URC to build P1-B Vita Soy facility

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By Arra B. Francia, Reporter

UNIVERSAL ROBINA Corp. (URC) is investing around P1 billion to build a new facility that will locally produce its Vita Soy drinks, its chairman said.

URC Chairman Lance Y. Gokongwei said on Wednesday the company is currently developing a production facility for Vita Soy in Pampanga. At present, Vita Soy products are imported.

“We have a new factory for Vita Soy being constructed in Pampanga as we speak. Everything is imported because it takes time to build,” Mr. Gokongwei told reporters after the company’s annual shareholders’ meeting in Ortigas Center yesterday.

The Gokongwei-led food and beverage firm introduced the Vita Soy brand in the Philippines last year in partnership with Hong Kong-based Vitasoy International Holdings to “address trends in health and functionality.” Vita Soy is also present in Hong Kong, China, and Australia. The company said it has so far cornered 13% in value market share in the Philippines.

The factory is scheduled to be operational by 2019.

URC’s newly appointed President and CEO Irwin C. Lee said the company will focus on stabilizing the coffee business this year, after its market share dropped to 26% in 2017 from 30% previously.

“That’s where we’re focusing our efforts. We’re working quite fast to see what we can do to stabilize that. If we can stabilize the coffee business, and all the other businesses are on growth, that’s where (the growth) will come,” Mr. Lee told reporters.

The coffee business, which includes Great Taste and Blend 45 brands, is part of URC’s branded consumer foods unit.

The lower volumes and unfavorable mix in the coffee business weighed on the company’s EBITDA margins last year, dropping by 203 basis points to 12% against the year before. URC’s net income for the year also went down by 15% to P11.2 billion.

Other URC branded consumer foods maintained their dominant position in the market, namely snacks, candies, chocolates, biscuits, ready to drink tea, and cup noodles, according to data from AC Nielsen as cited by the company. Among its brands include C2, Chippy, Piattos, Nissin and Cloud Nine.

Meanwhile, URC has allotted P8 billion in capital expenditures this year. The bulk of 70% will allocated for the Philippines, with the rest for the expansion of its international operations.

“We’re adding snack lines in Australia and some additional confectionary lines in Malaysia,” Mr. Gokongwei said.

URC’s net income slipped 12% to P3 billion in the first quarter of 2018, amid a 2% increase in sales to P31.2 billion. Mr. Gokongwei said URC aims to sustain its sales growth for the rest of the year.

“We still expect sales growth especially in the second half, hopefully we’re pivoting for growth towards the coming years,” Mr. Gokongwei said.

Shares in URC lost 70 centavos or 0.53% to close at P131.30 each at the stock exchange on Wednesday.