Universal Robina Corp., the biggest snack food maker, said it will merge with wholly-owned plastic packaging supplier CFC Clubhouse Property Inc.
URC said in a disclosure to the stock exchange its board approved the merger with CFC Clubhouse with the former emerging as the surviving entity.
“The proposed merger is expected to benefit URC in the reduction of expenses through the economies of scale, centralized administration and greater efficiency,” URC said.
CFC Clubhouse is one of the major suppliers of flexible packaging materials for URC’s snacks and beverages division.
With an authorised capital stock of P500 million, CFC Clubhouse started commercial production in April 2007. Its manufacturing plant in Batangas has an annual rated capacity of 12,000 tons producing various packaging material combinations,
The company is currently expanding its capacity to accommodate an increase in URC’s demand for dry laminated and extruded wrappers.
The company by October this year will commission a new production plant with an annual capacity of 12,000 tons. It aims to be the leading manufacturer of packaging materials in the region.
URC, a unit of JG Summit Holdings Inc. of tycoon John Gokongwei, is one of the largest branded consumer food and beverage product companies in the Philippines and has a significant and growing presence in the Asean markets.
It is engaged in a wide range of food-related businesses, including the manufacture and distribution of branded consumer foods. It is also in sugar and flour milling and refining and in agro industrial businesses of farms, mainly hogs and animal feed milling and related products.
URC increased its net income by 12.5 percent to P3.21 billion in the first quarter of its fiscal year covering the period October-December 2014 from P2.86 billion year-on-year.
First quarter consolidated sale of goods and services increased 18.7 percent to P26.95 billion from P22.7 billion on strong sales of branded consumer foods, both in the domestic and international markets.
For its fiscal year 2015.
URC expects a 20 percent revenue growth this year on the sustained growth of the branded food business. It closed unchanged Wednesday at P215 per share.
The company earlier said it was spending P9 billion this year to expand domestic and international businesses. The capital expenditures is higher than the previous year’s P7.7 billion.
URC said it would allot P6.5 billion for installation of new lines to expand capacities in the snackfoods and beverage businesses in the Philippines, new lines for beverage, snacks and candy products in Vietnam and expansion of wafer and snack lines in Thailand and Indonesia.