San Miguel Pure Foods Co . Inc., the processed meat and poultry unit of conglomerate San Miguel Corp., said Thursday that it plans to spend 3 billion pesos (€6.5million) to expand its facilities this year, optimistic of its growth prospects despite a soft market in the first quarter.
Pure Foods President Enrique Gomez said the expansion involves doubling its meat-processing capacity from the current 140 metric tons a day and building a new flour plant.
He said the company is building up its product portfolio to offer consumers a wider range of food products, and has drawn up a plan to enter the lucrative animal feed and nutrition supplement markets.
Pure Foods will also invest more in its food catering operations, a fast- growing industry segment.
However, Gomez said, while most of its businesses didn't suffer any slackening in sales volume in the first quarter, operating income declined despite coming in 11 per cent above the company's target. He didn't provide any exact figures.
Pure Foods is likely to report its first-quarter results within the next two weeks.
In the year-ago quarter, Pure Foods posted a net profit of PHP183.5 million on an operating income of PHP389.9 million and net sales of PHP3.5 billion.
Gomez said the continued softness of poultry prices that set in late last year has hurt the company's first-quarter earnings.
Gomez remains optimistic, however, of the outlook for the rest of the year, as Pure Foods will be able to trim costs and step up productivity following its merger with San Miguel's food division. San Miguel acquired Pure Foods from Ayala Corp. in May last year.
"We have been laying the groundwork for an integrated approach in our market and brand positioning, facilities and operations, and selling and distribution networks," Gomez told shareholders Thursday.
"Because while both San Miguel and Pure Foods bring their respective strengths into play, the real value lies in the inherent synergies among our businesses," he added.