MANILA, Philippines — Century Pacific Food Inc. (CNPF), the listed food and beverage firm of the Po family, is hiking its capital spending this year to fund capacity expansion projects to support the company’s double-digit growth target for the year.
CNPF president and CEO Teodoro Po said the company has earmarked a capital expenditures budget of around P4 billion to P5 billion for 2024, higher than last year’s P3.5 billion.
Po said about half of the amount would be used to increase the company’s coconut processing capacity.
“We are in the mid-stages of completing our expansion of our coconut processing capacity because we’ve been getting more and more demand from our principals in the US and in Southeast Asia. This latest capex will roughly increase our capacity by about 25 percent. But this is just the first stage of the expansion and if market trends continue, we expect that we will basically end up in five or seven years from now we expect to be double of our current capacity, which is pretty significant,” he said in a briefing yesterday.
According to Po, the other half will be used for maintenance and cost improvement.
“There’s also some capacity expansion happening in other parts of our company that will require capex but to a smaller extent than the coconut business. And lastly, there are special efficiency and the environmental sustainability projects that we also budget some capex for,” he said.
CNPF was off to a good start in 2024 as it reported a net income of P1.7 billion in the first quarter, 15 percent higher year-on-year as consolidated sales reached P18.2 billion.
Po said the company remains cautiously optimistic moving forward because of some challenges on the horizon, such as inflation that continues to linger in the Philippine market.
“The consumer weakness is still very much felt by our business. There are some challenges that are appearing in the second quarter, mainly, the freight rates, which have been inching up, will affect both our export side and our import side for raw materials. But we are cautiously optimistic that we might be able to weather this challenge if the freight rate increases turn out to be temporary and transient rather than permanent. So we’re observing and still watching for these cost pressures,” he said
CNPF executive chairman Christopher Po, however, said the company is currently on track to end the year with low double-digit growth for both its top line and bottomline.
“Despite the ongoing inflationary environment and uncertainties it brings, particularly on the consumer side, our quest for profitable growth remains steadfast. We aspire to achieve low double-digit growth in both our top and bottom lines this year to be supported by our resilient branded business and a recovering OEM (original equipment manufacturer) segment,” he said.
Po said CNPF targets to grow its revenues and profits by approximately 10 to 15 percent every year.
“This is twice the pace of our nation’s GDP growth. A rate that will double the business every five to seven years. This ambition is supported by key strategic pillars: strengthen the core, diversify the portfolio, drive innovation and embrace sustainability,” he said.
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