MANILA (Dow Jones) – Sabin Aboitiz knows close to nothing about cockfighting. Nonetheless, he is making a big bet on the popular Filipino pastime as a future growth driver for Pilmico Foods Corp.

"Margins are higher" in gamefowl feeds, the president and chief executive of Pilmico told Dow Jones Newswires late Thursday, explaining the company's foray into the specialized segment of the P200- billion feeds market.

Pilmico is the flour and animal feeds subsidiary of investment holding firm Aboitiz Equity Ventures Inc. (AEV.PH), which also has interests in banking, power, property development and transportation.

Aboitiz said the move into gamefowl feed is aimed at increasing Pilmico's contribution to earnings of Aboitiz Equity, whose investments in power generation and distribution are its main income drivers.

Unlike chickens grown for food, Aboitiz explains that fighting cocks live longer – usually for several years compared with no more than two months for regular poultry – consequently, requiring more and different types of feed.

He said there are an estimated 39 million gamefowl in the Philippines, a number that is still growing as larger, more lucrative cock fights are held.

Aboitiz said Pilmico plans to expand product lines, increase output and improve its distribution network to gain a bigger share of the feed market. It claims a 4% market share of the total domestic feed market.

In the first half, Pilmico contributed 13% to Aboitiz Equity's P3.44 billion net profit, – versus a 10% share last year.

Pilmico has been developing its feed business in recent years and the start of operations last September of its 108,000 metric ton Iligan feedmill helped boost margins and pare freight costs, resulting in a 67% surge in first-half net profit to P385 million.

The feeds business accounted for 58% of Pilmico's first-half profit and 35% of its P5.53 billion revenue. In the year earlier period, the profit and revenue contribution was 1.3% and 28%, respectively.

Pilmico had said that high demand in the Visayas and Mindanao markets had pushed utilization level of the Iligan feedmill to 80% of capacity. The company is now preparing to build a second feedmill that will cost P68 million and that is scheduled for completion by the fourth quarter of 2010.

Pilmico also expects to soon finish a P90-million biogas facility in its swine farm. The facility will convert hog waste into electricity that will meet 80% of the farm's power needs. Pilmico is applying for carbon credits for this project.