Monde Nissin Corp. is increasing its 2023 capital expenditures by 67.5 percent to P7.42 billion from P4.43 billion in 2021 to expand the capacity of its Asia Pacific branded food and beverage business.
Monde Nissin chief finance officer Jesse Teo said in a news briefing the company would spend P6.05 billion for APAC-BFB, or nearly 200 percent higher than P2.06 billion it spent last year.
Teo said company is bullish on its APAC-BFB business on continued strong demand despite rising cost of raw materials.
“We are quite bullish on our capex projection for APAC. The volume momentum is there,” said Teo.
He said the company’s immediate priority is to build more production lines for its bakery business which is experiencing significant growth in demand.
Monde Nissin also budgeted P1.37 billion in capital expenditures for its struggling meat alternative business, down by 42.2 percent from P2.37 billion it spent in 2021.
Teo said the company set aside a modest capex for its meat alternative business which would mostly geared towards restructuring and cost-saving measures.
Monde Nissin is rechanneling most of its operating expenditures in its alternative meat business into capital expenditures for its APAC segment.
Monde Nissin booked P13 billion in losses in 2022 mainly due to a non-cash, non-operating impairment in the meat alternative business of P20.5 billion.
Monde Nissin chief executive Henry Soesanto said he is cautiously optimistic about the prospects of the company in 2023, given the recent decline in raw material prices
“We are almost at the end of the first quarter, during which we have seen a rather slow start for meat alternative, but strong topline growth in our APAC business to which we will accordingly redirect a significant proportion of our remaining IPO proceeds,” said Soesanto.
“This coupled with our expectations to benefit from lower commodity prices as the year progresses is giving us cautious optimism for both top and bottom-line growth this year,” he said.