IV.

Corporate Level Strategic Factors

Directional Strategies

 Growth Strategies

Horizontal Growth

The Company intends to continuously expand the production and distribution of the branded consumer
food products internationally through the addition of manufacturing facilities located in geographically
desirable areas, especially in the ASEAN countries, the realignment of the production to take advantage
of markets that are more efficient for production and sourcing of raw materials, and increased focus and
support for exports to other markets from the manufacturing facilities. It also intends to enter into
alliances with local raw material suppliers and distributors.

Concentric Diversification

The Universal Robina Corporation adopted Concentric diversification strategy when it intends to
continuously introduce innovative new products, product vibrant and line extensions in the snack food
(snacks, biscuits, candies, chocolates and bakery), beverage and grocery (instant noodles and tomato-
based) products. This fiscal year alone, the Company’s Philippines Branded Consumer Foods has
introduced 41 new products, which contributed to sales growth. The company supports the rapid
growth of the business through line expansion construction and acquisition of plants. The company
acquired a plant facility in San Pedro, Laguna to further enhance its production and warehouse
capacities.

URC took steps to expand its profile overseas and the region, with the acquisition of New
Zealand Snack Foods Holdings Ltd., which owns Griffin’s Foods, New Zealand’s biggest snack foods
maker, for $609 million. The Company develops new products and variants of existing product lines,
researches new processes and tests new equipment on a regular basis in order to maintain and improve
the quality of the Company’s food products. In Philippine operations alone, about P=91 million was
spent for research and development activities for calendar year 2017 and approximately P=32 million
and P=87 million for the three-month period ended December 31, 2016 and fiscal year 2016,
respectively.

The Company has research and development staff for its branded consumer foods and
packaging divisions located in its research and development facility in Metro Manila and in each of its
manufacturing facilities. In addition, the Company hires experts from all over the world to assist its
research and development staff. The Company conducts extensive research and development for new
products, line extensions for existing products and for improved production, quality control and
packaging as well as customizing products to meet the local needs and tastes in the international
markets.
  Stability Strategies

URC’s financial and operational capabilities and its development in one of the most well respected
and profitable company in the Philippines. It is clear that URC is a stable company and that it would
continue to grow and become more diverse because of its strong foundation and qualities as a
company.

Profit Strategy

The company’s financial history, has found that throughout the years, this company continues to
grow and further develops itself to becoming a successful entity. URC as the company has a profit
strategy like for example when comes to cut its cost of goods sold in order to generate more profit for
themselves. It continues to increase their revenues from $71.2 billion to $81.0 billion. It can easily be
said that investing in this entity is beneficial to the investor. Because of the company’s performance
through the years, an investor can be secured in investing since he has a guarantee that it shall receive
more money in dividends and in capital appreciation. It can be assured that URC is stable and will not go
bankrupt. URC has declared itself ready for the competition when the time comes. Since it knows that
demand for their products is high in other countries such as Vietnam, and it chose to expand their
company to produce more branches. Also it looks for a collaborative effort, rather than seeing problem
to avoid.

 Retrenchment Strategies

Turnaround Strategy

UNIVERSAL ROBINA Corp. (URC) reported a 23% drop in net income attributable to the parent in the
second quarter, amid continued challenges in its branded consumer foods business in the Philippines
and Vietnam. A regulatory filing showed the Gokongwei-led food company’s attributable net income fell
to P2.88 billion in the April to June period, from P3.8 billion during the same period a year ago. This
brought its first-half profit to P6.38 billion, 14% lower than the P7.4 billion a year ago. For the second
quarter, URC’s net sales rose 12% to P30.1 billion, but outpaced by the 14% increase in cost of sales to
P20.7 billion.

Three phases strategy

Contraction

URC reported six-month sales of branded consumer foods in the Philippines, excluding packaging, was
flat at P29.311 billion, “as favorable results of snack foods and joint ventures were offset by the double-
digit decline of beverages.” Sales of snack foods, which include Piattos, Chippy, Cloud 9 and Presto,
jumped 9.4% in the January to June period, while its joint venture businesses, which include Nissin and
Danone, grew 22%.
First-half net sales jumped 10% to P60.79 billion, which URC attributed to “strong performances of
branded consumer foods Thailand, farms and sugar & renewables, and the additional sales of Snack
Brands Australia (SBA).” Cost of sales during the January to June period also went up 11% to P41.53
billion. due to higher input costs.

