Aboitiz Group to expand business units in the Asean

·3 min read

THE Aboitiz Group is aiming to make its food business as one of the big contributors to the company’s growth as it solidifies its footprint in the Association of Southeast Asian Nations (Asean).

“Our food business is expanding in the Asean. We will continue to expand in the Asean. We are focused on making food a bigger part of Aboitiz,” said Sabin Aboitiz, president and chief executive officer of the Aboitiz Equity Ventures (AEV).

AEV’s non-listed food subsidiaries’ income contribution to AEV amounted to P969 million for the first three quarters of 2020, five percent lower than the P1 billion recorded in the same period in 2019. From January to September, 52 percent of the food group’s earnings were generated outside the Philippines.

Pilmico president and chief executive officer Tristan Aboitiz said the group’s flour and feed retail businesses held quite steadily at the height of the pandemic as most of its distributors remained operational even during the varying stages of lockdowns in the country.

It was the meat segment though that dragged the food group’s growth due to the industry-wide effect of the African swine fever and later on the closure of restaurant and hospitality sectors during the government-imposed lockdowns due to the Covid-19 pandemic.

“The big change we saw was in farms and meat business because prior to the pandemic our target was really business-to-business, engaging with catering companies, hotels, restaurants and, with the onset of the pandemic, these were the first sectors that slowed down,” said Tristan.

The firm quickly pivoted its marketing initiative to a business-to-consumer approach. It set up its own thegoodmeat.ph website in the first month of the pandemic and brought its meat products to online shipping sites like Lazada and Shopee.

“These enabled us to recover the lost sales in the Horeca segment,” said Tristan. “The e-commerce platform allowed us to engage with our consumers locked in their homes.”

Moreover, despite the pandemic, the food group prioritized vital capital expenditures to protect its bottom line.

The farm business’ planned expansions in Northern Luzon have been recalibrated in 2020 and the food group has started looking for opportunities in the Visayas and Mindanao. Its sow-level capacity is still expected to reach 29,000 heads by 2030.

The food group has also started operating its meat fabrication and processing plant, which will provide more stability in profitability through selling high-margin pork meats compared to live hog selling.

The group’s third feed mill in Iligan will be operational this month. This is expected to serve the growing requirements of its Visayas and Mindanao customers.

Besides making food big in the Asean, Sabin also wants the group’s other business units to broaden their horizon.

“We want to do this with the rest of the businesses too, which is to go out in the Asean,” said Sabin.

Amid the ongoing challenges posed by the Covid-19 pandemic, the various business units of the Aboitiz Group expect to maintain their momentum and proceed with their projects and plans for the year.

“Despite the headwinds of the first nine months, the Aboitiz Group’s business continuity plans have proven effective and will remain in place as we continue to exhibit resilience in our operations toward the end of the year,” said Sabin.

AEV said its net income in January to September fell 35 percent to P4.4 billion from last year’s P6.8 billion. (KOC)