Century Pacific allots ₧2B for capital expenditures

Century Pacific Food Inc., the food manufacturer led by the Po family, said it is allotting some P2 billion for capital expenditures (capex) this year, lower than the previous year’s capex of P2.5 billion.

Christopher T. Po, Century Pacific chairman, said despite rising inflation, the company is confident that its top line would post double-digit growth, as the company plans to raise the prices of its products.

“We expect this to be supported by a resilient demand, innovations, expansion and strategic price increases,” Po said in a news briefing after the company’s stockholders’ meeting.

Its capex this year will complement the spendings done over the past years, particularly during the pandemic over the last two years, which saw the company investing in capacity building, he said.

“So three consecutive years of double-digit growth require us to invest in more capacity, and invest in new products and innovations that will allow us to continue to grow into the future,” Po said.

“The major capacity increases that came on stream last year had to do with the 50 percent increase in our coconut processing capacity. And then, for those of you have been following us in 2020, during the early stages of the pandemic, we also switched on a new capacity for a 100 metric ton a day tuna plant. Both operations for tuna and coconut plants are a highly utilized at this point in time.”

The company, which mostly sells canned goods including Century Tuna and 555, has already raised prices by mid-single digits on average for different products since the start of the year.

“But for the full year, I think we’ll end increasing on average between mid- to high-single digits,” Po said.

“This is not able to fully offset the cost pressures that we’re feeling.

We’re not passing on everything all in one go, because we want to cushion the effect on our consumers. But at the same time, we also have to be careful if we do it too quickly, that our consumers might also substitute our products for others and there are those who might even go to other categories. So it’s a balancing act.”

Po said Centur y Pacific has slowed down on introducing new products and is instead supporting innovations launched in the last 18 to 24 months.

“So we are savings some bullets now for the future when maybe the inflationary pressures are less felt. And we are definitely doing the belt tightening, undertaken cost efficiency measures during the last two years of the pandemic. But to the extent that we have some more room to tighten our belts, we are doing that in order to shore up our bottom line.”