Tanduay to expand Negros liquor plant

MANILA, Philippines – Tanduay Holdings Inc., the liquor unit tycoon Lucio Tan, will spend P500 million to expand the production capacity of unit Asian Alcohol Corp.’s plant in Negros Occidental.

At the sidelines of the company’s stockholders’ meeting yesterday, Tanduay senior vice-president and chief finance oficer Nestor C. Mendones said the facility will add an additional capacity of 100,000 liters per day when the expansion is completed.

The expansion is targeted to be completed in October this year.

Mendones said the company is eyeing a net income this year of between P300 million and P400 million on the back of a projected five percent rise in sales volume.

However, Mendones said the company’s financial performance may be affected by a proposal to increase the excise tax on liquor. An increase in excise tax could result in the imposition of an additional P4 to P5 increase in rate per bottle.

Based on a survey conducted in 2007, Tanduay held a 30-percent share of the country’s liquor market.

Last year, Tanduay reported a more than three-fold increase in its net earnings mainly due to higher sales and effective cost-saving strategies. From a meager P100.6 million in 2007, Tanduay’s net income rose to P338.2 million

Net sales grew 18.3 percent to P9.05 billion from only P7.65 billion, helped by price adjustments and sustained advertising and promotional campaigns.

Sales volume rose 14 percent as a result of the favorable economic performance in Southern Philippines, the company’s market stronghold. 

The flagship Tanduay Five-Year Rum brand continued to lead all brands, capturing 79 percent of total sales.

The opening of a new production facility in Cagayan de Oro, Misamis

Oriental also contributed to the sales growth as its products are more accessible and readily available in the Mindanao region. The CDO plant currently serves 50 percent of the region’s requirements.