In a disclosure to the Philippine Stock Exchange (PSE) yesterday, URC senior vice president for corporate planning Bach Johann Sebastian said URC has entered into a memorandum of agreement with GMC for the purchase of GMC’s snack manufacturing assets as well as its trademarks.

GMC is the second largest corn chips manufacturer in the Philippines. It produces and sells corn- and wheat-based snacks such as Kornets, Tortillos, and Brew Bud under the Granny Goose mother brand.

URC is the largest savory snacks manufacturer in the Philippines. It also manufactures biscuits, cakes, candies, and chocolates under the Jack ‘n Jill mother brand.

"We are looking forward to this development," said URC president Lance Y. Gokongwei noting that "the heritage of the Granny Goose brand, as well as GMC’s diverse snacks lineup, will complement and grow our existing snack food operations."

URC is allotting R3 billion for its capital expenditures this year to grow both its domestic and international operations, particularly in China and Vietnam.

Gokongwei said a recovery in its overseas businesses is seen to push revenues to the up by 30 percent to breach the 0 million mark.

He said the the capex will allow the firm to take advantage of positive trends in domestic branded consumer food, specially snack foods.

URC will continue to launch new products and pursue mergers and acquisitions of branded food and beverages businesses that have strategic fit and accretive value to its businesses.

Gokongwei said they will also spend to increase the output of URC’s sugar business by expanding an existing sugar mill and building a new refinery to assure a consistent supply to the growing sugar requirements in its branded consumer foods.

The firm is also beefing up its manufacturing facilities in China and Vietnam while introducing its popular iced tea drink C2 to new markets such as Indonesia, Thailand, Malaysia in Singapore.

Gokongwei said the growth in its revenues overseas will be driven primarily from sales in Thailand, Vietnam and Malaysia where URC recently expanded its biscuits production capacity. URC’s C2 has also gained wide acceptance in Vietnam.

He noted that the current weakness of the dollar has a neutral effect in the firm’s revenues despite its have a lot of businesses overseas explaining that while the peso’s strength translates to foreign exchange losses from its overseas earnings, it also brings down the cost of its imported raw materials.

"We prefer a strong peso," Gokongwei said adding that earnings both in the Philippines and overseas are being enhanced by better efficiencies since commodity prices are driving up costs by 10 to 15 percent despite the peso appreciation.

Gokongwei said revenues in the first half is expected to grow by a robust 18 percent as indicated in the first quarter of URC’s fiscal year ending September 2008 noting that "its not a question of demand but of costs."