Gardenia expands with P100-million factory in Cebu

MANILA, Philippines – Leading bread manufacturer Gardenia Bakeries will invest as much as P100 million to put up the biggest bread factory in the Visayas, the company’s top executive said yesterday.

In a press conference, Gardenia president Simplicio Umali Jr. said they decided to establish a plant in Cebu in order to directly service their clients in the Visayas. Currently, Gardenia products are only available in some provinces through cargo delivery.

The Cebu plant is expected to produce 2,000 loaves per hour or a daily capacity of nearly 50,000 loaves. Umali said the 3,000-square meter factory can be expanded by another 3,500 square meters.

“We are here for the long haul,” he said, adding that they would likely to expand to 4,000 loaves of bread per hour depending on market demand.

Initially, the plant will employ 100 people.

Among the products to be sold are the classic white bread, high fiber wheat bread and some flavored loaves.

Umali said if the Cebu plant runs successfully, they will further expand with a similar plant in Davao in two years time. The main Gardenia factory is located in Laguna.

“With the factory, we aim to be the market leader in bread for Cebu,” Umali said. He added that the Cebu plant will also serve the bread requirements of Bohol, Cagayan de Oro, Malaybalay, Butuan and Iligan, noting that robust demand in the Visayas and Mindanao pushed the firm to rapidly embark in the Cebu plant.

Plant construction is ongoing and is expected to be completed in January next year. Umali said the challenge for the Cebu market is that Gardenia will enter the market as a premium priced bread given that the price of Gardenia is P54.50 for a normal loaf and up to P67 for special bread, compared loaf bread in Cebu priced at only P40.

“We will really have a premium price but this is because we use very expensive ingredients,” he stressed.

Meanwhile, Umali said their sales have been growing especially during the second half. Year-to-date, sales growth is at 21 percent, and year-end growth is pegged at 25 percent. “Consumer confidence is back. Now everyone is very positive.”

Last year, Gardenia’s sales stood at P2.1 billion. This year, it is expected to hit P2.6 billion and P3 billion by 2011.