PGFC’s core function is lending, it is embarking on an aggressive expansion to launch an insurance platform, solely for its main clients—the SMEs.
Alfonso is optimistic that the new insurance platform will be one of the company’s major products, seeing that insuretech could be the next big thing in the Philippines.
He is bullish about the prospects for PGFC. “At the end of the day, because of the restrictive banking laws, there is always room for financing. In the Philippines, SMEs don’t have access to capital. I think the business will continue to grow. It’s just finding the right clients,” he said.
For Alexone, the focus for PGC rests heavily on investing in research, development and innovation, to create exciting new products that will buttress the company’s future growth.
PGC is also re-entering the personal care industry, five years after selling Splash Corp.
“Starting next year, we are planning to launch innovative products that will address the gaps we see in the market,” Alexone said.
PGC is poised to raise the necessary investments to back its re-entry into the personal care space, but the need for a dedicated facility can wait, he said.
“If we establish the volume, we can always plan to have a manufacturing facility, potentially within the next three to four years,” Alexone said.
Meanwhile, PGC is expanding its food manufacturing operations by investing in a P600-million plant in Bulacan, set to be completed by June 2024. The Hortalezas’ food business accounts for 75 percent of the company’s revenues, mainly from its popular Barrio Fiesta product line that includes the bestseller shrimp paste or the local “bagoong.”
The expansion will easily increase production capacity by 50 percent. Right now, the company’s current output barely meets demand, necessitating the need to move to a new facility.
PGC is looking at penetrating mainstream markets overseas in the near term to gain substantial foothold of the global market for food products. The company is actively exploring various options to achieve this goal.
“We anticipate initiating these efforts in 2025. Once our new facility is operational, we can ramp up production capacity, enabling us to engage with these foreign markets effectively. We aim to market beyond just Filipinos in the future. We plan to be more than just a Filipino brand for Filipinos, but become a global brand,” Alexone said.
Hortaleza Corp.’s strategic moves in both personal care and food manufacturing underscore its commitment to innovation, growth and a vision for expanding its reach in the global market.