August 17, 2007

Profits for Philippine's Alaska Milk doubles as global milk demand surges

Although net income more than doubled for the first half of 2007, Alaska milk is warning that tight supply would impose limits on industry expansion for the next year.

Net income reached P399 million in the first half, up 156 percent from P156 million in the same period last year, due mainly to increased sales and selling prices, Company president Wilfred Steven Uytengsu Jr. said

Net sales rose 45 percent to P3.96 billion from P2.74 billion, he said.

The dairy industry continued to face increased costs as supply failed to keep up with demand, especially in view of rising milk demand in China, he added, noting that skimmed milk powder has more than doubled from its price last year to over US$5,000 a tonne.

Severe drought in Australia, the top global milk supplier and record low herd numbers in New Zealand are also worsening the milk shortage.

This shortage is expected to last for the next several years as ratcheting up milk production would take time, he said.

Uytengsu expressed an optimistic outlook for the company. Besides higher selling prices, the company has also benefited from its acquisition of several liquid milk brands from Nestl¨¦ earlier this year, he said.

The deal doubled Alaska Milk's share of the Philippine dairy market to 90 percent.