Vitarich Corp. is doubling down on supply security with a P280-million broiler acquisition that would lock in chick supply and cut production costs.

The company informed the stock exchange on Friday that its Board of Directors approved on 18 February the final terms of the purchase of 100 percent of Broilers Club Inc. (BCI), including 125,000 common shares, shareholder advances, and breeder farm facilities in Davao del Sur.

The company said the move is a “strategic step to stabilize the supply of broiler chicks and lower its cost of production.”

The breeder farm facilities will be integrated into Vitarich’s operations, with the additional capacity expected to boost its total breeder output by as much as 8 percent.

The total deal value of P280 million covers P95 million for the purchase of BCI shares, P130 million for shareholder advances, P25 million for land acquisition, and P30 million to settle an outstanding bank loan tied to one of the farm properties.

Vitarich said P10 million has been paid as option money, while P140 million will be paid upon closing, and the remaining P130 million after the transfer of shares and land titles.

The company expects to finalize and sign definitive agreements and implement documents within February, subject to customary closing conditions. 

Once completed, BCI will become a wholly owned subsidiary of Vitarich, and its breeder farm facilities will serve as part of the company’s expanded production base.

BCI, which operates under the name Southern Sunrise Agriventures, is engaged in poultry and egg production and owns breeder facilities on a 46,360-square-meter property in Sta. Cruz, Davao del Sur.