San Miguel considers expanding beyond Asia

Related tags San miguel Philippines Southeast asia

San Miguel says it is looking to expand its food and beverage
business outside of the Asian market, building on moves introduced
earlier this year to extend its business beyond the domestic market
and into Asia. Simon Pitman reports.

According to the Philippine Daily Inquirer, an unnamed company executive said the company is conducting individual studies to access the feasibility of two possible acquisitions - one in the US and one in Australia. The report said that neither company could be identified.

Both are thought to be substantial businesses, with the Australian business having a turnover of $1.5 billion annually and the US business having annual sales of $5 billion.

"The company confirms that in line with its expansion programme, it is studying opportunities not only in Asia-Pacific, but even in other countries,"​ the company said in an official disclosure to the Philippine Stock Exchange, and in direct response to the newspaper report.

San Miguel​, of which Japanese brewer Kirin has a 15 per cent stake, is currently by far the largest food and beverage retailer in the Philippines. However, its results in the domestic market have started to stagnate, caused by a lack of opportunity for further expansion.

In an effort to address this situation the company announced a regional expansion programme in April this year, which aims to make the company a top player in the Asia Pacific region.

"Given the demographics of overseas food and beverage industries, we see enormous potential for our products in Asia's emerging markets and have set our sights on the vast regional opportunity in convenient beverages and food,"​ CEO Eduardo Cojuangco said at the time.

At the beginning of this year San Miguel acquired a brewery and other related assets in Thailand and also commenced the construction of a soft beverage facility in an SMC manufacturing complex there. At the end of 2003, the company also purchased a leading feeds producer in Vietnam and in July this year it started construction of a major beverage production facility in Java, Indonesia.

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. In 2003 it had a turnover of PHP148 billion.

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