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By Likha C. Cuevas-Miel, Reporter
DESPITE the uncertainties brought about by the
global economic slowdown and high inflation, the maker of C2 drinks
and Jack ‘n Jill snacks said it expects revenues from its
international business to grow by double-digits on the back of
strong performance from its Thailand and Vietnam operations.
On the sidelines of a stockholders meeting,
Lance Gokongwei, Universal Robina Corp. (URC) president and chief
operating officer, said that revenues from overseas will increase by
30 percent in dollar terms this year, largely due to the continued
growth in the company’s biscuits and wafer business in Thailand.
At present, URC is the market leader, taking about 30 percent of the
country’s biscuits and wafer segments and among the top five
players in the snack foods and confectionery business.
The overseas operations will also be buoyed by
its Vietnam business on the back of the growth of its C2 tea drink.
The food and beverage arm of JG Summit Holdings Inc. expects the
momentum in the beverage market to be sustained as the market there
is growing quite strongly. “I would suspect we are the market
leader or strong number two in the tea section,” Gokongwei said.
The executive told shareholders that C2 will
soon be exported to Thailand, Malaysia and Indonesia. At the moment,
the food and beverage firm has no plan of adding manufacturing
plants and direct distribution presence in other parts of Asia.
With this, the company may realize the $200
million a year revenue target by year-end, he said.
In fiscal year 2007 ending September, URC’s
international branded consumer food group accounted for 19 percent
of total sales. It passed the $150 million mark and reached an
equivalent of P7.2 billion in sales but this was 7.6 percent down
year on year due to a stronger peso vis-à-vis the dollar.
“On a balance sheet basis the strengthening of
the peso is negative because we have more overseas assets. So if the
peso strengthens against the [dollar], we have to record a loss. But
on an ongoing operating basis, the strong peso is good for us
because most of our raw materials are priced in dollars. I say [the
appreciating peso] has [an overall] neutral to positive effect,”
Gokongwei said.
To cope with the soaring prices of raw materials
like wheat, soya and coffee, URC had to raise prices of most of its
products across all segments. Gokongwei said prices of wheat have
more than doubled in the world market since last year and this
pushed up production costs for noodles and biscuits by 10 percent to
15 percent. Prices of soya, which is the raw material for hog and
chicken feeds that URC also manufactures, have also risen rapidly.
“Flour will be most affected because wheat is
its only raw material. Potentially we have to consider additional
increases because the price of flour has gone up very quickly, also
the shortening and fat,” Gokongwei said.
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