San Miguel to start up Indonesian drinks plant

- Last updated on GMT

Related tags: San miguel, Southeast asia

San
Miguel has started construction of a new beverage manufacturing
facility in Java, Indonesia, as part of its aim to further expand
its operations beyond the domestic Philippines market and into the
Asia Pacific region.

The facility is a multi-product soft beverage plant located at the MM2100 Industrial City in Bekasi Province, West Java, where a ground-breaking ceremony took place yesterday. It is strategically located, just 25 kilometers outside of Jakarta, the country's capital and its most populace conurbation.

The new company, to be known as PT San Miguel Indonesia Foods and Beverages, is 85 per cent owned by San Miguel and 15 per cent owned by PT Delta Djakarta Tbk, San Miguel's existing brewery in Indonesia. It will concentrate on the manufacturing and distribution of ready-to-drink soft beverages.

San Miguel says that the investment, the sum of which it would not disclose, presents a growth opportunity for the company and its domestic business partners. The investment aims to tap into Indonesia's huge beverage market, which has been growing at an average of 20 per cent over the past five years. As of 2003, the per capita consumption of non-alcoholic beverages in Indonesia is 46 litres per capita, which is comparable to Thailand's 44.2 litres, but falls behind consumption in the Philippines which tops 70.2 litres.

The groundbreaking ceremony for the Java facility came less than three months after a similar groundbreaking event in Thailand. The company confirmed the acquisition of the Thai Amarit Brewery at the beginning of the year, and following that it started construction of a non-alcoholic beverage facility in the Amata industry zone, about 100 km outside Bangkok.

Equally the company says it has further expansion plans scheduled within the year in Australia, Vietnam, China, and Malaysia.

The company's presence in Indonesia dates back to 1976 with a licensing arrangement to brew San Miguel Beer. San Miguel began its own brewery operations in 1993 when it bought into PT Delta Djakarta, one of Indonesia's largest breweries. Its Anker Bir and Anker Stout are currently leading brands in their segments.

San Miguel also manufactures and markets processed meats in the country through PT Purefoods Subah Indah - a joint venture with the Hero Group of Indonesia. Its Farmhouse and Vida hotdogs and sausages, cold cuts, burgers and other processed meats are available throughout the country.

On top of this the company has a plastics plant in Indonesia operated through PT San Miguel Sampoerna Packaging Industries, which produces and markets plastic crates and pallets.

San Miguel is one of Southeast Asia's leading food, beverage, and packaging company and the dominant player on the domestic market. However in recent years stagnant sales have led the company to look overseas in an attempt to reignite growth within the group. Currently the company has over 100 major manufacturing facilities in the Philippines, China, Hong Kong, Indonesia, Vietnam, and Australia and its products are exported to over 40 countries throughout the world, but outside the Philippines, the San Miguel name is rarely attributed to anything other than its global brand, San Miguel Beer.

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