Swift Foods expects to be back in the black this yr with higher sales

Swift Foods Inc., the poultry unit of the Concepcion-owned food and beverage conglomerate RFM Corp., expects to return to profitability this year on the back of improved sales, particularly from its exports.

At the sidelines of the company’s stockholders meeting yesterday, Swift president Bernardo Concepcion said the firm is eyeing a net income of P150 million this year, a significant turnaround from the P926 million loss incurred in 2003. Excluding its meat operations which had been transferred to parent firm RFM, losses of Swift’s poultry business stood at P534 million last year.

Concepcion said 25 percent of the firm’s total sales will come from exports to Japan. The company has started exporting its processed chicken products to Japanese firms Sumikin Busan and Nisho Iwai.

Swift has already delivered two metric tons of chicken cut-ups used to prepare the popular Japanese chicken barbecue dish, the yakitori. Under its contract, Swift shall export about 30 to 34 metric tons of processed chicken products over the next six months.

Concepcion is confident that Swift’s partnership with the two trading firms will continue beyond Dec. 2004 or the end of its contract as it continues to meet world market standards.

Swift is aiming for a slice of Japan’s $350-million market being supplied by Thailand. The company’s chicken dressing plant in Misamis Oriental province in Southern Philippines has a daily capacity of 100,000 pieces of dressed chicken.

Concepcion said the company will spend about P300 million to P350 million to expand the capacities of its contract growing base, hatchery facilities, processing capability and other support facilities.

Funding, he said, will come from borrowings. "We’re seeking financing to satisfy our export requirements and further improve our facilities," Concepcion said.

Swift, which has a market share of about 20 percent, is one of the country’s pioneers in integrated poultry production. In recent years, it forged several joint ventures with local entrepreneurs to invest more than P500 million to expand its Northern Mindanao facilities.

Swift registered revenues of P3.8 billion last year, 26 percent lower than the P5.3 billion level in 2002, due mainly to the effect of the transfer of the company’s marketing, selling and distribution activities of the meat business to RFM effective Oct. 1, 2002, which was responsible for 82 percent of the sales decline.

On the other hand, around 18 percent of the decline is attributable to the decrease in poultry products and rationalization of its products.