Universal Robina Corp., which manufactures the popular Jack ‘n Jill-branded snacks and C2 iced tea, is preparing to expand to Myanmar as it continues to widen its reach in the region to complement its booming domestic business.
In an interview at the sidelines of the company’s annual stockholders’ meeting on Thursday, URC president and chief executive officer Lance Gokongwei said the firm recently obtained a license to invest in the Southeast Asian nation.
While still in the early stages of its development, Gokongwei said URC saw the potential in Myanmar, citing its fast-growing population, its borders with larger economies like China and Thailand and its natural resources.
“It’s a long-term play. Myanmar is rapidly transforming. It wants to transform itself into another tiger economy like Vietnam and the Philippines,” Gokongwei told reporters. “But it’s still early days.”
“The plan is to set up a facility and organization there to start selling various products which we cannot disclose at this point,” he added.
URC will initially invest $20 million to $30 million, Gokongwei said. The plan is seen eventually evolving into turning Myanmar into an export base.
“The plan is to address both the local and domestic export markets,” Gokongwei said.
The company continues to eye new markets abroad even as its local business is seen to outpace the growth of its international business, which accounts for about a quarter of the company’s revenue, which hit P71.2 billion in its 2012 fiscal year.
The Philippines recently obtained an investment grade rating from Fitch Ratings and the increasing confidence in the country’s prospects has been drawing massive amounts of capital inflows, driving up the value of the peso.
“Because of the strength of the peso and the resiliency of Philippine demand, we expect the Philippine [business] to grow faster overall than the international business, at least in peso terms,” Gokongwei said.
For the current fiscal year, he said net sales were seen to grow between the “low to mid-teens” and a slight expansion in margins was expected as input prices were seen to stay “soft.”