La Tondeña bares growth initiatives

La Tondeña expressed confidence yesterday that it will be able to sustain its superior performance in 2001. This will be accomplished primarily through aggressive product development, strategic business acquisitions, and expansion of operations both in the domestic and regional markets.

La Tondeña chairman Eduardo Cojuangco Jr. said during the annual stockholders’ meeting that the impact of a strong balance sheet combined with renewed market opportunities presents a strong platform for growth. He explained that the sale of La Tondeña’s bottled water and juice operations to Coca Cola Bottlers Phil. (CCBPI) will provide the company with an even stronger balance sheet, allowing it to pare down debt and fully pursue business acquisition as a growth strategy. La Tondeña’s successful acquisition of Metro Bottled Water Corp. and Sugarland Beverage Corp. affirms its ability to identify and capitalize on such value-enhancing opportunities.

Cojuangco stated that the company is stronger today than it has ever been in its past 13 years. Last year, La Tondeña reported record revenues and income, bolstering the dramatic growth trend of the past three years. During this period, he said, net income grew steadily – 114 percent in 1998, 96 percent in 1999, and 34 percent in 2000.

"We have proven over the years that ours is a company that thrives on challenge, a company with remarkable resilience and ability to remain strong and profitable even in the most challenging times," Cojuangco said.

Explaining the company’s decision to spin off its non-liquor businesses, Cojuangco reiterated the tremendous benefits to be gained from associating the bottled water and juice brands with Coca Cola, an excellent franchise enjoying unrivalled brand loyalty. For its part, La Tondeña will be able to concentrate its attention and resources on its liquor business.

"This presents La Tondeña with a powerful opportunity to redefine its future, giving it single-minded focus on its most important core competence," said Cojuangco. "This is the business that has defined La Tondeña and which has given true value its shareholders."

Cojuangco revealed that the company is currently evaluating liquor companies for possible acquisition or tie-up. It will also penetrate high growth liquor segments such as alcopops and brandy which, combined, have an industry revenue of about P2 billion. Being lined up is a portfolio of new products strategically aligned with the company’s manufacturing processes, infrastructure, and distribution channels. Condiments and sauces, with annual revenues estimated at P9-P10 billion, comprise another product segment that will be pursued.