PASIG CITY Philippines — Universal Robina Corp. is targeting higher exports of its snack foods and beverages to the U.S. and Micronesia next year company executives said.
This developed as sales of its branded consumer food segment in the international market rose by 18% to 5.8 billion pesos [$116 million] in the nine months ending June 30 according to the company’s financial disclosure to the Philippine Stock Exchange. The growth in its international sales outpaced the 14% rise in domestic sales.
URC the food and beverage unit of JG Summit Holdings Inc. — largely owned by the family of retired Filipino-Chinese tycoon John Gokongwei — also recorded brisk sales of its green tea drink called C2 on Guam Lance Y. Gokongwei said president and chief operating officer of URC. URC executives claim that C2 packaged in polyethelene bottles now "outsells Coke" in the Philippines.
URC sells assorted snacks candies biscuits and instant noodles to Micronesia [including Guam] and the U.S. while its C2 [plain lemon apple peach all in 500 mL. bottles] is exported only to Guam. The company declined to reveal its sales figures in the U.S.
"We’re targeting 35% growth [in exports to the U.S.] versus overall [exports] growth of 20% " Audie Ugalino said export director of URC. "Direct exports growth" to Micronesia [Guam and Saipan] is seen at about 20%. "Note that parallel exporters can also bring products there " he added.
"2006 posted the highest sales for Guam and Saipan since we started the business there [we shipped more than 15 containers each with more than 20 000 cases of snack foods and C2] … we intend to grow the business this year by launching other C2 variants and other new beverages [Rush Nature’s Harvest] " Ugalino said. Rush is a fitness drink while Nature’s Harvest is a juice drink.
Exports to the U.S. are mostly snack foods such as Chippy [corn chips] and Piattos [potato chips] Payless instant noodles and Magic Flakes crackers. These products are sold mainly by big wholesalers and retailers which operate the most popular Asian supermarkets in the U.S. like Seafood City Hongkong Supermarkets 99 Ranch; as well as "agents for dollar stores " Ugalino said. Almost all URC products comply with the strict requirements of the U.S. Food and Drug Administration.
While he could not reveal actual sales and growth figures Ugalino said the company has a "bigger target for the U.S. market [next year] relative to total growth as we embark on our strategies to bring URC products that hopefully would cater to the mainstream market."
URC’s Micronesian business is still more on trading except for its Guam beverage export business with Market Wholesale a big distributor on Guam. Snack foods are shipped to Saipan via consolidators — Arkoe Trading DMC Enterprise and Fortune Traders.
URC has been selling snack foods to Guam and Micronesia for "more than five years " while its exports of C2 to Guam only began in fiscal 2006 said Ugalino. URC’s 2006 fiscal year began in October 2005 and ended in September 2006. Exports to the U.S. began sometime after 1998.
More foreigners are now patronizing URC’s food products he added thereby boosting the company’s overall exports. "Our biggest export market right now is Japan where we enjoy good sales of Magic Flakes Peanut Butter [sandwich]. This makes East Asia [including Taiwan and Korea] our biggest regional market. The Middle East follows where we enjoy good sales of our snack chips [Chippy Piattos Roller Coaster]. Next is North America [U.S. Canada and Puerto Rico]. For both East Asia and the Middle East we already accomplished ‘crossing over’ from the Filipino market to the mainstream markets. Meaning more Japanese Koreans Taiwanese and Middle East locals patronize our products more than the Filipinos there. In the U.S. and Canada our customer is still predominantly Filipinos and Asians."
While the Micronesian market is still lower than 5% Ugalino said it is "considered a high growth potential due to accessibility high per capita income [therefore high per capita consumption] and the seeming similarity in consumer taste and preferences." There is also a growing number of Filipinos living and working in Guam and Saipan. At present Filipinos comprise about 30% of the Micronesian population.
Gokongwei meanwhile said his company is opening another plant in Calamba Laguna to increase the production of the C2 beverage to 10 million bottles a month from the present 9 million bottles.
URC was founded in 1954 by John Gokongwei and is one of the largest food companies in the Philippines. In a report submitted to the Philippine Stock Exchange the company said profits fell by 13% to 1.55 billion pesos [$31 million] in the period October 2005 to June 30 owing to a decline in yields on market investments and securities. If it were not for these "unrealized losses" amounting to 657 million pesos [$13.14 million] profits would have increased by 24% compared to the same period in fiscal 2005 the company said.
Net sales however were up 15.41% to 26.04 billion pesos [$521 million] in the nine months ending June 30 2006 on the back of the strong performance of the branded consumer foods segment [snack foods and beverages]. The segment accounted for 72% of total sales. International sales of snacks and beverages represented 22% of the total amount as of June 30. Higher sales of snack foods were posted particularly in Thailand Malaysia China and Vietnam the company said.
Stock market analysts see a rebound in URC profits next year with the nationwide congressional elections projected to boost consumer spending. URC is a publicly listed company. MBJ