May 17, 2011

CDO Foodsphere may jack up meat products

Philippine meat processor CDO Foodsphere, Inc. is considering another round of price hikes as the firm continues to grapple with rising input costs, an official said late last week.

CDO Foodsphere president Jerome D. Ong said the increase in commodity prices continue to be abated.

He said though that it is difficult to project by how much the prices of its products would go up since it would depend on the increases in commodity prices.

CDO Foodsphere already raised the prices of all its products in March by 3% to 5% due to an increase in the price of raw materials, Mr. Ong said.

Ong added that they may result to flat growth performance this year if they are forced to increase prices by another 5%.

This will be a step down from the average 10%-15% growth the company had enjoyed from 2005 to 2010, he said.

The executive blamed climate change that made farm output unpredictable and a shortfall in harvest would lead to higher cost of feeds and livestock as well.

The company, however, is already preparing "efficiency improvement measures" to cope, he said.

CDO Foodsphere was established in 1975 as a backyard meat processing operation in Valenzuela City.

Its products include CDO Karne Norte, CDO Bibbo! Hotdog, CDO Holiday Ham and San Marino Corned Tuna.

Earlier this year, the firm was slapped with a PHP1.1-billion (US$25.38 million) smuggling charge for allegedly undervaluing imports. Rolando Juan Cruz, assistant vice-president of CDO-Foodsphere, and Customs broker Romeo G. Lerit based in Escolta, Manila allegedly conspired to undervalue 207 buffalo meat imports from India in October 2009 to March 2011.

The firm has countered, however, that the validation of the information had not been concluded and the charges were "premature at best."