Pepsi Phls plans more investments

MANILA, Philippines - Beverage maker Pepsi-Cola Products Philippines Inc. (PCPPI) is preparing for long-term consumption growth as it invests in various manufacturing plants.

“We remain optimistic about the country’s consumption story at the back of robust economic growth,” said PCPPI president Furqan Ahmed Syed during the company’s annual stockholders meeting yesterday.

“We will continue to invest in the long-term future of our business, keeping in view the needs and aspirations of our Filipino consumers”, Syed added.

To meet the rising demand, the beverage maker invested significantly in its manufacturing facilities, including a new plant in Sto. Tomas, Batangas that in scheduled to start operations in the second half of 2014.

“These investments on the company’s long-term growth were supported by Pepsico International and Lotte Chilsung Beverage Co. Ltd’, providing vital access to their complementary strengths and resources,” PCPPI said.

In line with the long-term growth strategy, PCPPI invested in capacity expansion and distribution assets like containers, trucks and coolers. It also introduced Tropicana Twister Mango and Mirinda Powder Fun Mix last year.

Capital expenditures rose by a third to P4.2 billion in 2013 from P3.1 billion in the previous year. PCPPI committed to invest P3.5 billion this year to continue expanding its production and distribution line as demand is expected to rise further.

In the first quarter, higher amortization from its investments cut the net income of PCPPI despite the growth in beverage sales. Profits of PCPPI fell by almost 50 percent to P136 million from P270 million “as a result of intense price competition and higher amortization due to investment on advanced containers.”

This offset the 11-percent improvement in sales volume increase in the first quarter. Sales revenue rose eight percent to P6.4 billion due to volume growth across major carbonated and non-carbonated beverage brands.

PCPPI is the exclusive bottler of PepsiCo beverages in the Philippines which include Pepsi-Cola, Mountain Dew, Seven Up, Mirinda, Gatorade and Tropicana, Mug, Tropicana, Lipton, Sting, and Premier.

The listed firm is partly owned by Lotte Chilsung, one of the biggest beverage companies in South Korea. The listed company has established manufacturing facilities across the country, serving at least 500,000 outlets and providing employment through its extensive distribution network.