May 15, 2008

Alaska Milk to reformulate dairy products

Philippine dairy giant Alaska Milk Corporation will reformulate its products and explore other opportunities in an aim to mitigate the impact of increasing production costs.

At the sidelines of the company's annual stockholders meeting on May 14, Alaska president and chief executive officer Wilfred Uytengsu Jr. said the reformulation strategy may require the reduction of the amount of milk powder that will go into the firm's products without compromising quality.

The CEO added the reformulation is needed to "find ways to keep milk affordable with the impact of inflation."

Uytengsu said another strategy that the company may commence is to downsize certain packaging such as sachets to keep its products affordable.

He pointed out that prices of tin plate have grown 40 percent on-year while skimmed milk powder, a key raw material for Alaska's products, doubled in 2007 due to the imbalance in global supply-demand conditions.

Uytengsu still remains optimistic that the company will sustain its volume and earnings growth this year with the launch of new products that is seen to appeal to various segments of the market.

The CEO adds the company will continue implement marketing initiatives to further improve brand visibility and drive volume growth.

Aside from this, Alaska intends to explore untapped market segments and other high-growth categories of the industry with new products that are aligned with the needs of consumers.

For the first quarter this year, Alaska reported a 49.4 percent decrease in net profit to P86 million (US$2 million) from P170 million (US$3.95 million) the previous level. This is equivalent to earnings per share of P0.09 compared with P0.18 the same period a year ago.

US$1 = P42.93 (as of May 15, 2008)