Tanduay profit jumps 92% to P1.1 billion

MANILA, Philippines - Tanduay Distillers Inc. (TDI), a wholly-owned subsidiary of Lucio Tan-owned Tanduay Holdings Inc., reported a 92 percent jump in net income last year to P1.1 billion on (THI) higher sales volume and improved selling prices.

In a statement, THI said revenues of TDI went up 8.8 percent to P12.3 billion as sales volume rose 1.4 percent, lifted by a 7.4 percent spike in selling prices.   

Sales volume growth, however, was slower than the 7.5 percent and eight percent average growth rate in 2010 and the last five years, respectively.

“Apart from the year 2010 being an election year, sales performance in 2011 was also affected by the slowdown in the domestic economy which grew by only 3.7 percent as against the previous year’s 7.3 percent,” THI said.

Based on a recent survey by AC Nielsen, the Tanduay brand - which produces Tanduay Five Years, Tanduay ESQ, Rhum 65, Gin Kapitan and Cossack Blue - is now the highest selling brand in the Philippines, accounting for a 34 percent market share.

The company said it has a very large following in the Visayas and Mindanao markets where it outsells all competitors three to one.

THI recently raised P1.68 billion from a follow-on offering of shares. Proceeds from the sale would be used to fund ongoing expansion initiatives of its subsidiaries as it aims to break into global markets.

It is particularly looking at the US and China as potential sites for expansion.

THI owns two of the largest distillery firms in the country - Asian Alcohol in the Visayas and Absolut Distillers in Luzon.

The company has earmarked P550 million to increase the distilling capacity of the Batangas-based Absolut Distillers from the existing 75,000 liters of ethyl alcohol per day to 175,000 liters with the addition of new distillation columns in 2012. The expansion also includes the construction of a 30,000-barrel capacity alcohol ageing plant.

Another P390 million was also set aside for the installation of a fully automated washing and bottling facility at the Negros plant. The project also includes the construction of six alcohol tanks with a capacity of 300,000 liters each. The new bottling line will add 20,000 cases daily capacity to the plant.

The company has also alloted P165 million for the refurbishment of the fire-damaged facilities in Laguna. The project entails the construction of a new laboratory, compounding building, 23 compounding tanks with a capacity of 1.4 million liters, 22,500 liter capacity alcohol storage tanks and a new bottling line with a capacity of 14,000 cases per day. It is slated for full completion in January 2012.

About P200 million of the proceeds would also go to the conversion of a part of the Manila plant to a Heritage Museum which would showcase Tanduay’s history, products and processes.

Other funds will be used to offer an early retirement package to daily employees at the plant and the complete relocation of operations to the Laguna plant.

Another P165 million would go to the improvement of the distillery plant at Pulupandan, which has been on temporary stoppage since 2009. The facility used to supply 30 million liters a year to Tanduay’s rum production requirement.