Consolidation

In April 2019, URC formed a Global Exports business unit tasked with the worldwide distribution
of both URC Philippines and URC International sourced products. The strategy brought about the
integration of URC’s regional sales teams, allowing the consolidation of the company’s previously
separate export departments into one global export team. This streamlining of operations provides the
company with better access to its network of customers in more than 50 countries. At present, URC’s
Global Export business unit serves nations and territories in North America, Europe, the Middle East,
Africa and Indian Ocean islands, North Asia, and Oceania and the Pacific Islands.

The consolidation is further expected to maximize URC’s sales resources and manufacturing
capabilities, allowing URC to better serve its current distributors and retail partners in existing markets,
while providing opportunities for the company to explore new business channels. Through its
centralized Global Exports unit, URC seeks to build global awareness for its brands, enter new territories
and explore untapped business opportunities, and enable organic growth. Underlining the consolidation,
the central Global Exports unit will promote and sell URC products worldwide under one official catalog.

Rebirth

No matter where their products turn up, whether it’s on a store shelf in Manila or somewhere halfway
around the globe, customers can rest assured that they were produced in strict compliance with
established global manufacturing standards, not only in terms of food safety and quality, but also with
sustainability and its workers’ environment, health, and safety (EHS) in mind.
V. Analysis of Strategic Factors

 SWOT Analysis

The SWOT analysis of Universal Robina Corporation, one of the largest branded food producing
companies in the Philippines, generally focuses on its strengths, weaknesses, opportunities for
improvement and threats to the company.

Universal Robina Corporation (URC) is a food and beverage company based in the Philippines.
Dominant Market Leadership, Broad Product Portfolio, Existing Distribution and Sales Network, Good
Governance, Employees, Products, Loyal Consumers, Innovation, Supply Chain, Market Position are the
company’s key strengths, whereas Competitive Market, Geographical Concentration of Revenues, Weak
Online Presence, Operation Performance, Debt Ratio, Outdated Technology remains an area of concern.
Going forward, Technological Advancement, Consumers’ Purchasing Power, Stringent Regulation Power,
Changing Consumer Preference could affect the company’s business operations. In the future, Economic
Growth, Growth rates and Profitability and Global Markets are likely to provide growth opportunities to
the company.

Universal Robina Corporation SWOT Analysis

STRENGTHS WEAKNESSES
 Dominant Market Leadership  Competitive market
 Broad Product Portfolio  Geographical Concentration of Revenues
 Existing distribution and sales network  Weak online Presence
 Good Governance  Operation Performance
 Employees  Debt Ratio
 Products  Outdated Technology
 Loyal Consumers
 Innovation
 Supply Chain
 Market Position

OPPORTUNITIES THREATS
  Economic Growth  Technological Advancement
 Growth rates and profitability  Consumers’ Purchasing Power
 Global Markets  Stringent Regulations in the Philippines
 Changing consumer Preference

Universal Robina Corporation -SWOT Analysis

STRENGHTS

Dominant Market Leadership

The company is a dominant player in the Philippines with leading market shares in most of the
product categories it is involved in. URC is a pioneer in the snack food industry in the Philippines through
the launch of Chiz Curls and Chippy. From this first venture into savory snacks, URC developed the
largest and most diverse portfolio of snack food products in the Philippines. It is the market leader in the
snacks, candies, chocolates, cookies, and pretzels markets. The company is a dominant player in the
savory, snacks, candies and chocolates markets, and a significant player in biscuits market, with leading
positions in cookies and pretzels sectors. URC is also the biggest player in the RTD tea market in
Philippines. It holds second position in the coffee and noodles business in the country. The company
also holds leading positions in various categories in Thailand, Malaysia, Singapore, Indonesia, Vietnam,
China, and Hong Kong markets. URC has commenced building its Jack ‘n Jill and C2 mega-brands across
the ASEAN as well with a market leading position in both biscuits and wafers in Thailand and the number
one RTD tea brand in Vietnam. Dominant market position enables the company to attract new
customers and venture into new businesses.

