Emperador hikes capex to P1.5 billion

MANILA, Philippines — The liquor unit of tycoon Andrew Tan’s Alliance Global Group has increased its spending budget this year to cater to more foreign buyers as domestic sales take a hit from the liquor ban enforced by local governments.

Emperador Inc. president Winston Co yesterday said the firm would boost its capital expenditures by 50 percent to around P1.5 billion this year, from P1 billion in 2020.

“With the vaccinations underway, we expect some easing of pandemic restrictions this year and onward with increased air travel and overall some form of normalcy,” he said.

Co said the higher capex would allow the world’s largest brandy maker to accelerate its expansion in the foreign market, especially in China, Europe, and the Americas. He said demand for intoxicating alcohol differs around the world, depending on how liquor is perceived by the culture.

“In the Americas, particularly the United States, and in Europe, particularly the United Kingdom, where liquor is an essential product, sales are doing very well. In the US, we grew by more than 20 percent, while in the UK, we grew by more than 30 percent,” Co said.

Likewise, Emperador’s sales in China more than doubled last year, he said.

On the other hand, the Emperador chief said local sales suffered from the liquor ban applied by local governments to prevent drinkers from gathering in crowds and avoid the spread of the coronavirus.

Co added the brandy maker plans to improve its reach online to take advantage of the growing role of e-commerce in business operations worldwide.

The liquor firm grew its net income by around 18 percent to P8.03 billion last year, from P6.83 billion in 2019. Revenue also rose by more than two percent to P52.83 billion, from P51.56 billion, on the back of higher whiskey sales abroad.

Sales of its scotch whiskey segment jumped by at least 14 percent to P15.94 billion, from P13.93 billion. Brandy revenue, however, fell by close to two percent to P36.89 billion, from P37.62 billion.

Emperador sells its brandy and whiskey bottles in over 100 countries across six continents, and manages production facilities in the Philippines, Spain and the UK.

The manufacturer’s products include brandy classics Emperador and Fundador, single malt Jura and Tamnavulin, blended Whyte & Mackay, among others.