Swift Foods expects chicken exports to hit $1M this month

Swift Foods Inc., the poultry arm of the Concepcion-owned food and beverage conglomerate RFM Corp., expects its chicken exports to hit $1 million by the end of this month due to continued shipments to Japan.

"Shipments to Japan continue to be made every week and orders continue to increase," Swift president and chief operating officer Bernie Concepcion said yesterday.

Swift started exporting its processed chicken products to Japanese firms Sumikin Busan and Nisho Iwai last July.

Under its contract, Swift shall export about 30 to 34 metric tons (MT) of processed chicken products over the next six months.

Concepcion expects Swift’s partnership with the two trading firms to go beyond December 2004 or the end of its contract as it continues to meet world market standards.

Swift is aiming to get 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.

The company, together with local entrepreneurs, pumped in close to P800 million to expand its Northern Mindanao poultry operations which include a 8,000 birds per hour slaughtering plant and a further processing plant.

"These plants are geared for producing customized products for the domestic food service accounts and exports. Many Japanese customers have visited the plants and they were very pleased," Concepcion said.

Concepcion said Swift’s export activities have generated more employment for Misamis Oriental’s residents. From only 200 workers, the company now has over a thousand.

He said Swift is now in the second phase of expansion in its Misamis Oriental operation to be able to supply additional orders from Japan.

Swift expects to return to profitability this year on the back of improved sales, particularly from its exports. From a net loss of P926 million in 2003, the company is eyeing a net profit of P150 million.

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.

Swift registered revenues of P3.8 billion last year, 26 percent lower than P5.3 billion in 2002. This was 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 accounted 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 product.

The focus given by the company in streamlining its operations particularly those involving distribution, inventory management and branch network, brought about a drastic drop in the operating expenses from P1.3 billion in 2002 to P767 million in 2003.

Swift, which has a market share of 19 percent to 20 percent, is one of the country’s pioneers in integrated poultry production. – With a report from Rocel Felix