URC CLAIMS GREEN TEA DRINK 'C2' OUTSELLS COKE; SETS $60M EXPANSION

MANILA, January 24, 2006
 (MALAYA) BY VG CABUAG - Claiming that its green tea drink C2 now outsells Coke, Universal Robina Corp. is budgeting $60 million (P3.13 billion) to expand its Philippine and Vietnamese plants.

B.J. Sebastain, director of corporate planning of URC, claimed in an investors’ briefing yesterday that "C2 now outsells Coke".

That must mean sales of over P30 billion since Coke sells this much in 2003.

Lance Gokongwei, president and chief operating officer, said URC will

spend $100 million (P5.3 billion) this year as it tries to further gobble up the beverage market from softdrink manufacturers.

Worldwide, there is a trend of consumers shifting to healthier drinks preferring bottled mineral water and juices over sodas.

C2 introduced for little less than a year had been enjoying brisk sales so much so that its plants are unning 24/7 according to URC officials.

Gokongwei, president and chief operating officer, said some $60 million is being earmarked to expand its beverage lines in the Philippines and Vietnam, particularly the manufacturing of C2 green tea drinks.

This week, Gokongwei said they will commence operation of another C2 line in Calamba.

Gokongwei said $25 to $30 million will be allocated for the upgrade of several of its sugar milling and refineries, where three quarters of the output was sold to the branded consumer food group.

The remaining $10 to $15 million was intended for the general corporate purposes, he said.

Gokongwei, whose family business has been in an aggressive investment mode during the past few years from telecommunications to transportation to food, said part of the money will come from the primary and secondary offering of shares to the international and the local market.

"URC has always been our flagship company," he said.

URC officials started yesterday a four-nation roadshow for the primary share offering. URC officials started with Hong Kong, then off to Singapore, London, and San Francisco in the United States.

The roadshow will market the 634 million share offering, 282 million of which were primary shares, of URC. Some 95 percent of the shares is being sold to international investors and only 5 percent to the domestic market.

The new offering dilutes the JG Summit’s shareholding in URC from the current 86.2 percent to 59.3 percent. Other minority shareholders that will be diluted include Express Holdings, Inc. Robinsons Supermarket Corp., and Araising ASEAN Fund Ltd.

Gokongwei earlier said the issuance of new shares is intended to "unlock" the value of URC since it has limited number of issues currently floated in the stock market, and it will pave a way for the company’s relaunch sometime this year.

"Due to its limited free-float and shareholder base, the market is currently not valuing URC shares properly. We believe that in order to unlock the value of URC, the free float should be improved with adequately-size offering, marketed to a broader base of international and local institutional investors," Gokongwei said.

The offer price of the new shares will be between 0 to 10 percent of the prevailing market price of URC. Its shares yesterday closed higher at P20.50.


Chief News Editor: Sol Jose Vanzi

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