Notable local and global canned sardine brand, Mega Prime Foods Inc., is seeking government intervention as the company said it can no longer cope with the rounds of fuel surges, substantially affecting production and leaving it with stocks only good for two weeks.
Mega Prime’s critical situation is far removed from recent pronouncements made by President Ferdinand Marcos Jr. and the Department of Trade and Industry (DTI) that food manufacturers have enough inventory of staple canned goods for a month or two.
In a telephone interview on Friday, Mega Prime Foods’ chief growth and development officer, Marvin Tiu Lim, said Mega Prime simply cannot comply with the price freeze being requested by the government, as the cost of fuel and other needed raw materials has been surging in recent days, doubling, in fact, he said, due to the conflict in the Mideast.
Cannot cope with the fuel crisis
Asked by the DAILY TRIBUNE if they can still cope with the fuel crisis, Lim replied, “We cannot; we only have two weeks’ stock inventory left.”
He said they are having a hard time catching fish because of the cost of fuel used by their hundreds of vessels.
“Fish catch is low also. Diesel is too much, and some fishing companies are stopping operations. We need government support,” he said.
Mega Prime currently operates over 100 deep-sea fishing vessels manned by nearly a thousand fishermen for catching sardines and other marine species in Mindanao waters.
Despite this, Tiu Lim said they have no concrete plans whether they will raise prices, as their decision “depends on the war.”
He also said their company is not contemplating retrenchment.
Mega Prime last year said the company was investing over P1 billion for projects aimed at international markets expansion.
Sufficient inventory
Meanwhile, Century Pacific Food Inc., which produces half of the nation’s total volume of canned foods, disclosed that it has sufficient inventory and production capacity to continue serving Filipino homes.
However, Century Pacific’s executive vice president and CEO, Gregory Banzon, said operations indeed was being affected by various global disruptions, particularly rising fuel prices due to the ongoing geopolitical tensions in the Middle East.
“Fuel is an integral part of our distribution cost. Roughly 84 percent of the cost goes to fuel, and they have been increasing for the last two weeks. In terms of our inventory, in the supermarkets, we have two to three weeks, while here in our warehouses, we have around 1.2 to 1.5 months. For raw materials, we have one month. If you put them together, maybe they could last for 45 days,” Banzon told reporters.
Century Pacific was one of the many companies that vowed to keep their prices at the status quo for a month after a recent meeting with Trade Secretary Cristina Roque.
Suppliers asking for price increases
In keeping their stocks, Banzon said the company expanded its suppliers. However, he revealed that some of their suppliers are already asking for an increase in terms of pricing because of supply chain woes.
“Our supplies are not only coming from Asia, as we have activated our suppliers in Europe, the US and Oceania to make sure that there will be a diversity of materials. That is the most critical part, acquiring raw materials at the right price and time so that we can continue to serve the Filipino consumers at a lower price,” he said.
Banzon said the company has already implemented measures to cut costs on daily operations, which, hopefully, it could maintain for a month or two.
Still, Century Pacific chief executive officer Ted Po, maintained that the firm has sufficient inventory and production capacity.
Fully operational and capable of meeting demands
The company said its manufacturing and distribution network remains fully operational and capable of meeting consumer demand nationwide across its core brands.
Century Pacific noted that while geopolitical tensions can create volatility in oil, shipping, and commodity costs, the company has successfully navigated similar disruptions in the past, including supply chain pressures during Covid-19, the Russo-Ukrainian war, and earlier Gulf conflicts, through disciplined planning, diversified sourcing, and strong operational execution.
“Even during past crises, we have continued to operate reliably to ensure that essential food products remain available in the market,” Po said.
Canned food stocks remain ample — Marcos Jr.
President Ferdinand Marcos Jr., during his inspection at the Century Pacific storage facility on Friday in Calamba City, Laguna, assured that the staple sardines, among other canned goods, remain ample for the country’s consumption.
He said the facility, while it has enough supply, is just 10 percent of the total capacity of CPFI.
“This means that most of our food processors at retailers have enough stock. Aside from that, this company agreed to keep their prices for a month, while some offered two months,” he said.
Marcos Jr. said that despite this volume, the government continues to monitor the supply of basic necessities and prime commodities.
“Filipinos need not worry about the supply because we have a sufficient stock. We have to thank the private sector. We continue to monitor other manufacturers through the DTI,” according to the President.
Secretary Roque said that to date, the DTI has not yet received any report of profiteering or hoarding from consumers, adding that there is no reason to panic.
The Trade chief was also directed by the President to ensure a stable food supply through constant coordination with food manufacturers and suppliers.
“The President’s directive is to constantly communicate with the manufacturers and the different industries to make sure that there will be enough supply for the people,” Roque said.