Fruitas Holdings, Inc. is ramping up its foray into the bakery business by acquiring certain assets of Balai Pandesal Corporation and converting its branches into multi-product stores.
In a disclosure to the Philippine Stock Exchange, Fruitas said Balai Pandesal sells a wide range of bread products in all of its stores, and also offers cake, bread spreads, sweet tofu snack, and ice cream in selected stores.
“Post-acquisition, Balai Pandesal will be more capable to aggressively challenge the high-quality pan de sal and specialty breads market. Further, Fruitas’ existing product lines will fit smoothly and effectively into Balai Pandesal stores,” the firm said.
Under an agreement signed by Fruitas, a subsidiary of Fruitas will acquire the trademark, recipes and other technical know-how, certain equipment and inventory from Balai Pandesal.
Expected to be completed no later than end of June 2021, the transaction is subject to execution of definitive agreements and financial closing.
“We have proven our ability to successfully integrate relatively small acquisitions and build them into significant revenue and profit contributors like Jamaican Pattie, Sabroso Lechon, and Soy & Bean,” said Fruitas President Lester Yu.
He added that, “We are excited about the prospects for ‘Balai’ as pan de sal is another Filipino daily diet staple that we want to supply and increase our market penetration.”
Yu noted that, “This will help us continue to pivot our business and increase our store network presence in local communities. The performance of our community stores has exhibited more resilience and growth beyond our initial expectations.”
At the time of acquisition, Fruitas will have five franchised Balai Pandesal stores, which are all located in Metro Manila.
Fruitas said it has already identified several strategic locations and is set to expand the Balai Pandesal store network to at least 20 within 2021. Its near-term goal is to open up to 100 Balai Pandesal stores, placed in high-density residential communities.
The firm said intends to sell a variety of its other food and beverage products in Balai Pandesal stores as more locations are opened.
This will complement Fruitas’ earlier announced initiative to increase its network of community stores, carrying the Babot’s Farm and Soy & Bean brands, to 100 by end of 2021.
Earlier this month, the number of operating Fruitas community stores crossed 50. Fruitas most recently opened community stores in Meycauayan, Bulacan, Marikina, and Las Piñas.