Gokongwei's URC expanding in Burma

By Zinnia B. Dela Peña, The Philippine Star

Posted at Apr 19 2012 07:46 AM | Updated as of Apr 19 2012 09:17 PM

MANILA, Philippines - Universal Robina Corp. (URC), the food manufacturing arm of taipan John Gokongwei’s listed flagship firm JG Summit Holdings Inc., is expanding in Burma as it hopes to further strengthen its operations in Southeast Asia.

In an interview with reporters following the company’s annual stockholders meeting yesterday, URC president Lance Gokongwei said they are in the process of incorporating a company in Burma but declined to give more details on the planned venture.

“We will disclose at the appropriate time,” Gokongwei said.

URC has earmarked around P5.2 billion for its capital expenditure program this year, 14 percent higher than the P4.56 billion spent last year. Majority of the capital budget, or 80 percent, will be used for the continued expansion of its branded consumer foods segment operations - primarily snack foods production facilities in the Philippines and biscuit production facilities in Thailand and Vietnam.

The balance of 20 percent will be used to fund its diversification into fuel ethanol development.

Bioethanol is a form of renewable energy intended to provide a more environmentally and economically friendly alternative fossil fuels such as diesel and gasoline. It can be made from very common crops such as sugar cane, potato and corn.

Gokongwei said the bioethanol plant in Negros Occidental will have a production capacity of 100,000 liters of ethanol and require an investment of around P27 million.

Among URC’s growth plans this year is to expand the production and distribution of its branded consumer food products overseas through the addition of manufacturing facilities located in geographically desirable areas, specially in ASEAN countries.

It is also planning to achieve this through the realignment of the production to take advantage of markets that are more efficient for production and sourcing of raw materials, and increased focus and support for exports to other markets from these manufacturing facilities.

URC said it also intends to enter into alliances with local raw material suppliers and distributors in these countries.

Gokongwei said URC hopes to grow its international business so that it will be the same size as its local business in the next five years.