Century Pacific Food Inc. (CNPF) is allotting P2 billion for capital expenditures this year, 20 percent lower than the P2.5 billion it spend in 2021, in light of rising inflation.
In a press briefing after the firm’s annual stockholders’ meeting, CNPF Chairman Christopher Po said this year’s capex will complement spendings done over the past years, particularly the COVID-19 years, which had the company invest in capacity building.
“So three consecutive years of double-digit growth, requiring 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.
He noted that, “The major capacity increases that came on stream last year had to do with our 50 percent increase in our coconut processing capacity. And then, 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.”
“Other capital spending requirements have to do with maintenance or increasing compliance requirements. We’re also spending more for the digitalization of our processes,” said Po.
He also said the company is confident of achieving a double-digit growth in revenues in 2022 despite the challeng of rising inflation which is forcing them to raise prices.
“We expect this to be supported by a resilient demand, innovations, expansion and strategic price increases,” he said.
Century Pacific has already raised prices by mid-single digits on average for different products. “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 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 who might even go to other categories. So it's a balancing act,” he said.
Po said Century Pacific has “downshifted a bit” on introducing new products and is instead “supporting innovations launched in the last 18 to 24 months.” “So we are saving some bullets now for the future when maybe the inflationary pressures are less felt. And we are definitely doing 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 our bottom line,” he said.