July 4, 2013

 

Following the successful launch of their products in the local market, Grupo Leche Pascual (GLP), based in Madrid, is considering the possibility of building a factory in the Philippines, which will be used to produce pasteurised yogurts, depending on local demand for the product in the next year or so.

 

GLP launched a variety of yogurt products in the Philippines in 2012, and according to the company, demand exceeded expectations in the first quarter of 2013 - to the point that they ran out of stock from initial shipments.

 

"We are now focused on the Philippines," said Tomas Melendez, Director of International Division at GLP, who believes the country could be an ideal gateway for their business in Southeast Asia. "It's very important because Philippines will be the door to open Asia, and in particular, as a base for the ASEAN region. We are doing a wonderful launch of the product and when we reach a certain volume, we will think in the future of the possibility to build a factory in the Philippines."

 

A new factory, which takes one to three years to develop, will be a welcomed investment for local communities, offering the possibility of employment as well as capital injection for the burgeoning Philippine economy.

 

"Every business needs to grow in order to provide opportunities," said Tomas Pascual Gomez-Cuetara, President of GLP. "Our most important projects right now are the international efforts. Not only exporting from Spain, but developing markets and implanting ourselves in those markets. That's why we are so focused and provide so much energy to the Philippine project that we are beginning to develop."

 

GLP is working with local business partners in emerging markets as part of their international strategy. In the Philippines, the company has chosen to work with Asia Brewery Inc (ABI) owned by the prominent Tan family, which includes dozens of well-known brands in its portfolio from airlines to banks and beverages. "ABI for us is a great corporation: it's a family company, and both our companies think in the long-term. We have to partner with a wonderful distribution with the same way we do business. Our strategy is to create a joint venture through 50/50 with local partners."

 

GLP, which has been producing dairy products since 1969, has an annual average output of 436.9 million litres of packaged dairy products, 403 million litres of bottled water, 29 million litres of juice, and 48.6 million litres of soy-based beverages. It has created a recognisable brand in Spain and is now present in 70 countries, predominantly in Asia, South America and Africa.

 

"For our business, emerging markets are the most important. It's almost 80% of our business," Melendez revealed. "We are growing more than 25%, and now we are building a factory in South America, and we are thinking of opening other factories in different parts of the world."

 

GLP's interest in the Philippines follows a recent surge of direct foreign investments into the country, which rose by 8% in 2012 according to official government figures, reaching a healthy US$2 billion sum.

 

This has been largely attributed to positive developments in the country's economy in recent years, as well as the relative stability and transparency of the socio-political landscape under the administration of President Benigno Aquino III.

 

The Philippine Stock Market, for instance, grew by 30% in 2012, supported by a strong Philippine peso which reached record levels of exchange rates against foreign currencies, peaking at PHP40.87 against the US dollar in November 2012.

 

In 2013, the Philippine economy continues its good streak with a 7.8% growth in the first quarter, the fastest in the whole of Asia for this period, beating the performance of larger economies like China. Last month, global financial service company Nomura also labelled the Philippines as a "low risk" zone for investment in terms of macroeconomics, alongside neighbouring Taiwan.

 

Furthermore, the government continues its public battle against corruption, as well as its drive to attract more investments into the country through various incentives and initiatives.