URC allots up to P9 B for capex

MANILA, Philippines — Universal Robina Corp. (URC), the Gokongwei-led snack foods giant, is setting aside P8 billion to P9 billion for capital expenditures this year, its president and chief executive officer Irwin Lee said.

The capex could even go higher at P9 billion, a huge portion of which would be spent to increase URC’s manufacturing capacity.

It would be used to support growth including measures to expand capacity.

Lee said the company is looking at new sites for expansion and new production capacities.

URC inaugurated last March a new sugar mill in Kabankalan City in Negros Occidental.

The new mill can crush up to 6,000 metric tons of canes per day, increasing URC subsidiary Sonedco’s total milling capacity to 14,000 tons of canes per day, and URC’s capacity to 40,000 tons of canes per day.

The expansion project began in April 2017. Full commercial operations are set to start during the 2019 to 2020 crop year.

In the first quarter, URC posted a net income of P3.1 billion on the back of a positive operating income which grew 10 percent to P4 billion.

URC said this was driven by higher sales volumes and average selling prices.

Lee said recovery efforts have gained traction, noting that the company is likely to sustain the growth momentum.

“We expect stronger momentum for topline growth,” Lee said. 

URC registered net sales of P33.3 billion during the quarter, up seven percent.

Domestic revenues increased 11 percent to P15.6 billion driven by the good performance of all categories, with the coffee business pivoting back to growth after three years of decline.

Lee said URC has made headway in regaining its market share in the cutthroat coffee business after it relaunched Great Taste White on Jan. 11.

He said the company would continue to improve its products as well as strengthen its distribution network.

The company launched new coffee variants Original GT White, White Caramel and White Crema.