Century Tuna maker earmarks half of capex to coco biz
High demand from foreign customers has pushed the Po family’s Century Pacific Food Inc. (CNPF) to bet on the coconut business this year, beginning with the expansion of its processing facility in Mindanao.
The maker of Century Tuna, Argentina Corned Beef and Angel Evaporada has set a P5-billion capital expenditure (capex) this year, with half going to the coconut OEM (original equipment manufacturer) export business, according to CNPF vice chair, president and CEO Teodoro Po.
READ: Century Pacific defies inflation pressures, posts 15% profit growth
The remaining amount will go to maintenance and “cost improvement.”
“We’ve been getting more and more demand from our principals in the United States and in Southeast Asia,” Po said during a press briefing on Monday.
He added the P2.5-billion budget they set aside for the coconut business expansion would increase the processing facility’s capacity by about 25 percent.
Article continues after this advertisement“And if market trends continue … five or seven years from now, we expect to double our current capacity,” the executive noted.
Article continues after this advertisementCNPF’s coconut business is composed of various types of coconut-based products, including coconut water, desiccated coconut, virgin coconut oil, coconut flour and coconut milk.
Earlier this year, CNPF signed a long-term contract with global coconut water brand Vita Coco. The Po family-led firm will provide Vita Coco with coconut water supply over the next five to six years, CNPF chair Christopher Po said.
READ: Strong sales lift Century Pacific income by 12%
This will also entail a $40-million investment to ramp up coconut water production capacity to serve both the OEM business and domestic brand business Coco Mama.
Apart from making coconut-based products, CNPF also uses coconut shells as an alternative source of power for its processing facility.
“We likewise invested in biomass capabilities at our coconut facility,” Christopher said during CNPF’s annual stockholders meeting.
“By shifting from coal to coconut shells, we expect to reduce the coconut plant’s coal usage by at least 35 percent,” he added.
Biomass energy refers to energy harnessed from animals and plants, or in CNPF’s case, coconuts.
In the first quarter, the company booked a 15-percent surge in earnings to P1.72 billion on stronger sales despite sticky inflation. Revenues rose by 16 percent to P18.2 billion.
The OEM tuna and coconut export business registered a 49-percent growth in revenues. INQ
