AgriNurture ends supply contract with SM supermarkets

MANILA, Philippines - AgriNurture Inc. has terminated its contract with the Sy-led SM group for the supply of fresh fruits and vegetables, the listed food producer and exporter said in a disclosure on Thursday.

AgriNurture's subsidiaries First Class Agricultural Corporation and Fresh & Green Harvest Corp. has already handed in a formal notice to SM Group's Super Value Inc. and Super Shopping Market Inc., saying they would stop supplying fresh produce to SM Supermarkets and SM Hypermarkets.

The food firm said it will complete pull-out of inventories by Oct. 26 for SM Supermarkets and Oct. 31 for SM Hypermarkets.

"The end of the two decade old supply relationship with the supermarket chains of the SM Group is expected to have only a small positive effect on the Company's income for the rest of 2012, but will result in a more pronounced positive effect in 2013," AgriNurture said.

The termination of its relationship with the SM Group will free up some P60 million in working capital tied to credit lines of the supermarket chain, AgriNurture pointed out.

"The newly freed up capital will be deployed to other more profitable channels of distribution for fresh fruits and vegetables and thus generate better returns for the Company and its shareholders," the food firm said.

source: abs-cbnnews.com