Philippines: Mighty Corp. Ready to Accept Partners

Source from:  Manila Bulletin 08/25/2014

Amid rumors of possible entry of Lucky Strike cigarette-maker British American Tobacco (BAT) into a local tobacco company, Bulacan-based Mighty Corp. admitted it is open to a partnership with any cigarette firm.

Oscar P. Barrientos, Mighty executive vice-president, said several foreign companies have already approached the Wongchuking family, the cigarette firm's owner, to inquire about their interest to enter into a partnership.

While Barrientos did not name the entities that have showed interest in Mighty, the official revealed most of them came from Singapore.

When asked if BAT is one of the interested companies, Barrientos said "let's just wait for the announcement."

"Mighty is not for sale. What we can offer is our distribution network and manufacturing facility. If ever we will get a partner, we will still operate in separate management teams. It's not going to be a merger," Barrientos said.

But Barrientos said any partnership has a "right price."

"If we get a partner we'll need to upgrade our manufacturing facility to accommodate additional production, and this, of course, requires investments," the Mighty official said.

Earlier, Robert Eugenio, BAT Philippines head of corporate and regulatory affairs, said the Lucky Strike cigarette-maker is willingness to partnering with another cigarette manufacturing company.

Eugenio explained BAT is open to any "beneficial" opportunity in the Philippines.

Since BAT's return to the Philippine market in 2012, the company's market share grew at a snail's pace despite its marketing strategy of selling imported cigarette packets below the economical price.

BAT, which unveiled a $200 million investment plan for the Philippines in 2012, currently has a weak distribution network in the country, and been incurring an additional cost for the importation of its Malaysia-made Lucky Strike and Pall Mall brands.

"In the process of running a business, we would look at whether partnering with another company would make sense than putting up our own manufacturing facility," Eugenio said. "In the past, we partnered with La Suerte Cigar and Cigarette Factory, but it was terminated when we left in 2009." Enditem