The Aboitiz Group has ramped up its capital expenditures (capex) for its food business by 42 percent to P4 billion this year from P2.7 billion in 2023 to support the company’s feed mill expansions in China and Vietnam, particularly eyeing the fast-growing demand for pet food market in the Asia Pacific region.
Tristan Aboitiz, president and CEO of Pilmico Foods Corp. and Gold Coin Group, told Manila Bulletin Business that the food group’s capex this year accounts for two percent of the total capex of Aboitiz Group and its partners for 2024. Pilmico is the integrated food and agribusiness subsidiary of Aboitiz Equity Ventures, Inc. (AEV), the holding company of the Aboitiz Group. Pilmico comprises four divisions: flour, feeds, farms, and trading.
“This (increased capex) is primarily for the feed mill expansions in China and Vietnam, with the remaining funds for maintenance, network infrastructure, and system upgrades,” said Aboitiz.
The company is building new feed mills in Yunnan, China, which is a 150,000-metric ton capacity feed mill with the potential to expand capacity up to 270,000 MT. In Vietnam, the group is expanding its operation in Long An, which is a 200k MT-capacity feed mill with the potential to expand capacity up to 300k MT. The Vietnam expansion is underway and is set for completion by the first half this year.
Notably, Aboitiz said that the feed mill expansion is to support the fast-growing pet food market in Asia Pacific, which is driven by more people having pets and a greater demand for top-quality pet nutrition.
“Pilmico has seen a strong 19 percent increase in pet food sales in 2023, showing our success in this area,” he said. “We're now planning to expand even more by adding treats and new flavors like salmon to our pet food range. These additions match what pet owners want and show our commitment to providing the best nutrition for pets,” he added.
Overall, the food group has a total of 4.2 million annual metric ton capacity across eight countries producing swine, broiler, layer, duck, pigeon, shrimp, fish, game fowl, and other animal feeds.
Its farms also produce 300 tons of pork and four million eggs per month. “Our Triple-A accredited meat-cutting and slaughtering facility, Tarlac MeatMasters, can process 180 heads per hour,” the group said.
Pilmico represents one of the largest privately-owned agribusinesses in the region, with over 3,700 partners throughout the multitude of production facilities across eight countries in Asia - Philippines, Singapore, Indonesia, Thailand, Vietnam, Malaysia, Brunei and China. Technically, Singapore is included in the list because it is the headquarters for its trading company and for Gold Coin.
Armed with the purpose of sustainably feeding Asia’s growth from mill to meal, the Aboitiz food group aims to take a leadership position in innovating the food value chain in the Asia Pacific.