Listed AgriNurture Inc. is set to stop supplying fresh fruits and vegetables to supermarkets of the SM Group to free up resources that could be used for expansion.
In a disclosure to the Philippine Stock Exchange, ANI said it would pull out products from SM Supermarkets by October 26 and SM Hypermarkets by October 31.
The end of the two-decade supply relationship with the supermarket chains of the SM Group is expected to free up at least P60 million in working capital, ANI said in the disclosure.
“That’s just the initial estimate on receivables. Including logistics and other resources used to serve the SM supermarket chain, the amount involved could be a few hundred million pesos,” ANI chairman and CEO Antonio L. Tiu said in a phone interview.
Shifting resources to expansion programs—such as more aggressive farming, acquisition and store-opening strategies—may have “only a small positive effect” on the company’s income for the rest of 2012, ANI said. The full impact would be felt in 2013, it said.
The agribusiness firm’s farm-to-plate model is in for a “very handsome growth” with a larger product lines and exports base, ANI said.