• Utilisation of recently acquired assets in the Philippines will be boosted with 3 year deal
SINGAPORE - 2 March 2006 - Petra Foods Limited (“Petra Foods” or the “Group”), one of the world’s major manufacturers and suppliers of premium cocoa ingredients and branded consumer confectionery products, today announced that it has concluded discussions with Nestle Philippines’ Inc (“Nestle Philippines”) and signed an agreement (the “Agreement”) to manufacture and distribute Nestle branded confectionery products in the Philippines.
The Agreement follows Petra Foods’ acquisition of the chocolate confectionery manufacturing plant and sales and distribution assets from Nestle Philippines and its subsidiary, Goya Inc (“Goya”). To recap, the significance of this acquisition is that it not only includes the manufacturing assets but more significantly, existing key brands (“Knick Knacks” and “Goya”); the manufacturing expertise for chocolate and sugar confectionery which can be leveraged on; and the existing sales and distribution network in the Philippines. Pursuant to the acquisition of the Philippines assets, Petra Foods will also be taking over the inventory valued at US$2.4 million.
The transaction in the Philippines will serve to further strengthen Petra Foods’ capabilities and more fully utilise existing capacity in the Group’s Philippines production assets.
The Philippines is the second largest confectionery market in the ASEAN region and this Agreement will further strengthen Petra Foods plans to become a significant chocolate confectionery player in the Philippines. According to industry statistics, chocolate confectionery sales in the Philippines was valued at US$239 million in 2004.
Mr John Chuang, CEO of Petra Foods said “This is another major opportunity for Petra Foods to add further depth and breadth to its Branded Consumer business. This transaction further strengthens an already good business relationship with the Nestle group.
Indeed, the Group’s efforts to add new markets to further grow its Branded Consumer business are already delivering results. Mr Chuang added, “While the Group continues to expand its strong foothold in the Indonesian chocolate confectionery market, it has also increased its Branded Consumer revenue contribution in other markets from 7% in FY2004 to 14% for the year ended 31st December 2005. This Agreement will further add to the diversification of our revenue streams outside Indonesia.”