URC seals jv with Japan’s snacks giant

MANILA, Philippines - Gokongwei food manufacturing arm Universal Robina Corp. and  Japan’s largest snack food firm Calbee have finalized their previously announced partnership, which is to build a 50-50 joint venture company that would produce “unique and high quality” snack products in the Philippines.

In a disclosure to the Philippine Stock Exchange, URC said the new company with an initial capital of P654 million,  will start manufacturing products next year.

The joint venture company is seen to hit annual  net sales of P2 billion by 2020 and contribute to URC’s medium- to long-term business performance.

“The joint venture aims to grow sales of Calbee products and expand market share in the Philippines,” URC said.

Tokyo-based Calbee is the largest snack food company in Japan, with sales of over ¥179.4 billion and a dominant 52.3-percent share of the Japanese market. It manufactures and sells snack confectionary, bakery food and cereal food.

URC, on the other hand,  is the market leader in salty snacks, candies, chocolates, and ready-to-drink tea categories in the Philippines. It is now the number two player in the coffee market.  It controls 39 percent of the snacks market, 37 percent for candies, 25 percent for chocolates, 16 percent for biscuits, 80 percent for canned beans, 43 percent for cup noodles and 80 percent for ready-to-drink tea.

The company grew  its net profit by 26 percent in the quarter ending December last year to P2.89 billion on the back of steady growth of its branded consumer foods business.

URC has set a $200 million capital expenditure program this year, higher than the historical average of about $130 million.

Overseas, URC holds 23 percent of the biscuits market and 26 percent of the wafers segment in Thailand.  It also  controls 36 percent of Vietnam’s ready-to-drink tea sector.