Century Pacific Food Inc., the listed food manufacturing business of the Po family, plans spending P3.5 billion this year, more than in past commitments as it explores opportunities for growth.
Christopher Po, Century Pacific chairman, said this was more than its usual capex of between P2 billion and P2.5 billion as the enterprise expands capacity, mainly in meat, pet food, coconut businesses, and others.
“All that means is we’re putting our shareholders’ capital to good use. We’re finding high returns on investment for these capital expenditures and that they should contribute to future growth in the coming years,” Po said.
He acknowledged there remains uncertainty in the market even as the company looks to a stronger second half performance and deliver double-digit revenue growth this year.
“Early indications show that in terms of top line, we’re still seeing resilient growth due to the performance of our branded businesses,” he noted.
He also said the recently announced minimum wage increase and lower inflation are favorable events for the business.
He looks forward to favorable profit outlook in the second half as cost pressures ease.
“Thus, were still expected to deliver a mid to high single digit bottom line growth for the year as most of the overhang inventory we carried over from last year have been consumed,” he said.
Gregory Banzon, Century Pacific chief operating officer, said the company is confident of double digit top line growth of around 10 percent to 11 percent, affirming previous guidance.
He said Century Pacific’s mid-market milk segment continues to gain market share.
“We continue to invest in the category to scale the business and look for whitespaces to end there within the powdered milk, either by leveraging on the Birch Tree brand and the Angel brand,” he said.
Century Pacific is sanguine on prospects of its coconut milk brand, Coco Mama, which likely posted a strong double-digit growth on the basis of higher penetration and wider distribution.
“The Philippines is a coconut eating country but 90 percent of households still use coconut culinary cream from scratch or piga. There’s still a huge opportunity to convert them into packaged coconut culinary producers and we continue to develop the market and innovate in this space,” he said.
