Gardenia eyes 25% hike in sales with new P2-B plant
Published Jul 9, 2019 12:00 am
By Bernie Cahiles-Magkilat
Gardenia Bakeries, the country’s largest bread manufacturer, will ramp up production of low priced-loaves to 40 percent of production in three years under the Neubake brand to meet the faster growth for this product but good quality bread as the firm targets 25 percent increase in sales this year to P8.2 billion from P6.6 billion last year.
Gardenia Bakeries inaugurates a fully-automated bread manufacturing facility in Mabalacat, Pampanga.
Simplicio Umali Jr., president and general manager of Gardenia Philippines, told reporters at the inauguration of its P2-billion bread plant in Mabalacat, Pampanga, its second biggest plant but the most advanced technoligcally among its four plants.
Umali said Neubake currently accounts for 10 percent of its total production, but is going to ramp it up as its second brand.
“We intend to make that as much as 40 percent in the future because the low-income market is very large. So, we want to make this product available for them as a second brand,” said Umali. He expects production will hit 20 percent next year and 40 percent in three years.
He clarified though that Neubake is not converting its Gardenia production or Gardenia giving up its production to Neubake stressing even the low-income consumers, whenever their budget allow, still buy the more premium Gardenia brand.
The Neubake loaves will be lighter at 450 grams and is being sold at P64 per loaf compared to the 600-gram Gardenia at P64 per loaf.
“It has a simpler basic formula, but it is produced in the same facility that we have here. Right now, we are producing Gardenia bread, but sometimes you will see them producing Neubake,” said Umali.
For this year, Umali said they expect at least 25 percent increase in sales from last year’s P6.6 billion level, including sales from the new Pampanga plant which caters to the still unserved areas in Luzon like Mountain Province, Ifugao and Tabuk.
“These are very difficult areas to reach. The mountain provinces. These are very difficult mountain trails that are hard to reach. We will now start reaching these areas,” he said citing the company’s already wide market share of 60 percent in the white loaves market.
Mindanao and Cebu are growing about 35 percent, whereas Luzon is about 25 percent or an nationwide average growth of 25 percent more or less. The company does not also intend to increase its prices for the year.
Meantime, Gardenia’s P2 billion new Pampanga facility has two lines. The investment includes the land, the building, trucks and distribution facilities. Since breadmaking is a low-margin business, recovery of the investment is expected in 6-8 years, he said.
At present, the plant is capable of producing 400,000 loaves and buns a day. The wide selection of Gardenia products will be produced in the Pampanga bread facility, including white breads, health bread selections, flavored loaf offerings, buns or pandesal, and Neubake loaf and bread rolls.
The plant, which employs 100 people, is still running on one shift but will soon ramp up to two and three shifts by the end of the year.
Umali further noted that the new plant will be Gardenia’s second largest facility, next to its Laguna plant. “This new factory has a white loaf production line, a flavored loaf line, a bun and pandesal line and a snack toast line. With these four new production lines, the Pampanga factory will be able to produce nearly 400,000 loaves and buns every day ready for delivery to supermarkets, groceries and convenience stores,” he said.
Vitabread Food Products Inc handles bread manufacturing for the North and Central Luzon bread needs, and support Metro Manila markets; while Gardenia Bakeries Philippines ensures the marketing and distribution of finished Gardenia products.
Umali also described how Gardenia applied the best technologies on its new production line.
“The whole plant is computer-controlled starting from the use of an upgraded concept in the ingredient handling and makeup systems, proofing, use of robotics in handling baking pans and a unique technology in the depanning process which promises to be gentle to the bread, completely untouched by human hands,” Umali said.
“The use of tumbler to check all four sides of the loaf bread and the presence of tornado cleaner to ensure all baking pans are clean and free of crumbs were also incorporated in the process,” he added.
The oven baking system will continue to use environment-friendly liquefied petroleum gas (LPG) like in the other Gardenia factories.
Umali also highlighted, “all equipment, machines and baking technologies are sourced from the best baking equipment suppliers from all over the world including Germany, the Netherlands, Japan and the USA. We also added new equipment suppliers that will enhance the whole baking process.”
In a span of four months this year, Gardenia invested a total of P3.5 billion with the opening of the P1.5 billion plant in Cagayan de Oro.
Umali explained the plant inauguration’s theme ‘Bake to the Future 2.0’.
