The Po brothers’ buyout of Ligo Sardines from the Tung family has propelled Century Pacific Foods (CNPF) as the second biggest player in the highly competitive market.
CNPF’s total share in the local sardines market is estimated at 25 percent with the addition of Ligo to its 555 and Lucky 7 sardines brands (created by the late ultra bilyonaryo Ricardo Po).
This allowed CNPF to leapfrog Young’s Town Sardines of Maunlad Canning (20 percent market share) as the second biggest sardines canner in the country.
But this was not enough to knock off Mega Global Fishing and Canning of bilyonaryo William Tiu-Lim (which started his canning factory in Zamboanga in 1998) which remained as the undisputed king of sardines in the country with a 30 percent market share.
Ligo ranked only fifth among sardines brands behind CNPF’s 555 (third) and Lucky 7 (fourth).
Abacus Securities called Ligo, an “underperfomer” with its rivals gobbling up the firm’s market share in the past few years, especially during the pandemic.
The family patriarch, Gregory Tung Jr., started the handover to the third generation Tung brothers – Lawrence (VP for production), Mark Gregory (VP for sales and marketing), and Michael Kevin or “Macky” (VP for advertising and promotion) – the previous decade.
But despite the lackluster performance of the Tung brothers, Abacus said Ligo remained profitable with estimated sales of P2 billion and an industry margin range of 20 percent to 30 percent.
“Across the board, with CNPF also in the same industry and category, synergies should be expected with management emphasis on supply chain and manufacturing. This should provide slightly better margins for this segment which is expected to linger in its first year. Management expects the acquisition to be accretive in the second year,” said Abacus.