Calata Corp. is projecting higher profit margins in 2013 with increased sales from its own brand of agricultural chemicals and veterinary medicines.
ECHAGUE, Isabela—Listed agricultural products distributor Calata Corp. is projecting higher profit margins in 2013 with increased sales from its own brand of agricultural chemicals and veterinary medicines.
In an interview with company President Joseph Calata, he said selling these products under their own brand will allow the firm to expand its product margins by “200 percent to 300 percent, from the present 15 percent.”
He declined to disclose the brand name pending proper disclosures with the Philippine Stock Exchange, and registration with the Intellectual Property Office.
Calata explained that the patents on most of these chemicals and animal health products have already expired, allowing him to have these manufactured as a generic brand. “I’ll be selling these products at a cheaper price than the multinational companies,” he said, comparing these to the SM Bonus brand.
The firm is also looking to acquire an animal health company that will enable it to double its retail store outlets from the current 116 in Luzon.
“The Luzon market is still underserved; there is still a lot of room to grow and sell more of our products here,” he said.
The firm posted a net income of P110 million in 2012 on the back of gross revenues amounting to P2.2 billion. “Definitely, our profits will be much higher this year,” Calata stressed, while declining to reveal the firm’s targets.
Calata Corp. is a publicly listed company and is considered the biggest distributor of agrochemicals, feeds, and fertilizers in the country. Its share price closed at P3.50 on Tuesday.
Calata recently partnered with Siembra Directa Corp., a company that imports state-of-the-art agricultural machines from Argentina. He said he wants to introduce mechanized farming in the country to boost the productivity and incomes of farmers.
He said the traditional farming practices used in the country have lowered soil fertility resulting in the “loss of valuable moisture and nutrients.” Using farm machines, Calata hopes to introduce “zero-tillage farming,” a proven technology that has raised the yields of farms in advanced agricultural economies like Argentina, Brazil and the United States.
The partnership was launched here on Wednesday at Calata’s 300-hectare corn farm, which the company is leasing from some 60 farmers at P11,000 per hectare. It is touted as the first fully mechanized corn farm in the country.
Calata said he hopes to inspire the other corn farmers in Isabela to adopt the new technology. “The cooperatives can borrow from Land Bank (of the Philippines) to buy these tillers and harvesters and share among themselves.” One small mechanical planter is estimated to cost $16,000 (P688,000) which can plant 20 hectares a day.
“We believe that the key to reversing the exodus of people from agriculture lies in vastly improving productivity,” said Nico Bolzico of Siembra Directa. “Existing technology and machinery must be put to work in Philippine fields so that farmers can realize the full potential of their harvest.”
He added that Siembra Directa is committed to making equipment such as mechanical corn planters, fumigators and harvesters available to more farmers and farmers cooperatives, as well as the training necessary to operate the machinery.