By Vincent Mariel P. Galang, Reporter
GARDENIA Bakeries Philippines, Inc. is expecting stronger sales and volume growth this year, after it inaugurated its P2-billion bread manufacturing facility in Mabalacat City, Pampanga.
“Nationwide, we expect to grow by at least 25% (in volume and value), including Luzon with this factory. Because with Luzon, we’ve been here for 21 years, so we’ve been serving this market for quite some time but there are still areas that are not yet saturated so we are going to, susuyurin naming lahat ’yung [we will go to all] smaller markets,” Gardenia President Simplicio P. Umali, Jr. told reporters after the plant tour on Tuesday.
He mentioned Ifugao, Tabuk, and Mountain Province of the Cordillera Administrative Region (CAR) as areas where Gardenia will focus on increasing its presence.
The new facility can produce 400,000 loaves and buns a day, which Mr. Umali said will bring its total production to 1.8 million loaves and buns a day.
The new facility, which is Gardenia’s second largest after its Laguna plant, has production lines for white loaf, flavored loaf, bun and pandesal, and snack toast.
By the end of 2019, Mr. Umali said the company expects sales to reach P8 billion from about P7 billion in 2018.
“Profit-wise, in terms of profitability, it will still be very low because the margins that we are getting from bread are very low, but we expect to recover this over time… because you have to recover first the investment in the factories, and with this large investment… For us, any new factory takes about seven to eight years to recover the investment,” he added.
Gardenia is also targeting to increase the production of its low-priced brand NeuBake to 40% from 10%.
“As the market demand improves, we will expand. In fact, we intend to make that as much as 40% in the future because the low-income market is very large. We want to make this product available for them as a second brand,” Mr. Umali said.
“We think by next year, we could go to as much as 20%… probably in three years that could be 40%,” he explained.
NeuBake Bread is priced at about P40 per loaf, versus the Gardenia Classic White Bread priced at about P60 per loaf.
The Pampanga facility is the second fully automated bread plant that Gardenia has opened in the first half. It earlier inaugurated the bread manufacturing facility in Cagayan de Oro.
Mr. Umali said the company is planning further expansion, but declined to provide details.