Japan-based snack and noodles leader Nissin Foods Holdings Co. Ltd. has increased its stake in a joint venture company with Filipino homegrown consumer firm Universal Robina Corp. to expand its noodle products portfolio.
Nissin raised its stake in URC subsidiary Nissin-URC, which manufactures Nissin Cup Noodles, Nissin Ramen and Nissin Yakisoba in the Philippines.
In a disclosure to the Philippine Stock Exchange, URC said it would cut its stake in Nissin-Universal Robina Corp. (NURC) to 51 percent from 65 percent to allow its Japanese partner to increase its stake.
Nissin-URC purchased URC’s Tarlac noodle plant, equipment, and inventories, granting Nissin-URC the license to produce Payless products.
The increase in Nissin’s investment in Nissin-URC will enable the Japan-based company to produce Payless instant noodles of URC, using its new technology and equipment. URC will handle marketing, sales and distribution.
“We have been with Nissin-URC since 1995 and know that Nissin and Payless are great products that have a lot of potential especially in a growing market such as the Philippines,” said Eigo Ogiwara, Nissin chief representative for Asia.
Nilo Mapa, URC managing director, said the resulting synergy will make Payless and Nissin bigger market players, making URC more efficient and profitable.
“This transaction will help us ride the wave of growth that we expect in the coming years and beyond. We are now second in the market and we want a bigger piece of the pie,” Mapa said.
URC sees the great potential in the noodles market as it has “become an all-day staple in the country, Mapa said, citing that the trend will grow and become more pervasive as the country’s population grows and seeks fast-food convenience.
In the first nine months of the year, URC’s net income grew by 1.6 percent to P8.6 billion from a year ago, while revenue grew 14.5 percent to P69.2 billion led by strong sales of its branded consumer snacks.