Aboitiz putting up egg production facility

MANILA, Philippines - The flour and feed milling unit of Aboitiz Equity Ventures (AEV) is putting up an egg production facility in Tarlac to take advantage of robust domestic demand.

In a briefing in Taguig city yesterday, Pilmico Foods Corporation president and chief executive officer Sabin Aboitiz said the company is investing around P200 million for the construction a state-of-the art layer facility in Tarlac.

Construction of the facility is expected to start in two to three months with commercial operations expected to commence in June next year.

 “We will finalize the land. We are doing this with the people in our swine business. If it’s successful we can increase the bird population to one million. We really believe in the egg business,” said Abotiz.

The facility would use the latest technology in egg production such as modern ventilation and climate control mechanisms to ensure high production.

The facility would initially house 160,000 layer hens that would produce an initial 140,000 eggs a day.

Aboitiz said domestic demand for eggs is expected to be strong as more consumers are looking for cheaper sources of protein.

 “We feel the egg market will grow faster than other protein markets because it is a cheaper protein,” he said. “As per capita income grows and people shift from a diet high in rice to a diet with less rice and a bit if protein, egg is a good choice because is it cheaper protein.”

Aboitiz also said Pilmico closed on Aug. 1 the acquisition of a majority stake in one of the largest feed producers in Vietnam.

In May, Singapore-based Pilmico International Pte. Ltd signed a share sales and purchase agreement with Vinh Hoan Corporation for the acquisition of a 70 percent stake in subsidiary Vin Hoan 1 Feed JSC (VHF) for $19.6 million.

Pilmico International procured 21 million outstanding shares of VHF, representing 70 percent of its outstanding shares at $0.93 apiece.

Pilmico International would purchase the remaining 30 percent of VHF within five years for the same price per shares bringing the total transaction cost to $28 million.

The acquisition is aligned with the company’s strategy of strengthening its core feed business and expanding operations in the Vietnamese market.

 “We will be doubling the feed capacity because the fish exports of Vietnam are growing. There are a lot of (fish) farms coming up so we are doing to double the capacity,” said Aboitiz.

He said that for the next three years, the company would also look at opportunities for expansion of its flour and feed business in Thailand and Indonesia.

“We are looking at flour and feed mills in Vietnam, Thailand and Indonesia. So in the next three years, we’re going to focus on that. We have put out a team there in Vietnam to put up the business,” he said.

Aboitiz said the company also plans to engage in fish farming in the Mekong River in Vietnam.

“Eventually we plan to go into fish farming ourselves in the Mekong area,” he said.

He said the company would also expand the production capacities of its poultry and swine feed mills in Tarlac province and Iligan city from 40 tons per hour to as much as 80 tons per hour.

 “We are also expanding our feed mills in Tarlac and Iligan. We will be doubling the production capacity,” he said

Pilmico would also be increasing the population in its swine farm in Tarlac from from 8, 500 heads to about 13, 500 heads.