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Business

Universal Robina expanding production to Myanmar, Vietnam

MANILA -- Universal Robina is building more facilities outside the Philippines as the company readies itself for next year's regional economic integration.

     The company, a leading food and beverage manufacturer in the Philippines, is set to open its first plant in Myanmar and a third in Vietnam before the end of the year. The Vietnam facility will produce creamer and coffee. 

     Universal Robina has bolstered its capital expenditure to $200 million for 2014, up from $135 million last year to partly bankroll the expansion, President and Chief Executive Officer Lance Gokongwei told reporters after the company's stockholders meeting late Monday.

New markets

Myanmar is the newest market under Universal Robina's regional portfolio, which already includes Vietnam, Thailand, Indonesia, Malaysia, Singapore, as well as Hong Kong and China. The Myanmar location will be a biscuit and confectionery facility.

     Gokongwei said the company is considering a manufacturing plant in Cambodia, where it already has a distribution network. However, the CEO said Robina has yet to fully complete its pan-Asean expansion, which does not yet include Laos and Brunei.

     "Our geographical footprint is almost complete," said Gokongwei. "But within each country, we have many opportunities to increase the sales of whatever products they are selling."

     "I think it is an opportunity for URC because we are one of the few companies in Asean [that already have] a footprint in Asean," Gokongwei said.

     "So we will be in a position to take advantage of whatever, in case opportunities arrive -- whether it will be reduction in tariff, free movements of goods and services, or standardization of regulations," he added. "I think that would benefit companies like us, which are already regional players."

Reducing dependency

Universal Robina's expansion into new frontiers also comes amid risks of slowing growth in other markets. In his presentation to shareholders, Gokongwei noted the weak macroeconomic situation in Thailand. In Indonesia, Universal Robina has stopped selling its flavored drink brand C2 due to intense competition there.

     "We would like to reduce dependency on a single brand or geography -- that is always our strategy," said the CEO. According to him, Universal Robina's international business is largely Thailand and Vietnam, comprising a quarter of the company's total revenue.

     In the first half of fiscal 2014 for Universal Robina, ending March, its net income climbed 14.4% to 6.22 billion pesos ($142 million) while net sales rose 13.5% to 45.74 billion pesos driven by its branded consumer food group.

     At home, Universal Robina enjoys the number one market share in snacks, candies, chocolates, canned beans, and ready to drink tea segments. The company holds the number two market position in the cup noodle and instant coffee sectors.

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