Century Pacific Food Inc. (CNPF) is increasing its capital expenditure budget to around P4 billion to P5 billion this year from P3 billion to P3.5 billion allotted in 2023 to support its ongoing expansion programs.

During the firm’s annual stockholders meeting, CNPF President and CEO Teodoro T. Po said this year’s capex “is a big jump from our previous 2023 and prior numbers.”

“One main activity here is that we are increasing our coconut processing capacity. So that's taking a significant chunk, about half of our capex this year,” he added.

Po noted that the capacity expansion program is already in progress and “we are in the mid stages of completing our expansion of our coconut processing capacity, because we've been getting more and more demand from our principal principals in the US and in Southeast Asia.”

“This latest capex will roughly increase our capacity by about 25 percent. But this is just the first stage of the expansion and, if market trends continue… in five or seven years from now, we expect to be double of our current capacity, which is pretty significant,” he added.

The medium term target is to increase capacity from the current 800 to 850 nuts a day to about 1600 a day “which is going to be a pretty significant footprint in the Philippines,” said Po.

He also said that “we're also creating multipliers across the coconut supply chain. So coconut water comes with coconut meat, coconut shell—the byproducts of which would be coconut flour and all of the other attendant byproducts. 

“So there's a whole ecosystem built around coconut processing. And we're certainly happy to grow that business. We're taking basically a additional technology, new technologies that we're implementing in existing plant facilities," he added.

Po further noted that the "other half of capex will continue to go to what we would consider as maintenance and cost improvement capex. There's also some capacity expansion happening in other parts of our company that will require capex but to a smaller extent than the coconut business." 

“And lastly, there are special efficiency and the environmentalist environmental sustainability projects that we also budget some capex for,” he said explaining that, “if it works successfully, it will further reduce our carbon footprint by going to higher efficiency, energy production systems,” he said.

Funding for the capex will be internally-generated coupled with some short-term borrowings from banks whenever there are funding gaps.