Tanduay profit doubles in 3 mos on higher sales

Lucio Tan-owned Tanduay Holdings Inc. more than doubled its net income for the first three months of the year as sales volume in all its product lines posted double-digit growth.

Tanduay reported a first quarter net profit of P191 million, 106 percent more than the P93 million income during the same period last year.

The company’s liquor sales grew 26 percent as new products and a new marketing campaign, which gave Tanduay a new look that appealed to a younger segment of the liquor market, boosted demand for its products.

Tanduay said anchor brand Tanduay Five Years Rhum remained a best seller, while newly introduced Barcelona Brandy and Cossack Vodka enjoyed good market share. For Barcelona, volume rose 583 percent while Cossack’s grew 61 percent.

Tanduay earlier said it has earmarked P1 billion for its capital expenditure program for 2008 and 2009.

The money will be allocated for the expansion and upgrade of the distillation capacity of subsidiaries Asian Alcohol Corp. and Absolut Chemicals Inc..

 Tanduay also said it will be acquiring additional fast lines for  its Cabuyao and Cagayan de Oro plants to further increase production capacity.

The company recently completed the construction of its fourth plant in Cagayan de Oro, Misamis Oriental. The P600-million plant was located in a 10-hectare property of Tanduay’s sister firm Asia Brewery.

The new plant is equipped with an integrated washing and bottling line that utilizes the latest in robotic technology. It will serve the requirements of the fast-growing Mindanao market which presently accounts for 33 percent of total company sales.

For its Murcia plant in Negros Occidental, Tanduay said it has installed an integrated fast washing and bottling line. The improvement will boost the capacity by 100 percent.

The plant will serve the needs of the Panay and Cebu sectors.

The completion of the two plants will result in substantial gains in manpower and logistics costs. Quality will be likewise improved and would be less costly as the new lines are all equipped with electronic bottle, label and weight inspectors. Depalletizing and palletizing are also fully automated.

Earlier, Tanduay acquired 10.86 percent interest in Victorias Milling Co. Inc., ensuring the continuity of the company’s existing supply of molasses, the main ingredient in rhum production.