MANILA — Listed agribusiness firm Vitarich Corp. is earmarking PHP130 million in capital expenditures (capex) next year in an effort to expand its production capacity and achieve a target revenue growth of more than 30 percent.
The company allotted about PHP80 million in capital spending in 2017.
Vitarich President and Chief Executive Officer Ricardo Manuel Sarmiento said next year’s capex would be spent primarily on warehouse and support for its feed mills.
“Our capacities are full. That is why we are excited with the new feed mill (in Davao) that we just inaugurated and automation of the feed mills in Iloilo, plus the doubling of the capacity of our Davao dressed plant. All of which were completed end of third quarter so we are quite excited and ready for next year,” he told reporters on Tuesday.
Sarmiento said its poultry and animal feed segments would continue to drive business growth next year.
The pioneering food, animal feeds and livestock company booked a net income of PHP107 million in the first three quarters of 2017 from a measly PHP5 million during the same period last year.
Sarmiento attributed the three-quarter profit growth to robust performance of the company’s poultry and animal feed business, as well as lower input costs, due to enhanced efficiency of poultry operations and lower prices of raw materials.
Meanwhile, the company announced it will undertake another round of debt-to-equity conversion and undergoing quasi-reorganization.
The debt-to-equity conversion, its second in four years, worth PHP400 million, will be done to eliminate the company’s remaining debt.
Vitarich pursued a debt-to-equity conversion agreement four years ago that wiped out a substantial portion of its debt, a process which led to its complete and successful rehabilitation.
Sarmiento said the quasi-reorganization would allow Vitarich to eliminate its deficit, which totalled PHP2.417 billion as of end-2016.