The Company
Century Pacific Food (CNPF) is the largest canned food company and exporter of private-label, original equipment manufacturer tuna products in the Philippines. It has a product portfolio of canned and processed fish, as well as canned meat and dairy. The company’s brands include: Century Tuna, 555, Blue Bay Fresca, Argentina, Swift, Wow, Lucky 7, Angel, Birch Tree, Kaffee de Oro and Home Pride. CNPF started in 1978 as a canning facility focused mainly on the processing and exporting of tuna caught in the Philippines. By 1983 it had become the largest Philippine tuna cannery and exporter. Shortly after it began its foray into the branded food business. In May 2014 CNPF listed on the Philippine Stock Exchange.
CNPF’s business operations are divided into four main segments: canned and processed fish, private label tuna export, dairy and mixes, and canned and processed meat. Canned and processed fish is CNPF’s largest business, which produces tuna, sardines and other seafood-based goods. This segment of the company contributed 40% of revenues in 2014. The private label tuna exports segment produces fish that is sold in North America, Europe, Asia and Australia, accounting for 19% of total revnues. The company’s dairy and mixes business produces evaporated milk, condensed milk, full cream powdered milk and all-purpose creamer, and accounted for 11% of revenues in 2014, while the canned meat segment produces corned beef, meat loaf, luncheon meat and other meat-based products and accounted for 30% of revenue. As of 2016 CNPF had five plants, located in General Santos, Laguna, Zamboanga, Cavite and Taguig. It has 270,000 points of sale, which include a variety of retail chains and markets.
Development Strategy
CNPF is well positioned to take advantage of rising consumer demand as the country is driven by domestic private consumption. It has market leadership in the canned food business, having the advantage of size and scale compared to its competitors. Its extensive marketing, research and development, and distribution network puts it ahead of its competition. CNPF’s multiple brands and products cater to wide range of consumers.
CNPF reported a 114% increase in net income in 2014 to P1.59bn ($35.3m) on the back of declining prices for raw materials. The gross profit margin was 26% while the net income margin was 8%. Branded revenues accounted for a high portion of sales, holding 78% of the Philippine market share. The canned fish segment continued as the main revenue contributor, with a 87% market share. Canned meat and dairy showed fast growth, but still only held a 47% share of the Philippine corned beef segment. Private-label revenues declined on weak fish prices. CNPF generated a return on equity of 26% and return on assets of 14%. Total assets stood at P11bn ($244.2m).
Looking Ahead
CNPF core brands are set to provide earnings stability, anchored on domestic consumption and the launch of new products. The acquisition of Century Pacific Agricultural Ventures (CPAVI) should provide additional income through higher-value products such as coconut water and virgin coconut oil. The Philippines is the third-largest producer of coconuts globally, according to the Asian and Pacific Coconut Community. The compound annual growth rate for 2001-13 for Philippine virgin coconut oil exports was 107%. The growing global demand for products with positive health benefits and the premiumisation of these products are big potential for the company. CNPF’s production and distribution network puts it in a good spot to take advantage of the recent acquisition. CPAVI will also benefit from CNPF’s expertise in private label exports.
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