CENTURY Pacific Food, Inc. (CNPF) said it has earmarked up to P5 billion as its capital expenditure (capex) budget for 2024, an increase from the previous year, aimed at boosting its coconut business.
“Our 2024 capex budget is around P4 to P5 billion, which is a big jump from 2023 and prior numbers. One main activity here is that we are increasing our coconut processing capacity. That’s taking a significant chunk, about half of our capex this year,” CNPF President and Chief Executive Officer Teodoro Alexander T. Po said during the company’s virtual annual stockholders meeting on Monday.
In 2023, CNPF allocated up to P3.5 billion as its capex budget to fund the expansion of its meat, pet food, coconut, and packaging manufacturing businesses.
“The other half of capex will continue to go to 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. Lastly, there are special efficiency and environmental sustainability projects that we also budget some capex for,” Mr. Po said.
Mr. Po said the company is already in the mid-stages of completing the expansion of its coconut processing due to surging demand.
“We’ve been getting more demand from our principals in the United States and in Southeast Asia. This latest capex will roughly increase our (coconut processing) capacity by about 25%,” he said.
“This is just the first stage of the expansion and if market trends continue, we expect to be double our current capacity in five or seven years from now,” he added.
CNPF previously committed $40 million to expand its coconut processing capacity. The expansion aims to serve both its original equipment manufacturer and domestic coconut business with room for growth.
The commitment is part of an expanded agreement with US-based beverage firm The Vita Coco Company, Inc., which requires approximately 90 million liters of coconut water over the next five years.
For the first quarter, CNPF recorded a 15% growth in its attributable net income to P1.72 billion as total revenue surged by 16% to P18.2 billion.
CNPF shares rose by 2.95% or 95 centavos, ending at P33.10 per share on Monday. — Revin Mikhael D. Ochave