Philippines: Barging Ahead

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Missionary Zeal. Under Fernandez and Marshall, Lusteveco has barged ahead with a sort of missionary zeal. Sales have almost doubled since 1963, but the company is chary with dividends. It plows nearly all its earnings back into expansion. "Until we are sure we can meet the needs of the country," explains Fernandez, "we will continue to give that first priority and dividends second."

To meet those needs, Lusteveco has been spending some $4,000,000 a year on new equipment, which is a lot by Philippine standards. Its own yards at II-oilo turn out a new tug every six weeks, two new barges a month—most of them prestressed concrete creatures that carry 2,000 tons of cargo, are cheaper and easier to maintain than standard steel barges.

Standard as such hardware and experience may be in other parts of the world, it is in short supply in Southeast Asia, as U.S. military logistics experts have discovered to their chagrin. Lusteveco tugs and barges helped break the Saigon shipping bottleneck, and the company is bidding for similar work at Thailand's choked port of Bangkok. Still, happy as he is to have the U.S. military business (which now accounts for 12% of sales), Fernandez finds that he is hard-pressed to "accommodate that Viet Nam effort," looks for the day when he can "bring back a lot of the equipment and put it to work" at home.