Pilmico yr-on-yr profit drops by 13% last year

CEBU, Philippines - The food subsidiary of Aboitiz Equity Ventures (AEV), Pilmico Foods recorded a 13 percent year-on-year revenue drop to P458 million.

Pilmico attributed the revenue slowdown last year to the entry of imported flour in the Philippine market.

Income contribution from the flour business was down by 27 percent, at P325 million in 2008.

However, the company’s feeds and swine businesses partially offset the negative development, as both volume and selling prices increased. Income contribution for 2008 registered a 62 percent expansion, equivalent to P134 million.

With the completion and operation of its new feedmill plant and new grains silos in Iligan, Pilmico expects to generate substantial cost savings in freight, with this new capacity closer to its market in Visayas and Mindanao region.

“We should also realize savings in our input costs, particularly corn, due to proximity to sources in Mindanao. Pilmico increased its grower farm capacity and is also constructing a new nucleus farm in Tarlac that will increase its sow population by 37 percent,” said AEV president and chief executive president (CEO) Erramon I. Aboitiz.

In November of last year, Pilmico started constructing a biogas recovery system in its various facilities in Tarlac. With this, Aboitiz said the company expects to recover and use the methane gas to generate electricity and reduce gas emission into the atmosphere.

Aside from generating its own power, Pilmico will receive carbon credits, which it can sell to the world market, Aboitiz said.

This project, he said is part of the Aboitiz Group’s initiative of reducing the group’s carbon footprint “wherever we can.”

He said the company is starting to reap the benefits of its investments incurred last year, in Iligan feedmill, grower finisher farm, and flour blending facility.

The biggest of which, is a new feedmill that has an annual production capacity of 108,000 metric tons (MT), which began commercial operations in September last year.

The new grain silos with capacity of 27,000 MT were also completed in 2008. The facility was built to meet the growing demand for animal feeds in the Visayas and Mindanao markets.

In first quarter of 2009, the Pilmico contributed P138 million to the group, a 12 percent lower than last year’s the same period.

The flour and swine business turned in lower profit contributions, but was partially offset by the strong showing our its feeds business, in the first three months of 2009. — Ehda M. Dagooc