Iligan City—Pilmico Foods Corp., the food arm of the Aboitiz group, plans to increase flour exports to take advantage of the Association of Southeast Asian Nations economic integration.
Pilmico vice president for operations for Iligan plant Florencio Sebandal said in an interview the new flour packing plant catering to the exports market was expected to be completed by the end of the year.
“The requirement of the export market is quite complicated, so we have to have a packing line that is dedicated for the export market,” Sebandal said.
“The most important thing that we will be able to achieve once the plant starts its operations is we can have a dedicated plant solely for the exports market. There’s a special requirement for the export flour that we cannot afford the local flour to contaminate,” he said.
Pilmico exports about 2,000 tons of flour a month to Hong Kong, Vietnam, Myanmar, Malaysia, Indonesia and Thailand.
Sebandal said the plan was to double the volume of exports once the packing plant started operations.
“Our biggest market for exports right now is Indonesia. But we also supply flour to Yellow Cab, Jollibee, JVO, Gardenia, Rebisco and Zest-O,” Sebandal said.
Sebandal said Pilmico was focusing on the export market as the company could not expand in the domestic market given the Asean integration.
“We have the Asean integration and right now cheaper flour is now in the Philippines so that’s the reason why we cannot grow here. We are seeking growth through the export market,” Sebandal said.
Sebandal said imported flour was cheaper by P100 a bag, making it difficult for the company to compete with imported products.
This means that while imported flour is a little bit cheaper, quality is relative, he said. "In reality, prices of flour are difficult to compare because they differ in quality and grade," he said.
“Our volume here was being eaten up by the imported flour. Some are also building their flour mill here in the Philippines,” Sebandal said.
Sebandal said the company was studying plans to export flour to other markets outside Asean.
“Right now, we have a business development team that is looking at opportunities here and abroad,” Sebandal said.
The Iligan flour plant produces 800,000 bags of flour monthly. Sebandal said 40 percent of the production goes to Mindanao while 30 percent goes to Luzon.
Aside from flour, Pilmico also produces feeds for poultry, swine and fowl.
“Most of our feeds go to Mindanao and Visayas. Right now, we have plans for export,” Sebandal said.