MANILA, Philippines - Newly-listed Calata Corp. is tapping small farmers and corporate farm producers as partners in line with an expansion plan to bring in more growth prospects for the company.
Shares of Calata, which were listed at the Philippine Stock Exchange yesterday, inched up to close at P7.70 per share from its opening price of P7.50 apiece.
The company will build on its relationship with farmers by providing agricultural inputs and technology transfer, Calata president and chief executive Joseph Calata said in a briefing.
Calata will also enter into more contract growing deals with big firms like San Miguel Corp., he added.
Calata is the country’s largest combined distributor of farm inputs. Among its business partners include San Miguel Corp. for B-Meg feeds and veterinary products; Syngenta, Bayer, Jardine, Dupont Sinochem for agro-chemicals; East West Seeds, Monsanto and Planters Products for agricultural seeds, and Swire and Viking for fertilizers.
“Out of the P270 million [shares sold], net proceeds are P240 million, of which P139 million will be for the 100 stores,” said Jose Marie Fabella, chief information officer of Calata.
The Bulacan-based agricultural firm will open 300 retail stores in three years to widen its reach, establish a more stable customer base and boost profit margins.
The remaining funds will be for inventory and working capital, Fabella added.
Calata’s listing is the third initial public offering (IPO) this year, next to investment conglomerate GT Capital Holdings Inc.’s P21.57-billion share sale in April and EastWest Banking Corp.’s P5.2-billion offering early this month.
To date, the company serves its customers through the 118 branches of affiliate Seneca Farms that is also owned by the Calata family. Fabella said Calata is looking at the possibility of folding in Seneca to the listed firm.
“Now we are more in Luzon and the proceeds will be used for Luzon. In the future we will expand in Visayas and Mindanao,” Calata said.
For expansion into new ventures, Calata said the company will start the operations of a P500-million broiler chicken facility in Davao.
Calata will supply five million broilers annually to Magnolia of San Miguel under a five-year contract. The contract growing will ensure steady revenues while shielding the firm from price disruptions, Calata said.
The agricultural firm also has a hog breeding farm in Isabela that supplies Monterey.
Calata said new income will be sourced from contract growing deals through fees.
Formerly known as Planters Choice Agro Products Inc., Calata has increased its annual revenues from about P200 million in 2003 to P2 billion in 2011, driven by higher sales of animal feeds, agricultural chemicals and fertilizers. It allowed the company to book P100 million in net income last year.
The company sold 36.012 million primary shares through a primary offering at P7.50 apiece. The offer shares represented 10 percent of the company’s issued and outstanding capital.
Calata’s shares hit an intraday high of P7.75 and a low of P6.66 per share yesterday.
“We are here for the long term because we are growing.When growth plans are completed, stock prices will follow,” Calata said.
The country’s farm production expanded at a slower pace of 1.08 percent in the first quarter of the year compared to the 4.17 percent expansion a year ago amid lower growth in crop harvests and a contraction in fisheries output.