Broad Product Portfolio

URC offers a broad portfolio of convenience food products. The company's food and
beverage portfolio includes savory snacks, biscuits, cakes, candies and chocolates, ready to
drink teas, juices, bottled water, sports drinks, blended coffee, creamer, RTD coffee, instant
coffee, pasta and noodles, among others. The company’s Packaging Division produces and sells
a wide range of Bi-axially Oriented Polypropylene (BOPP) films that are used for packaging
consumer products. URC is involved in production of branded feeds, and animal health
products. It also ventured into the bio-fuel power generation business. Diversified product
portfolio helps the company to reduce the impact of market volatility in one particular product
segment and provides economic stability.
Existing distribution and sales network

The company has developed an effective nationwide distribution chain and sales network that is
believes provide its competitive advantage. The company sells its branded food products primarily it
supermarket, as well as directly to top wholesalers, large convenience stores and two types of dub-
distributors, large scale trading companies and independent business managers which in turn sell its
products to other small retailers and down line market through the Company’s Grand slam Program, an
innovative distribution scheme for downscale accounts, which enabled URC, Philippines to solidity its
presence on sari-sari stores and groceries, effectively, looking out competitors in the consumer food
segment in the Philippines. The Company’s branded consumer food products are distributed to
approximately 114,000 outlets in the Philippines and sold through direct sales force, regional
distributors and independent business managers.

Good Governance

The corporation is headed by good management and leaders also set a good tone in building a winning
culture.

Employee

The employees of the company are well-trained to do their tasks. The personnel can perform their job
on time to meet their target production.

Products

The company has wide variety of products that they offer to the public. They also have snack foods such
as that are leading the Market Maxx, Pretzels, and Piatos.

Loyal Consumers

The Company has created its brand that is well-known and trusted by the consumers.

Innovation

The company has shown that they can showcase their excellence by creating groundbreaking products
through the help of the of their high and excellent research and development.

Supply Chain

The company has good relationship with their suppliers. They make sure that they benefit from each
other and help each other to achieve success.

Market Position

The company has established a strong market position in the food industry making it one of the most
well-respected and profitable company in the Philippines.

Weaknesses

Competitive Market
 The Company believes that the principal competitive factors include price, taste, quality,
convenience, brand recognition and awareness, advertising and marketing, availability of products and
ability to get its product widely distributed. Generally, the Company faces competition from both local
and multinational companies in all of its markets. In the Philippines, major competitors in the market
segments in which it competes include Liwayway Manufacturing Corp., Columbia Foods International,
Republic Biscuit Corporation, Suncrest Foods Inc., Del Monte Phil. Inc., Monde Nissin Corporation, Nestle
Philippines Inc., San Miguel Pure Foods Company Inc. and Kraft Foods Inc. Internationally, major
competitors include Procter & Gamble, Effem Foods/Mars Inc., Lotte Group, Perfetti Van Melle Group,
Mayora Inda PT, Apollo Food, Frito-Lay, Nestlé S.A., Cadbury Schweppes PLC and Kraft Foods
International.

Geographical Concentration of Revenues

URC's dependence on limited region may restrict its future growth. URC is headquartered in Philippines
and also has operations in China, Thailand, Malaysia, Vietnam, Singapore, Hong Kong and Indonesia.
Majority of its operations including its R&D center is situated in the Philippines. Furthermore, it is highly
dependent on the region for its revenue generation. In FY2015, the company generated 69.6% of the
total revenue from domestic operations, whereas 30.4% from foreign operations. Therefore,
dependence on limited region may impact the company’s operations adversely in case of any political or
economic change.

Weak Online Presence

A weak online presence can result in lost opportunities for Universal Robina Corporation.

Today's business world relies on technology for everything from inventory management to
communicating with customers. When a Universal Robina Corporation uses outdated technology it can
slow down productivity and contribute to the business losing money. Consumers expect to use the
internet to research companies, find their contact information and browse their inventories perhaps
even buy directly from the website. Increasingly, they are doing this from mobile devices while "on the
go." Universal Robina Corporation might lose customers if their competitors do online better than they
do. Weak customer service hurts Universal Robina Corporation (URC)'s reputation and causes customers
to flee to competitors, who are more respondent.

