Lockdown sales lift prompts Mega Sardines' P500-M expansion

MANILA, Philippines — After sales got a boost from stay-at-home consumers during the lockdown, canned sardines producer Mega Global Corp. is setting aside half a billion pesos to increase production and cope with demand.

The target is to increase both its canning and fishing capacity by 20% from their current levels, said Michelle Tiu Lim-Chan, company vice-president. The P500-million budget for the project will be spent this year and the next.

At present, the firm has two manufacturing plants located in Zamboanga City and part of the expansion plan is to open a factory in Luzon and gain access on raw materials in the main island, Marvin Tiu Lim, vice president for sales and marketing, said in an online briefing on Thursday.

As it is, demand has been outstripping supply of Mega products for the past five years and the coronavirus disease-2019 (COVID-19) pandemic, and resulting lockdowns, only worsened the situation. 

“The COVID-19 pandemic pushed Mega Global factories to the limit, producing 2 million canned goods everyday,” William Tiu Lim, president and chief executive, said in an online briefing.

To add to the pain, movement restrictions as a result of the lack of public transport minimized production between 30% and 40% during the enhanced community quarantine in Luzon that started March 17. 

On the other hand, rush buying of ready-to-eat food during the lockdown pushed up product sales, including their flagship sardines as well as tuna and tomato sauce, grew by “double to triple digits,” Lim-Chan said. This is a similar scenario experienced by other canned goods makers such as listed Century Pacific Food Inc., which saw revenues up 24% year-on-year in the first quarter.

Mobility prohibitions, including those implemented by cities and municipalities that followed Luzon’s lead, had since been eased from June 1, and Mega Global production quickly bounced back by around 80%.  The company said it is gearing for future growth.

“The best time to invest is when everything is down,” Malcolm Tiu Lim, vice-president for Zamboanga operations, said. “Whenever there is a calamity or a national emergency, we go into overdrive.”

Asked whether the company is eyeing going public to raise funds for expansion, Lim-Chan, the vice-president, said conducting an initial public offering is “on the table” but something to be considered only in the next two to five years. 

“We have not really decided 100% but it's not off the table,” she said.