Bimbo to invest USD$800 million in 2018

The Mexican bread maker is seeking to improve and modernize both production capacity and distribution network
Loaves of bread of Mexican bread maker Grupo Bimbo are seen at a store – Photo: José Luis González
27/02/2018
13:56
Miguel Pallares
Mexico City
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Mexican bread maker Grupo Bimbo is planning to invest between USD$800 million and USD$850 million in 2018 as part of its expansion plan to increase production capacity and improve efficiency.

"By 2018, we expect capital spending to be between USD$800 million and USD$850 million. We will invest in our digital transformation project and in improving and modernizing production capacity and our distribution network" disclosed Diego Gaxiola, Bimbo's Director of Administration and Finance.

The 2018 budget represents a 31%-38% increase compared to the 2017 budget amounted to USD$607 million.

In a conference with analysts, accompanied by Daniel Servitje, Chief Executive Officer of Grupo Bimbo, Gaxiola said that in the fourth quarter of 2017 the company received a single non-monetary charge of MXN$706 million due to the recent implementation of the tax reform in the U.S.

"It is important to bear in mind that in the future, the tax reform will generate a positive effect on the cash flow of the company," he assured.

Servitje explained that the strong demand for consumer goods anticipates stable inflation levels this year, offering a positive outlook for the brand's performance in the country.

Regarding Bimbo's arrival in the Chinese market, he said that the company will look for opportunities in that region.

It should be noted that Bimbo registered a 21.5% drop in net profits in 2017, affected by increasing costs and taxes, according to its quarterly report.

Thus, Bimbo's debt amounted to MXN$94,313 million representing a 14.3% increase compared to MXN$82,500 million last year.

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