Operational Performance

When it comes to foreign segment, the company has a weak operational performance.

Debt Ratio

Majority of the Company’s dept. obligations are denominated in foreign currencies.

Outdated Technology

The company lacks propriety Technology and patents, which can be a barrier to compete against rivals.
Opportunities

Economic Growth

The food industry is one of the fastest-growing sectors globally, helpful in attaining economic growth
and development.

Growth rates and profitability

There is an expected annual growth rate of 6.5 % by the year 2021-2025 in the food and Beverage
segment.

Global Markets

There is high demand for food products in all countries.

Threat

Fluctuating Raw Material Prices

The company uses several raw materials for production of snacks and other products and its
performance is sensitive to raw materials price movements. The continuous supply of the raw materials
may be affected due to adverse weather conditions, national emergencies, strikes, governmental
controls, natural disasters, supply shortages or due to any other unexpected events. Thus, the price
fluctuations of raw materials may impact the product costs and the operations of the company.

Stringent Regulations in the Philippines

The company has to abide by stringent regulations and specifications pertaining to its products in its
domestic and export markets. The Food and beverage industry in Philippines is regulated by a set of
well-defined laws and standards. Enforcement of the food and beverage safety laws and regulations is
overseen by the Bureau of Food and Drugs (BFAD) under the Department of Health (DOH), and the
Bureau of Agriculture and Fisheries Product Standards (BAFPS) of the Department of Agriculture (DA).
Under the Food, Drug and Cosmetics Act, BFAD is responsible for the safety of processed food products
while under the Agriculture and Fisheries Modernization Act (AFMA) BAFPS is accountable for safety
fresh and primary agricultural and fisheries products. These agencies regulate the food and drug
industry by inspection and licensing of facilities, registration and market monitoring of products,
approval of product label before marketing, and approval and monitoring of promotions and
advertisements. URC is based in the Philippines and has majority of its operations in the country. The
company has to incur significant cost to conform to the regulations and any nonconformance may result
in fines and other penalties which may be derogatory to the company’s image.

Changing Consumer Preferences

Due to the changing lifestyle of Filipinos on wanting live a healthier lifestyle and increasing number of
sugar related illness cases, there is a threat of consumer to patronize healthier alternative snack.

Consumers’ Purchasing Power

There is Income inequality all over the places. This situation significantly affects the purchasing power
and consumption of consumers.

Technological Advancement

Technology has evolved and becomes part of the production process. It is one of the most significant
drivers of the future growth and the company’s efficiency.
IV. Corporate Level Strategic Factors

Directional Strategies

 Growth Strategies

Horizontal Growth

The Company intends to continuously expand the production and distribution of the branded consumer
food products internationally through the addition of manufacturing facilities located in geographically
desirable areas, especially in the ASEAN countries, the realignment of the production to take advantage
of markets that are more efficient for production and sourcing of raw materials, and increased focus and
support for exports to other markets from the manufacturing facilities. It also intends to enter into
alliances with local raw material suppliers and distributors.

Concentric Diversification

The Universal Robina Corporation adopted Concentric diversification strategy when it intends to
continuously introduce innovative new products, product vibrant and line extensions in the snack food
(snacks, biscuits, candies, chocolates and bakery), beverage and grocery (instant noodles and tomato-
based) products. This fiscal year alone, the Company’s Philippines Branded Consumer Foods has
introduced 41 new products, which contributed to sales growth. The company supports the rapid
growth of the business through line expansion construction and acquisition of plants. The company
acquired a plant facility in San Pedro, Laguna to further enhance its production and warehouse
capacities.

