Tanduay targets US market

Tanduay Holdings Inc., an alcoholic beverage firm led by tycoon Lucio Tan, is making plans to venture into the United States market to grab a share of the latter’s growing base of rum consumers.

Tanduay managing director Wilson Young said in a briefing Wednesday that the company would like to bring new products to the US to take advantage of the good pricing of rum there. The strategy would be to establish a distribution capability in the US while still keeping the manufacturing hub in the Philippines.

For now, however, the strategy was to leverage on Tanduay’s “long history and exotic Pacific heritage to position the brand and company” by bringing rums that meet international standards. Apart from being the No. 1 rum producer in the Philippines, Tanduay is the second-biggest rum maker in the world by volume next to Bacardi.

Young said rum was a high-value but low-volume business in America. “In good times and bad times, consumption of rum in the US has been increasing in the last two years,” Young said.

Tanduay chief finance officer Nestor Mendones said that once Tanduay’s foray into new markets gains traction, the company would be open to building new manufacturing capability elsewhere in the world like China.

Another advantage cited by Tanduay in support of its expansion to new markets overseas was its access to high-quality cane and molasses in this side of the world through Victorias Milling Corp., which is under the Tan group of companies.

Tanduay is preparing for a transaction that will widen its public float by 11 percentage points to more than 12 percent through the issuance of 398.14 million shares.

Among the company’s propositions to investors are sustained annual sales growth of 9 percent and stable market share of 34 percent of the alcohol market. It has a dominant position in the Visayas-Mindanao region with a 77-percent market share.

Tanduay’s majority shareholder Tangent Holdings—controlled by the Lucio Tan group—agreed to implement an equity place-out scheme wherein Tangent would offer secondary shares to the public.