Snack food and beverages manufacturer Universal Robina Corp. (URC) has absorbed its packaging subsidiary into its operations to reduce expenses, the company said in a disclosure to the stock exchange.
It said its board of directors approved the subscription to the shares of
CFC Clubhouse Property Inc. (CCPI), amounting to 442.42 million common shares. Paid up capital for the transaction totaled to P461.32 million.
“The proposed merger is expected to benefit URC in the reduction of expenses through the economies of scale, centralized administration and greater efficiency,” the company said.
CCPI is originally a wholly owned subsidiary of URC’s parent firm JG Summit Holdings Inc.
On April 1, CCPI will be producing flexible packaging materials, being one of the major suppliers of flexible packaging materials for URC’s snacks and beverages division.
The subscription of CCPI 442.42 million shares — out of its 500 million shares – will allow packaging firm to accommodate URC’s growing demand for dry laminated and extruded wrappers and be consolidated fully into URC’s operations.
URC has programmed P9 billion for capital expenditures this year, higher than last year’s P7.69-billion actual spending, to jumpstart its capacities expansion mostly for the branded consumer food (BCF) products.
URC’s first fiscal quarter net income from October to December 2014 went up 12.6 percent to P3.25 billion from P2.88 billion a year ago as revenues increased by 18.7 percent to P26.95 billion from P22.7 billion for the same time last year mostly on BCF segment.
The company manufactures leading brands for salt-flavored snacks, candies, chocolates, and ready-to-drink tea under C2 green tea and Jack N’ Jill. It is the number two player in the coffee market with its Cafe Puro and Nescafe products.