MANILA - The food unit of San Miguel Corp expects sales to grow by at least a tenth next year as it seeks to enter new segments, a ranking executive told InterAksyon.com.
Francisco Alejo III, San Miguel Pure Foods Co Inc president, said the manufacturer is optimistic about its prospects and that of the industry on strong consumer and election-related spending.
"If you look at per capita consumption of pork, chicken and even of dairy products, they are relatively low compared to our neighboring Asean countries so there's a lot of opportunity for increased consumption and we think that's going to happen next year," said Alejo.
Consumer spending, which accounts for two-thirds of the country’s gross domestic product, rose 6.2 percent in the third quarter, helping fuel the 7.1 percent GDP growth in the same period.
Alejo said Purefoods’ value-added meats business consisting of refrigerated processed meat and canned meat will drive the company’s growth next year. Its other business segments are agro-industrial (feeds, poultry and fresh meats), milling (flour products), dairy, spreads, oil and coffee. The company is also engaged in food service and franchising.
"The commodity business - pork, poultry, beef and flour - we still see them growing, but I think the driver will be in the value-added business. You're seeing growth driven by processed meat, dairy, coffee and other value-added products which is good for us because that commands better margin," said Alejo.
Purefoods is also gearing up for new and "bigger" segments of the value-added segment through green field projects and acquisitions, Alejo said without elaborating.
"We are very serious in looking at other categories, but more in the value added segment," he said.
Purefoods' consolidated revenues grew 8 percent year-on-year to P69.4 billion in the first 9 months on the back of higher sales volume in almost all businesses. The company attributed this to marketing activities, new product introductions, improved distribution network and a "slight" increase in selling prices.
Purefoods' net attributable earnings to equity holders inched up to P2.96 billion at end-September from P2.94 billion the previous year.
Alejo said any increase in prices will depend on the behavior of commodity prices, particularly cassava and corn.
"We are dependent on cassava. This year there was limitation in supply, but we see next year there can be an improvement in prices of cassava. We hope prices of corn will be positive as Agriculture Secretary Proceso Alcala has been reporting productivity has increased," Alejo said.
Besides its flagship brand, Purefoods holds several food brands in its portfolio, including Magnolia, Monterey, Star, Dari Creme, B-Meg, and JellYace.
source: interaksyon.com