URC took steps to expand its profile overseas and the region, with the acquisition of New
Zealand Snack Foods Holdings Ltd., which owns Griffin’s Foods, New Zealand’s biggest snack foods
maker, for $609 million. The Company develops new products and variants of existing product lines,
researches new processes and tests new equipment on a regular basis in order to maintain and improve
the quality of the Company’s food products. In Philippine operations alone, about P=91 million was
spent for research and development activities for calendar year 2017 and approximately P=32 million
and P=87 million for the three-month period ended December 31, 2016 and fiscal year 2016,
respectively.
 The Company has research and development staff for its branded consumer foods and
packaging divisions located in its research and development facility in Metro Manila and in each of its
manufacturing facilities. In addition, the Company hires experts from all over the world to assist its
research and development staff. The Company conducts extensive research and development for new
products, line extensions for existing products and for improved production, quality control and
packaging as well as customizing products to meet the local needs and tastes in the international
markets.

 Stability Strategies

URC’s financial and operational capabilities and its development in one of the most well respected
and profitable company in the Philippines. It is clear that URC is a stable company and that it would
continue to grow and become more diverse because of its strong foundation and qualities as a
company.

No Change Strategy

The company’s financial history, has found that throughout the years, this company continues to
grow and further develops itself to becoming a successful entity. URC as the company has no change
strategy like for example of their old strategy when comes to cut its cost of goods sold in order to
generate more profit for themselves. It continues to increase their revenues from $71.2 billion to $81.0
billion. It can easily be said that investing in this entity is beneficial to the investor. Because of the
company’s performance through the years, an investor can be secured in investing since he has a
guarantee that it shall receive more money in dividends and in capital appreciation. It can be assured
that URC is stable and will not go bankrupt. URC has declared itself ready for the competition when the
time comes. Since it knows that demand for their products is high in other countries such as Vietnam,
and it chose to expand their company to produce more branches. Also it looks for a collaborative effort,
rather than seeing problem to avoid.

 Retrenchment Strategies

UNIVERSAL ROBINA Corp. (URC) reported a 23% drop in net income attributable to the parent in the
second quarter, amid continued challenges in its branded consumer foods business in the Philippines
and Vietnam. A regulatory filing showed the Gokongwei-led food company’s attributable net income fell
to P2.88 billion in the April to June period, from P3.8 billion during the same period a year ago. This
brought its first-half profit to P6.38 billion, 14% lower than the P7.4 billion a year ago. For the second
quarter, URC’s net sales rose 12% to P30.1 billion, but outpaced by the 14% increase in cost of sales to
P20.7 billion.
Three phases strategy

Contraction

URC reported six-month sales of branded consumer foods in the Philippines, excluding packaging, was
flat at P29.311 billion, “as favorable results of snack foods and joint ventures were offset by the double-
digit decline of beverages.” Sales of snack foods, which include Piattos, Chippy, Cloud 9 and Presto,
jumped 9.4% in the January to June period, while its joint venture businesses, which include Nissin and
Danone, grew 22%.

First-half net sales jumped 10% to P60.79 billion, which URC attributed to “strong performances of
branded consumer foods Thailand, farms and sugar & renewables, and the additional sales of Snack
Brands Australia (SBA).” Cost of sales during the January to June period also went up 11% to P41.53
billion. due to higher input costs.

Consolidation

In April 2019, URC formed a Global Exports business unit tasked with the worldwide distribution
of both URC Philippines and URC International sourced products. The strategy brought about the
integration of URC’s regional sales teams, allowing the consolidation of the company’s previously
separate export departments into one global export team. This streamlining of operations provides the
company with better access to its network of customers in more than 50 countries. At present, URC’s
Global Export business unit serves nations and territories in North America, Europe, the Middle East,
Africa and Indian Ocean islands, North Asia, and Oceania and the Pacific Islands.

The consolidation is further expected to maximize URC’s sales resources and manufacturing capabilities,
allowing URC to better serve its current distributors and retail partners in existing markets, while
providing opportunities for the company to explore new business channels. Through its centralized
Global Exports unit, URC seeks to build global awareness for its brands, enter new territories and
explore untapped business opportunities, and enable organic growth. Underlining the consolidation, the
central Global Exports unit will promote and sell URC products worldwide under one official catalog.

