Axelum Resources Corp. said it looks to spend P500-600 million next year to further strengthen its production capabilities and broaden its geographic reach.
“The company intends to continuously invest on pioneering technology and cutting-edge equipment to optimize manufacturing output. Moreover, it plans to penetrate new markets or expand within existing territories by setting up regional distribution hubs and appointing reputable foreign distribution partners,” said Henry Raperoga, Axelum president.
“We have yet to maximize our presence in the global scale. As such, we are looking to aggressively widen our footprint particularly in the United States West Coast, Eastern Europe and Asia,” he added.
Raperoga said Axelum expects its non-traditional segment specifically coconut water and coconut milk powder to drive its growth momentum in 2020.
“At this point, Axelum is finalizing the renewal of its coconut water supply contract with its anchor client, that will include additional product variants translating to higher annual committed volumes of 25-27 million liters from 20-22 million liters,” he said.
“Recently, the company also completed the extension of its spray-drying line that will double its production capacity for coconut milk powder from 2,400 metric tons to 4,800 metric tons yearly. This will allow the company to capitalize on the healthy demand for coconut milk power, which is known for its extensive commercial applications,” he added.
According to Raperoga, Axelum has initially allocated P800 million out of its P4-billion initial public offer proceeds to partially settle some of its short-term loan obligations in order to immediately realize cost savings on interest charges.
He also said at present, Axelum has preliminary discussions with certain parties for acquisition.
“We undertook a structured assessment process to carefully determine potential targets prior to approaching them. Should a deal be consummated, hopefully by next year, this will ensure that the transaction will be both income and operationally accretive to Axelum,” said Romeo Chan, Axelum chairman.
“As early as now, we believe that our well-defined objectives and strategies will put us in a strong position to grow our bottomline by at least double-digit next year,” Chan added.
Following its debut in the Philippine Stock Exchange, Axelum has seen its share price trading at a discount relative to its initial public offering. The company offered to the public 700 million primary shares and 100 million secondary shares at an offer price of P5 apiece.
“This does not in any way accurately reflect the company’s core fundamental value. Based on various external sources, we are currently trading at pricing multiples significantly lower than the market average, consumer sector and select local peers. Given our sound fundamentals and robust growth prospects, these prevailing valuations present a unique and ideal opportunity especially for long-term investors,” said Paul Cheah, Axelum investor relations officer.