|
AS other
businesses grapple with the soaring cost of food and
fuel, the Philippines’ bet for the World Entrepreneur of
the Year Awards in
Monte Carlo
says it is fortuitous they are in the dairy business.
Alaska
Milk Corp. president and chief executive Wilfred Steven
Uytengsu Jr. spoke to the BusinessMirror after a
cocktail reception held before he goes to Monte Carlo to
represent the Philippines in accounting firm Ernst &
Young’s World Entrepreneur of the Year Awards on May 31.
He vies against representatives of 44 countries.
Uytengsu
said “the concern over sustainability of food must lead
to a review of sources of energy.”
Saying
he frowns on an indiscriminate use of biofuels as energy
source, Uytengsu said countries like the United States
should review their strategy of tapping corn for
ethanol. “This is a basic commodity that could be wisely
used for food production than energy.”
The use
of such commodities has skewed supplies and is driving
prices up, especially for raw materials used to raise
livestock from where such consumer products as milk are
produced, Uytengsu added.
A Food
and Agriculture Organization (FAO) paper released in
February this year said that agricultural commodity
prices began rising sharply in 2006, led by dairy,
“which on average increased by nearly 80 percent.”
The
report titled “Growing demand on agriculture and rising
prices of commodities,” said that on the demand side,
the emerging biofuels market which uses sugar, maize,
cassava, oilseeds, and palm oil among others, has added
to the upward pressure. “These commodities, which have
predominantly been used as food, are now being grown as
feedstock for producing biofuels.”
Likewise, the report cited a changing structure of
demand, mainly, that “diversifying diets” also add to
the higher commodity prices. This, the United Nations
agency said, is characterized by people “moving away
from starchy foods towards more meat and dairy products,
which is intensifying demand for feed grains and
strengthening the linkages between different food
commodities.”
Alaska
Milk apparently benefited from such situation, based on
its report submitted to the Philippine Stock Exchange
that showed its full-year net income rose 65 percent to
P663 million in 2007 from P402 million in 2006.
“Revenues for the year surged 53 percent to P9.08
billion from P5.92 billion a year ago, buoyed by the
strong performance of the company’s core milk products,”
a statement of the publicly-listed firm said.
But the
company’s cost of sales and operating expenses for the
year also doubled to P8.13 billion last year from the
amount in 2006. “Increased sales volume, combined with
the higher cost of production inputs, skimmed milk
powder in particular, pushed cost of sales higher
year-on-year.”
Uytengsu
said they are not unconcerned about the difficulties of
people, and so “we are trying to mitigate the impact of
high food prices on consumers.”
He vowed
to keep balancing shareholder interest, that is, the
company’s bottom line, and the interest of
price-sensitive consumers. “I think this balancing act
remains a core challenge for many entrepreneurs today.”
|
