Big firms pursuing deals for food industry consolidation

Bicol Express is one of several canned Moondish Foods products. Splash Corp. completed on Monday, Oct. 1, 2012, the acquisition of Moondish Foods, a Taguig-based manufacturing company that produces canned ready-to-eat Filipino food. PHOTO FROM MOONDISHFOODS.COM

MANILA, Philippines—Consolidation is looming within the food industry due to a strong local consumer sector.

Splash Corp., through its food unit, completed on Monday the acquisition of Moondish Foods, a Taguig-based manufacturing company that produces canned ready-to-eat Filipino food such as Laing (taro leaves in coconut cream), Bicol Express, Ginataang Ampalaya and Ginataang Puso ng Saging.

On the other hand, RFM reaffirmed talks with various groups on the possible sale of or joint venture with its Swift meat group. It said it has been talking with several parties, among them the Century Canning Corp. “But we have yet to finalize certain terms and conditions and we have not signed any definitive agreement on the matter,” the company said in its disclosure said.

Meanwhile, the San Miguel group has revived plans to sell a significant minority stake in food unit San Miguel Pure Foods Co. Inc.

On the deal closed by Splash, it was earlier disclosed that the maximum acquisition cost of Moondish would be P33 million. Started by Jun and Ana Manrique in Las Piñas City in 1999, the company has received assistance from the Department of Science and Technology for the development of its products.

Splash also earlier acquired 80 percent of Barrio Fiesta Manufacturing Corp. for P472 million. The acquisition does not include the Barrio Fiesta chain of restaurants.

The acquisitions are in line with Splash’s bid to be a major player in the food industry.

On RFM, the meat division that is the subject of discussions with prospective investors is not the publicly listed Swift Foods Inc., which produces and sells poultry products, namely live and dressed/processed chicken. It is a unit within RFM itself that produces the Swift-branded meat products like hotdog, luncheon meat, ham and bacon.

It has been reported that RFM is open to getting either a strategic partner for a joint venture or selling this business depending on how attractive the offer was. Given the recent interest in consumer businesses in the country that allowed the Uytengsu family to unlock good value out of Alaska Milk, consumer-oriented firms have become attractive to new investors.