URC eyes venture with Japan’s largest snack food company

Screengrab from https://www2.urc.com.ph/

Manila, Philippines–Gokongwei-led Universal Robina Corp. is in talks to set up a local manufacturing joint venture with Japan’s largest snack food company Calbee Inc.

In a recent press statement in Tokyo, Calbee said it had decided to establish a joint venture company with URC to grow its market share in the Philippines, which it described as “one of the promising snack foods markets.”

The joint venture firm will be called Calbee-URC Inc., which will be 50-50 percent owned by URC and Calbee and will have an initial capital of P600 million. The target is to set up the joint venture by April this year.

URC, for its part, said in a disclosure posted on the Philippine Stock Exchange on Monday that details of the joint venture and other specific agreements were still under discussion.

“Both parties aim to come to a definitive agreement by the second quarter of 2014,” URC said.

Tokyo-based Calbee is the largest snack food company in Japan, with 2013 sales of over 179.4 billion Japanese yen and a dominant 52.3 percent share of the Japanese snack food market.

The joint venture will be based in Pasig City, Philippines, and will have the manufacture and sale of snack foods as its main business.

The joint venture is planned to be a consolidated subsidiary of Calbee during the fiscal year ending March 31, 2015.

“We aim to achieve four billion yen of annual net sales within six years of business commencement. We believe the joint venture will contribute to Calbee’s medium to long-term business performance,” Calbee said.

Outside of Japan, Calbee has existing operations in Thailand, Singapore, Hong Kong, Taiwan, China, Korea, USA and Canada.

URC grew its net profit in fiscal year 2013 ending September by 29.4 percent year-on-year to P10.04 billion on higher earnings from branded consumer foods, agro-industrial and commodities businesses. Cash flow for the fiscal year as measured by earnings before interest, taxes, depreciation and amortization expanded by 23.4 percent to P13.9 billion from the level a year ago.