Wellex joins Internet bandwagon

Business tycoon William Gatchalian's Wellex Industries Inc. is the latest firm to join the Internet bandwagon as it announced plans to spin off into the information technology (IT) sector, including all Internet-based businesses and e-commerce facilities.

In a report to the Philippine Stock Exchange, Wellex corporate secretary Arthur Ponsaran said the company's board has approved management's proposal to enter into the IT business.

He said Wellex intends to position itself very quickly in this rapidly expanding sector via the acquisition of existing or start-up technology companies through the setting up of subsidiary operations or creating operating divisions in the company which can be subsequently spun off."

Wellex, Gatchalian's holding company for the plastics and food processing units, expects a hundred-fold jump in its net income to around P1.2 billion this year as its subsidiaries start and expand operations, its president Sherwin Gatchalian had said.

He said the huge increase would factor in the vending-in of the operations of Plastic City Industrial Corp. (PCIC) last November as well as the start of commercial production of Philfoods Asia Inc. this year.

PCIC is the country's first fully-integrated manufacturer of plastic products used in various industries such as packaging, appliances and other durables, waterworks, sewerage and telecommunications. One of the largest in Southeast Asia, its plant sits on a 50-hectare property in northern Metro Manila.

Philfoods, on the other hand, is being groomed into a major processor and producer of packaged beverages and foodstuffs which include bottled drinking water, fruit juices, powdered drinks and cereal-based products such as biscuits and instant noodles.

Gatchalian said the bulk of about 75-80 percent of the projected income would come from PCIC, while the start-up Philfoods would chip in the remaining 20 percent.

Wellex has been improving on its bottom line over the past three years. From a P21.2 million loss in 1996, the company made a turnaround to post profits of P1.9 million and P7.88 million in 1997 and 1998, respectively despite the lingering effects of the Asian financial crisis.

Gatchalian added that the company has tapped a strategic foreign partner to bring in equity and technical expertise to Philfoods, which targets to gobble up about five to 10 percent market share in the fruit beverage industry on its first year of operations.

He said the foreign partner, an Asian company, would bring in the technology as well as its branded products into the country. These initial five product lines would be marketed for the larger consumer base in the C-D market.