Gardenia expects P8B in sales in 2019

Leading bread manufacturer Gardenia Bakeries targets to cash in close to P8 billion worth of sales this year as the company inaugurated its most advanced breadmaking facility yet.

Company president Simplicio Umali Jr. said Gardenia made about P6.8 billion worth of sales last year.

“We hope to close the year with P8 billion in terms of sales,” he said. To reach P8 billion, the company has to grow at least 18 percent this year.

Gardenia inaugurated its second-largest manufacturing facility in the country on Tuesday. The fully automated facility, which can produce 400,000 loaves and buns a day, is located in an industrial park in Mabalacat, Pampanga.

On the sidelines of the inauguration, Umali told reporters that the robust market demand prompted the company to fully use the plant’s capacity in one year, instead of three years as earlier expected.

This means the factory will have three shifts at the end of the year, with each shift having about 100 workers doing various jobs such as quality checks and distribution. For now, it is operating on one work shift.

At the full capacity of all its plants, the company can make 1.8 million loaves and buns. But while he said Gardenia has already cornered 60 percent of the market, he said it was getting “very small” profit margins.

He did not disclose figures, only attributing this to the high costs of its ingredients, which are mostly imported, as well as the inability of the market to absorb higher costs.

“You can’t price yourself too high because the market will not buy your product,” he said.

“In terms of profitability, it will still be very low. But we expect to recover this over time in the coming years because you have to recover first the investment in the factories,” he said.

Apart from the P2-billion plant in Pampanga, Gardenia opened another facility in Mindanao earlier this year, a P1-billion breadmaking plant that can produce 130,000 loaves and buns a day.

He said the investments in a new facility might take seven to eight years to recover.

Nevertheless, the company seeks to produce more of its NeuBake brand, which is geared toward the low income market, as more Filipinos buy bread.

There is a significant price difference between the Gardenia brand and the NeuBake brand. For example, a 450-gram NeuBake white bread costs P36, while its closest counterpart, the 600 gram Gardenia white bread, is nearly double that price.