Amid inflation concerns, URC, Rebisco expect topline growth

MANILA, Philippines — Snack food firms Universal Robina Corp. (URC) and Republic Biscuit Corp. (Rebisco) are expecting to see growth in their top lines this year, but noted inflation remains a concern.

“We’re looking for about mid- to high single-digit growth overall (in top line). And that will be driven by a lot of return to growth in the Philippines but also a continuation of our very good growth internationally,” URC president and CEO Irwin Lee told reporters on the sidelines of The Business Manual CEO Awards.

He also said the company expects a boost from the national elections this year, with its products among those purchased and distributed by candidates during the campaign period.

“Historically, there’s always been a bump whenever there’s an election year,” he said.

In terms of capital expenditures, he said the company is looking to spend anywhere between P8 billion and P10 billion this year, the same level as in the past few years.

He said the company is spending on infrastructure and production facilities to boost capacity.

Last year, the company broke ground for a new production facility in Malvar, Batangas.

It also opened a new flour mill in Quezon last year.

“We’ve got some good capacity, but we’re also looking at future expansion and future capacity needs. So we’re probably going to invest ahead in perhaps some areas that we can prepare for some needed capacity growth probably in the next few years in places like Thailand and Malaysia,” Lee said.

Rebisco vice chairman Jonathan Ng told reporters the firm is also optimistic for this year and expects a modest double-digit growth in top line, citing election-related spending.

He said the company is also investing in expanding its production capacity by adding new lines to meet market requirements not just locally, but also in countries where a big group of overseas Filipinos are present.

While both food companies expect growth in top line this year, they cited inflation as a concern.

“Inflation in selective input cost continues to be an issue. I mean people will read about the high cost of coffee, high cost of cocoa beans. So there’s still selected commodities and ingredients that still have high inflationary pressure,” Lee said.

In addition to the high cost of raw materials like cocoa, Ng said the government’s proposal to impose excise tax on single-use plastic is also a concern.

Should the proposal become a law, he said the company is hoping it will not lead to higher prices.

“We’ll do what we can to see what we can absorb and improve with the way we do things, especially with our plastic use,” he said.

Both Lee and Ng were among the business leaders recognized for their contributions to their respective industry at this year’s CEO Awards.