CDO says price hike possible

MANILA, Philippines—If commodity price hikes continue, a new round of price increases may be in order for processed meat products under the CDO brand, according to Jerome D. Ong, president of CDO-Foodsphere Inc.

And pricier products may mean flat or zero growth for the company as consumers react to price increases by cutting back purchases.

“Like most companies, we are facing the challenge of spiraling commodity prices,” Ong said in an interview.

Ong said that Foodsphere is improving manufacturing and energy efficiency as well as its distribution strategy to cope with rising cost of inputs.

This way, he said, the company is able to absorb some of the price increases in raw ingredients such as pork as well as materials such as tin cans.

However, if commodity prices continue to go up, the company may consider another round of price increases, he said.

“We are in the middle of a price increase. We had one last March, about 4 to 5 percent,” Ong said.

If the company were forced to have another 5-percent increase in prices across its product range, that may result in flat growth in sales volume for the year.

For the past five years, or from 2005 to 2010, the company had been churning out 10 to 15 percent average annual growth.

Hotdogs are the top sellers aside from burger patties and native specialties such as tocino.—Riza T. Olchondra