The food production arm of conglomerate San Miguel Corp. expects to reverse the decline in first quarter net profit performance in the next three quarters on the back of robust consumer demand, increased production capacity and some price increases.
San Miguel Purefoods Co. Inc., which now operates as a food division of the consolidated San Miguel Food and Beverage (FB), is also expanding its capacity to produce more hotdogs, farm feeds, flour and processed poultry and will likewise start producing ready-to-eat meals out of its hub in Laguna.
“We’re down in net income (in the first quarter) because of preoperating expenses and in addition, because of the movement of foreign exchange (peso depreciation) which impacts cost of raw materials,” Purefoods president Francisco Alejo III told reporters after FB’s stockholders’ meeting on Friday.
“But I think we hould be able to recover in the next three quarters, also with price increases so we can pass on the increases in our costs,” he added.
Alejo said four new feed mills will open this year. Purefoods has also built a new hotdog factory in Cavite, the first phase of which started operating in April and boosted capacity by 50 percent.
Purefoods has also built a new hotdog factory in Laguna, the first phase of which started operating in April and boosted capacity by 50 percent. The next phase will further increase capacity by 50 percent by next year, thereby effectively doubling Purefoods’ capacity.
“Given the new capacity we should be able to supply the demand in the Visayas and Mindanao, which is quite huge (area), and you know the country’s growth is also being experienced in the south. We’d like to take advantage of that opportunity in meeting the demand. That’s why we’re also building feed mill,” Alejo said.
For the flour business, Alejo said capacity would likewise be doubled.
Purefoods also plans to expand its poultry processing plants.
“In addition, we have ready-to-eat plant which will allow us to produce viands that we can supply to many food service accounts and also convenience stores and supermarkets,” Alejo said.
“If you look at developed countries, there’s a preponderance of ready-to-eat (meals) because people are now looking for convenience. With all these condominiums, single-living homes, they don’t want to cook anymore. They just want to buy but those products must be very good, similar to something that you cook at home,” Alejo said.—DORIS DUMLAO-ABADILLA