Iligan City—Pilmico Foods Corp. (Pilmico), the food subsidiary of listed conglomerate Aboitiz Equity Ventures Inc. (AEV), said on Monday it is planning to expand its flour ship-ments to countries in Asean.
The company has set its sights on hiking exports as stiffer competition in the domestic market is making it more difficult to boost its income.
“We cannot grow further here in the Philippines because the local volume is being eaten up by imported flour and they [foreign players] are also building their own flour mills in the Philippines,” company Vice President for Operations Florencio Sebandal told reporters in an interview.
Sebandal said two foreign milling companies would set up shop in Luzon and the Visayas. He did not provide more details. What’s making it more difficult for Pilmico to expand domestic sales, he said, is the preference of local buyers for imported flour.
“[Foreign flour] is cheaper by P100 per bag and, quality-wise, it is better,” Sebandal said.
The Pilmico official expressed optimism that exports would increase next after the construction of the P200-million packing-line plant is completed. The packing-line plant is expected to increase flour production for exports to around 4,000 metric tons (MT) per month from the current 2,000 MT.
“This will boost our export production because we will now have a facility dedicated for our export market,” Sebandal said.
Pilmico exports flour to Hong Kong, Indonesia, Vietnam, Myanmar and Thailand. The company said demand for flour in these countries could grow due to the projected increase in the bread and pastry
consumption in the region.
Sebandal, however, said stringent measures being imposed by importing countries are preventing the company from expanding its flour shipments.
“Before we can export we have to go through many processes to acquire permits. One is we have to be Halal-certified, wherein the certification is done per product or brand not per company,” he added.
Sebandal said the bulk of Pilmico’s flour production goes to Mindanao, while 30 percent is shipped to Luzon.
The company official also disclosed that Pilmico will start its first export venture for fowl and poultry feeds to Indonesia before the end of the year. On a monthly basis, Pilmico produces around 23,000 MT of animal feeds, Sebandal said.
Currently, the company has four plants: one flour-milling plant, which is located here; two animal feeds plants in Iligan and Tarlac; and one aquaculture-feeds plant in Vietnam.
Pilmico’s bottom-line for the first half remained flat at P885 million, according to the latest disclosure of AEV. Pilmico’s net income in the first quarter declined by 6 percent to P389 million, from P429 million a year ago.