URC allots $40M to expand Thai, Vietnam biscuit lines

Universal Robina Corp. (URC), the food manufacturing arm of Gokongwei flagship holding firm JG Summit Holdings Inc., is spending $40 million (P1.92 billion) to expand its biscuit and wafers production lines in Thailand and Vietnam.

URC president Lance Gokongwei told reporters following the company’s annual stockholders’ meeting late Thursday that the expansion of its biscuits business forms part of its programmed capital budget for the year amounting to P7.1 billion.

At the same time, Gokongwei announced that URC is entering the P2-billion chewing gum market as it seeks to further strengthen its leaderhip position in the branded convenience foods business.

URC also intends to launch new beverage products to cater to the health conscious people.

Aside from this, URC is expanding its sugar refinery by raising its capacity to 9,000 tons per day from the current 5,000 tons.

The company is also beefing up its manufacturing facilities for its agro-industrial division.

Funding will come from internally-generated cash. As of end-September 2006, URC’s net cash flow amounted to P3.8 billion.

URC last year successfully sold a total of 634.78 million common shares in a primary and secondary offering at P18 each, raising around P11.43 billion.

Gokongwei said URC will retire in February next year the remaining $110- million debt notes out of the $125-million bonds issued in 2003. "We will definitely retire that without issuing new debts," Gokongwei said.

URC will pay cash dividends of P0.68 to all shareholders on record as of May 18, payable on June 14.

The company posted a net income of P3.02 billion in its fiscal year ending September 2006, up 19.4 percent from the previous level’s P2.53 billion on the back of a 12.8-percent growth in sales due to the strong performance of its beverage products like coffee and tea.

Sales of other core products like snacks, candies and chocolates also boosted sales.

URC manufactures branded consumer foods like Jack & Jill snacks, Great Taste coffee mixes, Cloud 9 and Nips chocolates, Magic Flakes biscuits, XO and Maxx candies, Payless and Nissin noodles, and Hunts canned products and sauces, among others.

The company also has production facilities in Malaysia and Indonesia and sales/marketing offices in Hong Kong and Singapore.