MPIC nears P1-B Franklin Baker buyout
Metro Pacific Investments Corp. (MPIC) expects to close its P1-billion takeover of Franklin Baker Co. of the Philippines within the next two months as the Pangilinan-led firm sets its sights on export expansion.
Manuel V. Pangilinan, MPIC chair, president and CEO, confirmed to reporters in a recent interview that Metro Pacific Agro Ventures Inc. (MPAV) would acquire 100 percent of the major desiccated coconut producer.
In taking over Franklin Baker, Pangilinan said they would “produce finished coconut products for export.”
Desiccated coconut, or dried and grated coconut meat, is typically used for baking and cooking.
The billionaire added that they had already been working with Franklin Baker as the original equipment manufacturer of Axelum Resources Corp., in which MPAV owns a 34.76-percent stake.
“It’s an export business for both Axelum and Franklin, which is a good business model: dollar revenues, peso expenses,” Pangilinan noted.
Dollar revenues are typically more favorable for a company based in the Philippines due to exchange rates, with the US dollar being stronger than the Philippine peso. This will likewise translate to lower costs, which are peso-denominated.
Axelum currently exports its products to at least 25 markets in North America, Australia, Europe, South America, the Middle East and parts of Asia. Among its major clients is international coconut water brand Vita Coco.
Last month, the Inquirer learned that a group of six banks was negotiating restructured terms for a P6.3-billion syndicated loan that would be extended to Franklin Baker.
According to sources, the restructuring is meant to prevent a default, with Franklin Baker still struggling to settle its debt. This is also the reason why it was looking for white knights, the people said.
Founded in 1921 by American flour miller Franklin Baker Sr. and his son, the company currently exports to over 50 countries across the globe, with the United States as its major market.
It currently operates three manufacturing facilities in the Philippines: one in San Pablo, Laguna province and two others in Davao del Sur province. Combined, these facilities have a capacity to produce at least 65 million pounds of desiccated coconut a year.
A November 2024 market report by Chelmer Foods Ltd. found that Franklin Baker had shut down all three of its factories due to its financial obligations.
