Century Pacific Food Corp., the largest producer of canned foods in the Philippines, said Tuesday it will allocate P1.5 billion to P1.8 billion for 2018 capital expenditures to expand its tuna processing facility and introduce new products in the market.
CNPF president Christopher Po said in an interview following the company’s annual stockholders meeting the current tuna and tin can manufacturing facilities were about to hit full capacities as sales growth remained at double-digit.
“Vast majority of our capital expenditures will be for capacity expansion. In 2017, we were going more than 20 percent and we continue to grow at that pace now. So some of our factories are hitting their capacities. So we need to expand the capacity of our plants,” Po said.
The planned expansion of the company’s tuna production facility in General Santos City will add another 50 to 100 metric tons of tuna per day.
“The expansion will satisfy our tuna requirements for the next three to five years,” Po said.
The CNPF’s tuna facility currently has a daily production capacity of 300 to 350 MT. The plant expansion is slated for completion by the third quarter of 2019.
Po said that for 2018, the company expected a mid-single digit growth in net income, on rising cost pressures brought about by increasing fuel costs, higher cost of raw materials, and depreciation of the peso against the US dollar.
“All these are cost pressures that we will have to manage. We will find ways to be more efficient but at the same time pass on these cost pressures to consumers,” Po said.
Sales revenues are expected to grow by “mid-teens”, he said.
Meanwhile, Po said the company was not practicing “endo” or illegal contractualization of workers.
“We don’t practice endo. But we do subcontract some parts of our operations. We do subcontract or outsource this to legitimate cooperatives and outsource companies,” Po said.
“We are outsourcing some of our operations. This is due to our desire for flexibility. There are parts of the year when business is less busy and certain times of the year when business gets busier,” he said.
Po said the company was in discussion with the Labor Department on what percentage of the workforce should be a regular part of the company or which can be outsourced.
“We are pretty confident we can come up with a win-win type of arrangement. But even if we do regularize, we think this will not affect our margins that much,” Po said.