Rebirth

No matter where their products turn up, whether it’s on a store shelf in Manila or somewhere halfway
around the globe, customers can rest assured that they were produced in strict compliance with
established global manufacturing standards, not only in terms of food safety and quality, but also with
sustainability and its workers’ environment, health, and safety (EHS) in mind.
https://studylib.net/doc/25411954/universal-robina-corporation-
URC recognize the importance of cohesive 360° communication campaigns to not only build brand
affinity, but to also engage consumers on different fronts: Advertising for maximum visibility in mass
media; Public Relations to build the brand love; Consumer Marketing and Promotions for the
consumers’ actual experience with their products; and Digital as well as Social Media presence to
capture the new generation of consumers.

Universal Robina Corporation operates both locally and internationally. It is known to be highly
competitive in the food industry. It appears to have a more significant advantage in some business
aspects like implementing strategies that result in higher profitability. There are five (5) forces that
Universal Robina Corporation needs to consider and overcome to attain and sustain its competitive
advantage. These five (5) forces will be discussed below.

1. Competitive rivalry
Universal Robina Corporation’s competitive rivalry status is indicated as strong. The
Philippines is dominating when it comes to food manufacturing with over the top twenty (20)
top players. Each of them is contributing to the total 40.1 percent total output in manufacturing.
Competition in the food and beverage industry remains intense. The most concerning factors on
the food industry’s competition are product quality, brand recognition, brand loyalty, service,
marketing, advertising, price, availability of products and the ability to get its product widely
distributed. Since there are numerous key players in the food industry, the target market is one
of the most crucial factors to consider when evaluating the significant fluctuation that includes
their movements, preferences, and ad developments, such as the current trends from time to
time. With the rival firm’s brand positioning, they must develop and introduce brands from time
to time.

2. Threat of new entrants

Universal Robina Corporation’s status in terms of the threat of new entrants is indicated
as moderate. These new entrants’ threats include the low switching cost, customer loyalty, and
 high cost of brand development. New entrants may threaten the established food
manufacturers because consumers buying decisions can easily be influenced depending on the
company’s marketing strategies where they avail their consumed products. This situation may
make consumers shift from one company to another. The cost of brand development is high,
making it difficult for new entrants to quickly and to directly compete against existing rivals in
the industry, especially those with the strongest brands. The company must still continuously
adapt to inevitable changes because these will have a significant impact on their success or
failure.

3. Threat of substitutes
Universal Robina Corporation’s status in terms of the threat of substitutes is indicated as
moderate. Players in the food industry have almost the same products and line of segments.
Hence, products could be substituted based on consumer preferences and trends, and other
variables to consider. The high performance among the substitutes alarms individual producers
to introduce more products in the market. Dominants in the market are being imitated either in
their packaging or recipe. However, it is a determinant when it comes to consumer’s
substitutions decisions. According to some studies, Filipino families spend almost Php5,000 of
their monthly income from purchasing grocery items. Products from established companies
make switching cost low because of brand loyalty dominating the consumer’s buying decisions.

The Company has developed an effective nationwide distribution chain and sales network that it
believes provide its competitive advantage. The Company sells its branded food products primarily to
supermarkets, as well as directly to top wholesalers, large convenience stores, large scale trading
companies and regional distributors, which in turn sell its products to other small retailers and down line
markets. The Company’s branded consumer food products are distributed to approximately 180,000
outlets in the Philippines and sold through various retailers and regional distributors. URC intends to
expand its distribution network coverage in the Philippines by increasing the number of retail outlets
that its sales force and distributors directly service. The branded consumer food products are generally
sold by the Company from salesmen to wholesalers or supermarkets, and regional distributors to small
retail outlets. 15 to 30-day credit terms are extended to wholesalers, supermarkets and regional
distributors. The Company believes that its emphasis on marketing, product innovation and quality, and
strong brand equity has played a key role in its success in achieving leading market shares in the
different categories where it competes. In particular, URC launched “Jack ‘n Jill” as a master umbrella
brand for all its snack food products in order to enhance customer recognition. URC devotes significant
expenditures to support advertising and branding to differentiate its products and further expand
market share both in the Philippines and in its overseas markets, including funding for advertising
campaigns such as television commercials and radio and print advertisements, as well as trade and
consumer promotions. For URC agro-industrial group (AIG), both piggery and poultry farms have been
accredited as GAHP (Good Animal Husbandry Practice), 100% compliant to Good Manufacturing
Practices (GMP) and its meats and eggs have been certified as No Hormone, and Antibiotic residue free.
This has allowed AIG to aggressively capture the quality conscious meat segment of the country as
embodied by the Robina Farms brand with its key positioning of Robina-Raised, Family-Safe products.
Similarly, the Feeds business headed by their brand champions such as Uno+, Supremo Gamefowl, and
Top Breed Dog meals increased its distribution network supported by the Kabalikat Farm Program
covering Hog and Gamefowl raisers.

