Tanduay looking for site to build liquor facility in Visayas

Tanduay Holdings Inc., the liquor unit of tobacco and beer magnate Lucio Tan, is scouting for a property in Visayas for its new liquor facility.

Tanduay director Lucio Tan Jr. said while the company has several properties, these are not suitable for manufacturing facilities.

However, he refused to say how much the company is allotting for the establishment of the new plant and how much this would add to existing production capacity.

Tanduay currently has three plants – one each in Negros, Cabuyao in Laguna and Quiapo.

It had earlier set aside P2 billion over the next three years for the establishment of a new plant and planned acquisitions.

Incidentally, the company has already started construction of a new liquor plant in Cagayan de Oro which is estimated to cost between P500 million to P1 billion.

Tan said the company intends to continue on increasing the share of higher margins in its product mix and sustain the development efforts on new products that will address emerging consumer preferences.

Tanduay is looking at new markets that will expand its customer base and aggressively shop around for acquisitions that will grow its business and improve shareholder value.

Tan expects the company’s income this year to be slightly higher than last year, helped by price adjustments made during the year.

Tanduay posted a net income of P660 million last year, up by 88 percent from 2003. Net sales likewise rose 22 percent to P6.76 billion, largely a result of higher sales volume and the increase in selling prices.

In the nine months ending September this year, Tanduay posted a net income of P582 or an increase of 55 percent from the previous year’s P377 million, mainly due to higher selling prices and better product mix.

Consolidated net sales reached P5.3 billion or an increase of 13 percent from the year ago level’s P4.7 billion. Sales volume was 11.1 million cases which is at the same level for the same period last year. The high inflation rate caused by the increase in fuel prices has resulted in a weakening consumer demand.

Tanduay was acquired by the Lucio Tan Group’s Twin Ace Holdings Corp. from the Elizalde family in May 1988. Following the purchase, the group launched a plant modernization and expansion program that increased the distillery’s production capacity by almost 50 times.