Tanduay aims to double Luzon market share

MANILA, Philippines - Hard liquor maker Tanduay Holdings Inc., which claims to control over 95 percent of the local rum market in Visayas and Mindanao, is aiming to double its market share in Luzon in the next three years to 12 percent.

Tanduay president Wilson T. Young said the company is hoping to strengthen its share of the rum market in Luzon by launching new products.

Young said that while Tanduay Five Years brand, Tanduay ESQ, Rhum G5, Gin Kapitan and Cossack Blue continue to be the group’s traditional best sellers, the recently-launched Boracay Rum has attracted a good following especially among women and the young generation.

Given the public’s strong reception to its Boracay Rum, which was launched only in March, Tanduay is set to introduce new flavors into the marketplace to add to provide consumers with exciting flavor combinations. Among its existing variants are Cappucino and Coconut.

Nelson Mendones, chief finance officer of Tanduay, said the company is looking to double the production capacity of Boracay Rum to 100,000 cases a month towards the end of the year to meet strong demand for the product.

Mendones said the company is eyeing a net income of P1 billion this year, up six percent from 2010. Revenues are likewise seen to grow by 20 percent to P14 billion as sales volume is forecast to increase by 15 percent to 20.39 million cases.

Last year, Tanduay chalked in net earnings of P645 million on revenues of P11.5 billion. It expects revenues to rise by 20 percent this year to P13.8 billion as sales volume is seen to increase by 15 percent to 20.39 million cases.

The company also expects to derive additional sales from its new products like the T5 Light, T5 Extra Strong, and Embassy Whiskey.

For the first quarter this year, Tanduay earned P208 million, mainly due to higher volume and a seven percent improvement in average selling prices. Revenues climbed by 30.22 percent to P2.93 billion.

Tanduay has earmarked P1.5 billion for capital expenditures in the next two years to upgrade and expand distillation and bottling facilities. It is beefing up the capacity of its nine-hectare distilling plant in Batangas to 150,000 liters from the current 100,000 liters per day.

The company is also repairing its plant in Cabuyao, Laguna which had been gutted by fire in October 2008.   The facility used to produce 30,000 cases per day.