“For the first time in Gardenia’s history in the Philippines, Gardenia Bakeries opens two huge factories with sophisticated technologies in a span of four months. This is truly a significant milestone for Gardenia in its 21 years in the Philippine bakery industry,” Umali said.
Gardenia Bakeries inaugurates a fully-automated bread manufacturing facility in Mabalacat, Pampanga.
Simplicio Umali Jr., president and general manager of Gardenia Philippines, told reporters at the inauguration of its P2-billion bread plant in Mabalacat, Pampanga, its second biggest plant but the most advanced technoligcally among its four plants.
Umali said Neubake currently accounts for 10 percent of its total production, but is going to ramp it up as its second brand.
“We intend to make that as much as 40 percent in the future because the low-income market is very large. So, we want to make this product available for them as a second brand,” said Umali. He expects production will hit 20 percent next year and 40 percent in three years.
He clarified though that Neubake is not converting its Gardenia production or Gardenia giving up its production to Neubake stressing even the low-income consumers, whenever their budget allow, still buy the more premium Gardenia brand.
The Neubake loaves will be lighter at 450 grams and is being sold at P64 per loaf compared to the 600-gram Gardenia at P64 per loaf.
“It has a simpler basic formula, but it is produced in the same facility that we have here. Right now, we are producing Gardenia bread, but sometimes you will see them producing Neubake,” said Umali.
For this year, Umali said they expect at least 25 percent increase in sales from last year’s P6.6 billion level, including sales from the new Pampanga plant which caters to the still unserved areas in Luzon like Mountain Province, Ifugao and Tabuk.
“These are very difficult areas to reach. The mountain provinces. These are very difficult mountain trails that are hard to reach. We will now start reaching these areas,” he said citing the company’s already wide market share of 60 percent in the white loaves market.
Mindanao and Cebu are growing about 35 percent, whereas Luzon is about 25 percent or an nationwide average growth of 25 percent more or less. The company does not also intend to increase its prices for the year.
Meantime, Gardenia’s P2 billion new Pampanga facility has two lines. The investment includes the land, the building, trucks and distribution facilities. Since breadmaking is a low-margin business, recovery of the investment is expected in 6-8 years, he said.
At present, the plant is capable of producing 400,000 loaves and buns a day. The wide selection of Gardenia products will be produced in the Pampanga bread facility, including white breads, health bread selections, flavored loaf offerings, buns or pandesal, and Neubake loaf and bread rolls.
The plant, which employs 100 people, is still running on one shift but will soon ramp up to two and three shifts by the end of the year.
Umali further noted that the new plant will be Gardenia’s second largest facility, next to its Laguna plant. “This new factory has a white loaf production line, a flavored loaf line, a bun and pandesal line and a snack toast line. With these four new production lines, the Pampanga factory will be able to produce nearly 400,000 loaves and buns every day ready for delivery to supermarkets, groceries and convenience stores,” he said.
Vitabread Food Products Inc handles bread manufacturing for the North and Central Luzon bread needs, and support Metro Manila markets; while Gardenia Bakeries Philippines ensures the marketing and distribution of finished Gardenia products.
Umali also described how Gardenia applied the best technologies on its new production line.
“The whole plant is computer-controlled starting from the use of an upgraded concept in the ingredient handling and makeup systems, proofing, use of robotics in handling baking pans and a unique technology in the depanning process which promises to be gentle to the bread, completely untouched by human hands,” Umali said.
“The use of tumbler to check all four sides of the loaf bread and the presence of tornado cleaner to ensure all baking pans are clean and free of crumbs were also incorporated in the process,” he added.
The oven baking system will continue to use environment-friendly liquefied petroleum gas (LPG) like in the other Gardenia factories.
Umali also highlighted, “all equipment, machines and baking technologies are sourced from the best baking equipment suppliers from all over the world including Germany, the Netherlands, Japan and the USA. We also added new equipment suppliers that will enhance the whole baking process.”
In a span of four months this year, Gardenia invested a total of P3.5 billion with the opening of the P1.5 billion plant in Cagayan de Oro.
Umali explained the plant inauguration’s theme ‘Bake to the Future 2.0’.
“For the first time in Gardenia’s history in the Philippines, Gardenia Bakeries opens two huge factories with sophisticated technologies in a span of four months. This is truly a significant milestone for Gardenia in its 21 years in the Philippine bakery industry,” Umali said.