LT Group bares expansion plans for operating units

MANILA, Philippines - LT Group Inc., the investment holding firm of tycoon Lucio Tan, has outlined the expansion plans for its operating units.

The strategy is focused on increasing domestic market share, tapping overseas markets and launching of new products, the conglomerate said.

Tobacco maker PMFTC Inc., a joint venture between Phillip Morris Philippines Manufacturing Inc. and Fortune Tobacco Corp., aims to maintain its dominance in the local market by introducing new products.

“PMFTC’s principal strategies are to profitably grow its business by maintaining or increasing its market share and penetration within an attractive and growing market,” LT Group said.

LT Group said PMFTC will also increase its productivity, efficiency and profitability “through improvements in its production, distribution and marketing capabilities.”

Profits of PMFTC, which is 49.6 percent owned by LT Group, hit P12.5 billion last year on P78.9 billion in revenues.

Increasing market share is also a priority for beverage producer Asia Brewey Inc. (ABI).

“ABI plans to target growth through younger consumers, particularly with regard to its energy drinks and alcopops,” the company said.

It will also enter into new product segments like the yogurt, premium beer and soy milk by partnering with foreign companies.

ABI, the company behind alcoholic brands Beer na Beer, Colt 45, Tanduay Ice, Coors Light and Manila Beer, controls nine percent of the local beer market. It is also into non-alcoholic beverages with Cobra energy drink, Absolute mineral water, Virgin Cola and Vitamilk.

This year, ABI said it will start the production and distribution of ready-to-drink Nestea ice tea under license from Nestle S.A.

Tanduay Distillers Inc. (TDI) is also set for expansion this year.

“TDI’s principal strategy is to gain and increase its market share by introducing new products to cater to the current and emerging preferences of the markets and to strengthen its distribution capabilities,” the company said.

Revenues and income before taxes of TDI hit P12.9 billion and P1.5 billion, respectively, from P12.4 billion and P1.6 billion in 2011.

LT Group said ABI and TDI will benefit from an extensive distribution network that will increase the brands’ market penetration.

TDI, the second-largest producer of rum in the world with a total of 140 international awards to its credit, plans to expand its export business through new rum products that will be sold in the United States starting this year.

LT Group said property developer Eton Properties Philippines Inc. will make use of its landbank for recurring income.

Eton said that to reduce its earnings volatility and diversify its revenue streams, 30-35 percent of its revenues will come from 13 rental spaces from its office properties and retail malls.

“Eton intends to build and lease at least one office building either in Eton City (Laguna), Eton Centris, or Makati central business district every year for the next five years,” LT Group said.

Eton said its landbank is sufficient for the next 20 years of development.

To date, LT Group owns 100 percent of Tanduay Distillers Inc. , 99.99 percent of Asia Brewery Inc., 59.9 percent of Philippine National Bank and 99.3 percent of Eton Properties Philippines Inc.

LT Group recorded higher earnings last year due to the improved performance of its units. Net income climbed 29 percent to P7.51 billion from P5.82 billion a year ago.

LT Group serves as the umbrella company for Tan’s various businesses. The consolidation program last year aligns all of Tan’s assets under one roof, allowing the group to leverage emerging opportunities in different sectors and provide better realization of value for investors.