question archive Restituto Dimaalis is VP Corporate Planning of Philippine Canning Corp

Restituto Dimaalis is VP Corporate Planning of Philippine Canning Corp

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Restituto Dimaalis is VP Corporate Planning of Philippine Canning Corp. (PCC), one of the biggest fish canning companies in the Philippines with Sales of about PhP 12.0 B in 2012.  Its main product is tuna with the cannery located in General Santos City, South Cotabato.  Its secondary product line is sardines with the cannery located just outside Zamboanga City.  The company's head office is located in Makati.

 

Reviewing company performance over the past few years, Resituto thought the picture looked good.  The cannery in Gen San, together with the corresponding fish port was new, having been completed 5 years ago.  The company had invested a little over PhP 500.0 M in this project but it seemed to be paying off both in terms of increased efficiency as well as capacity.  Most of the machinery and systems (60% of cost) was financed through 10 yr. US$ denominated debt while 30% of the balance was funded through long term PhP denominated debt and the rest through Retained Earnings. The sardine cannery in Zamboanga had just been refurbished with modern equipment, the company having borrowed US$ 2.0 M in long term debt to finance it.  However, efficiency and capacity were up also.  The company had also just concluded negotiations for the supply of tin for their cans for terms that were quite favorable with a supplier in Indonesia. Additionally, Operations have been evaluating alternate forms of packaging such as vacuum packing and biodegradable plastic wraps and containers.

 

The company exported about 10% of its tuna produce while the rest was sold on the local market, which as of the present time, the company was garnering an 82% share. There are 5 other companies canning and selling tuna. This concerned Resty a bit because this figure was down from 90% three years ago.  This meant a decreasing market share in a market increasing in volume of about 5% per year, but it was comforting that they were still THE very dominant player.  Their sardines cornered 23% of the market which, given the number of players in the market, was the most dominant.  The products reached the market via a structure of wholesalers who were backed up quite strongly with advertising and promotional activities undertaken by the company.  On the average, collections from these wholesalers were between 30 and 45 days.

 

Of concern also was the fact that the tuna catch had been dwindling over the years and was expected to decrease further.

 

In formulating Long Term Objectives and a Strategic Plan, what factors does Resty have to consider? Why and what would their significance be?

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