The Gokongwei Family’s Universal Robina Corp. (URC) is pulling out its business from China — a move that would allow the company to redirect its focus towards “higher-growth markets” within the region.
In a Friday stock exchange report, URC announced its plans to fully close its manufacturing plant in Shanghai, China, by next year.
The facility, through URC-China Commercial Co., Ltd., currently handles the production of cereals and snacks.
Overseas, aside from China, URC also has operations in Hong Kong, Malaysia, Indonesia and Myanmar.
From January to June, URC sold a total of P80.7 billion from its products, representing a 3 percent growth from last year’s sales volumes.
The Branded Consumer Foods (BCF) group, excluding Packaging and China, experienced a 2 percent increase in sales in the first half — reaching P54.7 billion compared to the same period in the previous year.
Within the BCF group, BCF Philippines contributed P37.6 billion in sales, representing a marginal 1 percent gain.
BCF International, on the other hand, maintained its strong growth trajectory, achieving an 8 percent increase on a constant currency basis, resulting in revenues of P17.1 billion.
In contrast, the Agro-Industrial & Commodities group achieved sales of P25.5 billion, reflecting a 7 percent increase compared to the same period in the previous year. The growth was primarily attributed to higher sales volumes, partially offset by significant price reductions for both sugar and flour.
Income from operations rose 10%
Based on the company’s latest financial data, operating income growth during the first half outpaced the topline, increasing by 10 percent against the same period last year to end the period at P9.4 billion.
Notably, URC’s commitment to margin enhancement persisted, driven by easing commodity costs and impressive outcomes from its cost-saving initiatives.
Operating income growth and impairments in the previous year’s baseline contributed to an 8 percent increase in net income from continuing operations to P7.6 billion. Although operating income grew, higher tax provisions offset it, resulting in a 5 percent increase in core net income to P6.7 billion.
URC is the manufacturer of consumer household food brands such as Jack ‘n Jill for snack foods, C2 Cool and Clean for ready-to-drink tea, and Great Taste for coffee.