San Miguel Purefoods Co., the food manufacturing arm of Southeast Asia’s largest food and beverage conglomerate San Miguel Corp., has earmarked P1.5 billion for the expansion of its piggery business in Sumilao, Bukidnon.
“Now that the dispute over the Sumilao property is settled, we are pursuing the expansion of our piggery, drying facility and feed mill operations,” said Purefoods president Francis Alejo III.
He said the alloted budget will be utilized over a period of two or three years.
Amid an increasingly difficult business environment, he added Purefoods is hoping to match last year’s financial results by continuing to invest in product and marketing innovations while pursuing programs to achieve operational efficiencies.
“The remainder of 2008 will be tough but judging by our first quarter results, we are hopeful we can achieve our growth targets for the year,” said Purefoods chairman Eduardo Cojuangco Jr.
From January to March 2008, Purefoods registered an 18 percent increase in revenues to P16.05 billion, mainly driven by higher volume across all its businesses, improved selling prices and the strong performance of its poultry and flour business.
Cojuangco said efforts and programs to drive down commodity costs have already resulted in considerable savings for the company. Purefoods’ IAIZ (Integrated Agro-Industrial Zone), for instance, has already directly reduced raw material input costs by about P161 million in 2007.
“Although we cannot predict how severe the current downturn will be, we expect its impact to be felt in the coming months. The silver lining for the company is that we have the potential to outperform competition because we are getting better and better at managing the fundamentals of our business,” Cojuangco said.
To cover rising costs of raw materials, Purefoods has increased selling prices as early as January from three percent to 10 percent, depending on the product.
Cojuangco said the company’s newest product offerings, namely Mom’s Kitchen ready-to-eat meals, Magnolia Real Good Noodles, Ulam King and Daily Queso, have been well received by the public.
Sales at its 230 Magnolia Chicken Stations located at leading supermarkets nationwide have been growing at an average of 242 percent annually since it was launched in 2004. The stations offer consumers a wide selection of different chicken cuts and preparations.
Cojuangco said the company’s innovative programs will help it “flex its range against a broader demographic, allowing it to build on a base of loyal consumers when the economic situation improves.”
The company’s Tender Juicy hotdogs and Cheezee are now sold in “tingi” and “takal” retail portions in several wet markets in major urban centers.