URC was one of the few companies that continued to see growth in revenues and earnings despite the
pandemic. Food manufacturing has proven to be pandemic proof as they sell basic commodities.
Universal Robina Corporation (URC) saw its profits go up by 51% to P3.2 billion in the first quarter of
2021, due to lower corporate taxes, growth in operating income, and controlled financing costs. When
President Rodrigo Duterte signed the Comprehensive Recovery and Tax Incentives for Enterprises or
CREATE Act, lowers corporate income taxes to 25%. URC’s sales during the first three months grew a
modest 3% to P34.6 billion, while operating income grew 9% to P4.3 billion. Sales of domestic and
international branded consumer foods amounted to P25.7 billion. Domestic revenues dipped by 5% to
P14.9 billion, as market sentiment continues to be challenged. On the cost side, they face headwinds as
commodity prices continue rising. Despite these challenges, they were able to gain market share,
increase overall top line sales, and achieve good profit growth. URC’s financial position remains strong,
with a cash balance of P18.6 billion and net debt of P21.3 billion. The current performance of the
company is more of a turnaround for the company after encountering problems in the past thus with
this turnaround, the company saw its move to the growth business cycle stage especially with the
synergies it had develop from the recent acquisition of sugar milling industries plus other international
companies. The Department of Trade and Industry hailed URC as the country’s top exporter for the
processed food and beverage sector during last year’s National Export Congress.

URC’s financial position remains strong but coronavirus disrupts its growth trajectory in the 1st quarter
of 2020 with over Php20 billions of cash balance, and gearing ratio remaining low at 0.42x. Net debt also
improved amounting to Php17.0 billion, a reduction of Php5 billion versus year ago.

URC started 2020 well, continuing their strong results in 2019 with good sales and profit growth in many
of their divisions and geographies. However, as the company closed the first quarter in March, their
growth momentum was impacted by COVID-19 related disruptions.

The Branded Consumer Food Products segment manufactures and distributes salty snacks, chocolates,
candies, biscuits, bakery products, beverages, instant noodles, pasta and tomato-based products. The
Agro-Industrial Products segment produces and distributes animal health products, animal feeds,
glucose, and soya bean products; and operates hog and poultry farm. The Commodity Food Products
segment refines sugar and flour; manufactures pasta; and develops renewable energy.
The BOPP plant, located in Batangas, began commercial operation in June 1998 and holds the distinction
of being the only Integrated Management System ISO-certified BOPP plant in the country today, with its
Quality ISO 9001:2008 and Environmental ISO 14001:2004 Standards. URC also formed Food Service and
Industrial division that supply BCF products in bulk to certain institutions like hotels, restaurants, and
schools. In July 2014, the Company announced that it will acquire 100% shares of NZ Snack Foods
Holdings Limited, which is the holding company of Griffin’s Food Limited, a leading snack food company
in New Zealand, from Pacific Equity Partners. The acquisition was subject to the approval of the New
Zealand Overseas Investment Office and the transaction was completed in November 2014. The
Company also entered into joint ventures, Calbee-URC Inc. and Danone Universal Robina Beverages Inc.
Majority of the Company’s branded consumer foods business is conducted in the Philippines. In 2000,
the Company began to expand its BCF business more aggressively into other Asian markets, primarily
through its subsidiary, URC International and its subsidiaries in China: Shanghai Peggy - 2 - Foods Co.
Ltd., Guangzhou Peggy Foods Co. Ltd., and URC Hongkong Co. Ltd.; in Malaysia: URC Snack Foods
(Malaysia) Sdn. Bhd. and Ricellent Sdn. Bhd.; in Thailand: URC (Thailand) Co. Ltd.; in Singapore: URC
Foods (Singapore) Pte. Ltd.: Acesfood Network Pte, Ltd. in 2007 and Advanson International Pte, Ltd. in
2008; in Indonesia: PT URC Indonesia; in Vietnam: URC Vietnam Company Ltd. in 2006, URC Hanoi
Company, Ltd. in 2009 and URC Central Co. Ltd. in 2013; and in Myanmar: URC (Myanmar) Co. Ltd in
2013. The Asian operations contributed about 25.7% of the Company’s revenues for the fiscal year
ended September 30, 2014.

