Universal Robina Corp., the biggest snack food maker, said over the weekend it expects to generate P5 billion in savings over the next five years from the expanded and accelerated supply chain transformation.
URC said in an investors presentation it finalized a five-year roadmap that would enable the company to harvest P5 billion in savings.
It said the program, which relies on digital transformation, will be achieved by having lean manufacturing, production efficiencies and improved productivity from scale and shared services.
The program also aims to eliminate waste and optimize conversion and logistics costs.
URC piloted this supply chain savings program in 2019, with a target to generate P1 billion in savings over a period of three years. The company generated P200 million in savings in the first year.
URC initially implemented the program in its manufacturing facilities around the country. It recently expanded to other activity systems like formulation, packaging and logistics.
The company recorded net income of P11.2 billion in the first nine months of 2021, up 38 percent from the same period last year. The increase was driven by continuing benefits from the Comprehensive Recovery and Tax Incentives for Enterprises Act and gain on sale of idle land.
Nine-month sales inched up by 3 percent to P102.6 billion from P99.8 billion.
Operating income continued to be challenged by higher input costs and production inefficiencies brought about by COVID-related supply disruptions in several markets.
Higher pricing and cost savings initiatives helped reduce impact to margins.
URC reported last week it would buy 100 percent of Malaysian biscuits company Munchy Food Industries Inc. for P22.9 billion.
The deal is expected to beef up its presence in Southeast Asia.
The transaction was approved by the board of directors of both companies and is expected to close by December 2021, subject to conditions.