Emperador expands vineyard in Spain

MANILA, Philippines – Andrew Tan-led Emperador Inc. said Tuesday, July 15, it is expanding its vineyard in Toledo, Spain to boost grape production for its brandy business.

Emperador, through wholly-owned subsidiary Grupo Emperador Spain S.A., signed an agreement to acquire 230 hectares of land in Toledo. The land is adjacent to its vineyard Vinedos del Rio Tajo, which is operated by Bodegas Las Copas, a joint venture with sherry bodega Gonzalez Byass.

The acquisition is in line with the continuous expansion of the company’s global portfolio. Emperador aims to own 2,000 hectares of vineyard by 2016.

“With this total integration in our brandy production, we are in the best position to continue making Emperador the number one brandy in the world. That gives us the capacity to expand our global market. With Emperador Spain continuously looking out to acquire more vineyard land in Spain, we expect that our total vineyard property will reach close to 2,000 hectares by 2016,” Emperador Spain Managing Director Jorge Domecq said.

The liquor firm has vineyards in Jerez and Madrid in Spain.

By using state-of-the-art technology in vineyard operation and management, the company hopes to achieve a yield of 30,000 kilos per hectare against an average industry yield of around 6,500 kilos, Domecq said.

“This means that in every hectare of this vineyard land, we will be able to harvest 5 times more wine grapes. This will very well support the raw material requirements for our brandy production,” he added.

Accelerating growth

In May, Emperador signed an agreement with United Spirits (Great Britain) Ltd., a wholly owned subsidiary of United Spirits Ltd. of India, to acquire Whyte & Mackay’s whiskey business for £430 million ($737.70 million*).

Its strategic investments in the United Kingdom and Spain will secure its dominance in the liquor industry. It will also make Emperador a premier global liquor company with a more diversified portfolio of premium offerings, the company said.

Meanwhile, the synergies will accelerate the doubling of Emperador’s 2013 net income of P5.8 billion ($133.01 billion**).

In the first quarter, Emperador posted a 19% increase in net income to P1.7 billion on higher sales volume. Consolidated revenues reached P7.7 billion ($176.39 million), up 17% from P6.6 billion ($137.50 million) in the first quarter of 2013.

Emperador is a unit of Tan’s holding company Alliance Global Group, which is also engaged in real estate, resorts and gaming, and fast food restaurants. – Rappler.com

*($1 = £0.58)

**($1 = P43.63)