Pasig–(PHStocks)–After a record year that saw its revenues rise 13% to P89.6 billion from P79.3 billion in 2010, San Miguel Pure Foods Co. Inc. (PSE: PF), the food unit of diversified conglomerate San Miguel Corp. (PSE: SMC), is gearing up for higher growth.
At the company’s annual stockholders’ meeting, SMPFC Chairman Eduardo M. Cojuangco Jr. said that its performance last year created a strong platform for future growth, and that the challenge was not only how to sustain it, but how to accelerate it.
Cojuangco bared the major initiatives the company embarked on in the first quarter of 2012 to support the company’s long-term growth.
The company, he said, had broken ground for a new grains terminal it plans to put up in Mabini, Batangas. The new terminal is currently in the preparatory stages of construction, he said.
“We expect it to be operational by the third quarter of 2013. This terminal is designed to accommodate larger vessels which would reduce our freight costs,” he added.
Cojuangco also said that the company is expanding operations in its General Trias, Cavite plant, where a second nuggets line is being constructed. The capacity expansion is a result of increased market demand for nuggets and related products.
Construction of the new line is already halfway done and it is expected to be operational by third quarter of 2012, he said.
In 2011, SMPFC reported record operating income and net income of P6.1 billion and P4.2 billion respectively, both up 4 % from the previous year, on the back of improved margins in its value-added meats segment, the launch of new products, and the expansions of retail outlets and distribution networks.
Cojuangco noted that programs that were being implemented for the past several years were key to its good performance, including a deliberate shift from basic commodities to stable-priced and profitable value-added products.
Its agro-industrial cluster and flour business enjoyed a combined 10% revenue growth, driven by an 8% volume increase in Poultry and Meats.
This was attributed in part to the opening of over 260 new Monterey Meat Shops and Magnolia Chicken Stations in 2011, bringing the 2011 year-end total to 979 outlets.
The company likewise benefitted from synergies with Petron Corp. as its distribution network was augmented with the acquisition of Treats convenience stores. It also launched several new products under its value-added meats and dairy segments.
International operations also grew their revenues by 118%, boosted by the full integration of its Vietnam business acquisition.
SMPFC sustained its revenue growth in the first quarter of the year but recent spikes in raw material prices in its commodity businesses have affected first quarter profitability.
“We expect the rest of 2012 to be filled with challenges. Yet we remain confident and excited as we hurdle these. We will not lose sight of the big opportunities available to our company,” Cojuangco said.