Tanduay spending P1B to boost production

MANILA, Philippines - Listed liquor maker Tanduay Holdings, Inc. is spending P1 billion this year as it expands and upgrades distilleries and puts up more lines to boost production. Following the company’s stockholder’s meeting on late Wednesday afternoon, Tanduay President Wilson T. Young said the company would double Asian Alcohol’s capacity and fine-tune distilleries of Absolut Chemicals to produce more refined alcohol. "The purer the alcohol, the lesser chances of hangover," he said in an interview. Tanduay, Mr. Young said, has put up additional lines at its Cabuyao, Laguna and Cagayan de Oro plants. The company has four plants that collectively occupy 500,000 square meters of land. The Cagayan de Oro plant, valued at P600 million, is the company’s most recently completed acquisition. Meanwhile, Tanduay said first-quarter consolidated net income more than doubled to P191 million from a year earlier. The company traced the growth to a quarter rise in liquor sales to 4.6 million cases. Tanduay Five Years Rhum posted double-digit growth, while new products Barcelona Brandy and Cossack Vodka rose by 583% and 61%, respectively, it said. Tanduay is also steadily increasing its market share in the Luzon market as sales in the area increased by 17% due to a marketing campaign that focuses on the younger segment of the liquor market. Mr. Young said the campaign, which started in 2006, strengthened its hold on the Visayas and Mindanao markets. "The drinking age is maybe 14 or 15 years old especially in the provinces. In some provinces, that’s their initiation into manhood," he pointed out. The Tanduay Rhum maker started operations in 1854 in a compound off the banks of the Pasig River. In 1988, Twin Ace Holdings Corp., owned and managed by the Lucio Tan Group of Companies, acquired Tanduay from the Elizalde family. - Lovely Nica P. Lee, BusinessWorld