Tanduay Holdings Inc., owned by tobacco and airlines tycoon Lucio Tan, is eyeing a five-to-eight percent growth in sales volume this year amid the worldwide economic slowdown.
Tanduay president Wilson Young said the company is expecting “moderate growth” this year due to tough business challenges.
Last year, the company sold an estimated 17.5 million cases, up 15 percent from 15.2 million cases in 2007. This lifted Tanduay’s 2008 net income to P400 million or more than four times the P90 million reported a year earlier.
In the nine months ending September 2008, Tanduay posted a net income of P468.8 million, a reversal of the P2.35-million net loss incurred during the same period a year earlier. Net sales rose 25.6 percent to P7.07 billion, mainly driven by aggressive advertising and promotional campaigns and price adjustments.
Tanduay raised prices by an average of seven percent in July.
The strong growth was also attributed to the opening of a new production facility in Cagayan De Oro, Misamis Oriental which is currently serving 50 percent of the region’s requirements.
Young said subsidiary Asian Alcohol is expected to complete the expansion of its Negros Occidental plant in October this year. Around P600 million has been allotted to increase the distillery’s capacity by 100,000 liters a day or 30 million liters annually.
Currently, the facility, which produces raw alcohol from sugarcane molasses, has a capacity of 40 million liters a year.
Tanduay holds 40 percent of the distilled spirits market and 90 percent of the country’s rhum market.
The company has another distillery in Batangas under its Absolut unit. The facility will also be upgraded to produce 85,000 liters of alcohol from 75,000 liters.