Poll spending seen to boost Tanduay’s sales
Lucio Tan’s Tanduay Holdings Inc., the publicly listed parent of liquor manufacturer Tanduay Distillers, sees flat growth in profits this year to match last year’s strong performance.
“We expect to end the year flat,” Tanduay president and CEO Wilson T. Young told reporters at the sidelines of the company’s annual shareholders’ meeting on Friday.
Last year, Tanduay’s profit nearly doubled to P1.1 billion, bucking a slowdown in the domestic economy, as the company launched new product lines. This year, however, the company has not performed as well.
In the January to March period, Tanduay posted a net income of P207 million, down 5 percent from year-ago levels.
Young said the company hoped to reverse its fortunes through the introduction of more brands. Tanduay started 2012 with four new product lines that were not present in January of 2011. These were Boracay flavored rum, Tanduay Light, Mardi Gras and ready-mixed cocktail drinks.
The company has said it expected that sales would improve starting this month—the unofficial start of the 2013 election campaign season—a time characterized by heavy spending by politicians seeking office.
“Historically, the campaign really starts in July. Sales should bounce back,” Young said earlier this year.
Tanduay owns two of the largest distillery firms in the country – Asian Alcohol in the Visayas and Absolut Distillers in Luzon.
Meanwhile, Tanduay’s shareholders approved on Friday the infusion of P5 billion in fresh capital from Tangent Holdings, the company’s parent firm. Tanduay’s authorized capital stock will be increased to P25 billion, broken down to shares worth P1 each, to make way for the new funds.
The company earlier said it had earmarked P1 billion for capital expenditure this year, up by more than two-thirds from the P600 million spent last year.
The bulk of the outlay would be spent on efforts to increase the production capacity of Tanduay’s distillery in Lian, Batangas.
He said this was part of a three-year, P2-billion expansion program that started last year. Paolo G. Montecillo