The company ensure full compliance with food safety regulations while continuing to improve their own
systems and operating standards, especially as the company grows its multinational presence
throughout ASEAN and Oceania. URC is well aware that product responsibility is essential to their
reputation, brand reception, and the health of their consumers. From raw materials to the finished
product, they provide food that is safe for consumption. Governing the effective management of
product quality is the URC Quality Policy across all BUs, as well as the standards and measures of food
safety certification schemes that inform the policy. URC conduct the required analysis on safety to avoid
any potential hazards, and they cover the key elements of system management, interactive
communication, and prerequisite programs and principles. They ensure that 100% of their products
conform to standards and quality measures as prescribed by their regulators. These include the
Philippine Food and Drug Administration (FDA), Sugar Regulatory Administration (SRA), Bureau of
Animal Industry (BAI), Department of Agriculture (DA), Department of Health (DOH), and Department of
Environment and Natural Resources (DENR), among others. Foremost of all, they adhere closely to the
Philippine Food Safety Act (Republic Act or R.A. 10611) that protects consumer health and safety.
Regulatory compliance encompasses product registration, sale, inspection, labeling, and marketing as
part of their license to operate and furthermore, facilitates ease of doing business. Across URC
operations, 100% of their product categories undergo a stringent quality assurance process. Equipped
with efficient systems and an empowered team, they follow the URC Quality and Safety Plan at each
stage of production as they deliver their innovative and exciting products. Following through on their
promise of food safety, the company ensure that their consumers are protected at each stage of their
supply chain, by adopting standards set down by the International Organization for Standardization
(ISO). These international accreditations are renewed every three years and with constant checks to
ensure consistent practice. URC’s certifications include: ISO 9001:2008 Quality Management System, ISO
140001:2004 Environmental Management System, ISO 17205:2005 PAO Accredited Laboratory, and
Hazard Analysis Critical Control Points (HACCP). Internal controls are in place at each stage of production
for all URC products. Furthermore, they emphasize audit and mitigation processes in their
manufacturing sites, especially in line with globally accepted standards.

Making dessert is great fun, but it is also important to be safe in the kitchen.

It's very important to prepare food safely to help stop harmful bacteria from spreading and growing.

Kitchen safety awareness is crucial during food preparation and cooking, as well as during clean-up and
daily living. Understanding the hazards present in the kitchen can help you avoid causing an accident or
subjecting your family to a bout of food poisoning.

Overall, safety procedures can provide many benefits to a business. Besides the obvious benefit of
keeping employees and customers safe, safety procedures can assist in certifications, protect the
business from legal liability claims, and encourage employee efficiency and motivation.

Observing basic rules of kitchen safety is a good habit to develop. Always pay attention to what you're
doing in the kitchen because one slip can cause serious injury or accidents.

The importance of following workplace safety procedures when making desserts is a good habit
to develop. Kitchen safety awareness is crucial during food preparation and cooking, as well as during
clean-up and daily living. Understanding the hazards present in the kitchen can help you avoid causing
an accident or food poisoning. You must always be concerned with your own safety and with the safety
of others around you. It's very important to prepare food safely to help stop harmful bacteria from
spreading and growing.

By doing things right, you and your co-workers will commit yourselves to safety on the job and
everyone will benefit. Accidents occur in many ways but most often can be traced back to one of two
basic factors: ignorance or carelessness. You must always be concerned with your own safety and with
the safety of others around you.