Food manufacturer Universal Robina Corp. said it expects its Vietnam business to rebound in two to three years from the impact of a food scandal last year.
URC president and chief operating officer Lance Gokongwei said in an interview following the company’s annual stockholders meeting Wednesday the company was initially seeking to recover 60 percent to 70 percent of peak sales this year.
Its Vietnam business hit peak sales of $20 million to 25 million in early 2016, but sales tumbled to $2 million to $3 million after the Ministry of Health in May 2016 issued a ruling to recall one batch of C2 Lemon 350 ml (manufactured on Feb. 4, 2016) and one batch of Rong Do cup 240 ml (manufactured on Nov 10, 2015).
“We looking at two to three years before we can get back to that level,” Gokongwei said.
Gokongwei said the company already relaunched C2 and Ron Do as high-quality brands of URC with a fresher look and packaging.
The group also plans to rebalance its overall product portfolio in Vietnam to minimize risk by strengthening both beverage and snack food categories.
Gokongwei said that in the Philippines, URC would have a stronger focus on the quality of products while simplifying business structure. It also plans to see fewer product launches, with more focus on products with greater chance of success and higher margins.
URC recently sold its Philippine license for Hunt’s, the country’s leading pork & beans brand to Century Pacific Group Inc.
“We want our products to be focused on our strategy which is ‘ready-to-go food’ whether snacks or beverages. Hunt’s didn’t fit in in that category because it requires home preparation. We want products that can be consumed on the go,” Gokongwei said.
Gokongwei expressed concern over the government’s move to implement higher taxes on salty snacks and sweetened beverages, which were the core business of the group.
“The effective increase we are looking at is P10 per liter in a per capital income of $3,000. We always cite Mexico where the effective tax rate is P1.45 per liter and their per capita income is $10,000. So the effective proposed tax here is six times higher than what was proposed in Mexico,” Gokongwei said.