SMC to put up P1-B plant for value-added products

Food and beverage giant San Miguel Corp. has earmarked at least P1 billion for the establishment of an industrial park to house its manufacturing plants for value-added food products, including ice cream, noodles, and snack food.

In a disclosure report filed with the Philippine Stock Exchange, SMC said it is building the multi-product industrial park near its Coca-Cola bottling plant in Sta. Rosa, Laguna. SMC said besides the ice cream plant, two other food facilities will be constructed at the industrial park but did not name them.

Sources said SMC is looking at trying its hands on the lucrative noodle and snack food business as it positions itself to be among the top 10 largest food and beverage firms in Asia by 2007.

An analyst at a local brokerage house said SMC’s entry into these businesses bodes well for the company as this would mean more profits considering the strong demand for these products.

SMC chairman Eduardo Cojuangco Jr. earlier disclosed that the conglomerate was eyeing a comeback in the ice cream business under the "Magnolia" brand as the non-competition agreement with Nestle Philippines ends.

"The option and opportunity for San Miguel to re-enter the market is open, as in the minds of consumers, Magnolia ice cream never left the market. People have always known Magnolia as a quality brand of ice cream. Loyalty to the brand is strong because it is part of our heritage," Cojuangco said.

SMC ceased its ice cream business in 1998 when its joint venture partner Nestle Phils. bought out its stake in a company they formed in 1994. The joint venture company was fully merged with the Nestlé Company and in 1998, Nestle Philippines became a wholly-owned subsidiary of Nestle S.A.

SMC’s Magnolia currently manufactures and markets butter, cheese and margarine. It accounts for nine out of every 10 non-refrigerated margarine products in the Philippines and four out of every five refrigerated margarine products.

In 1998, Magnolia completed a nationwide distribution selling system that made Magnolia products available in all parts of the country.

The industrial park is part of SMC’s P15- billion massive expansion and modernization program over three years in the Philippines.

"We aim to continue to grow in revenue and income by double digits, and we believe the Philippine economy is strong enough to stimulate the growth of consumer goods companies like San Miguel," Cojuangco said.

Under the program, SMC will build an alcohol distillery in Misamis Oriental. The plant which will be built over a 100-hectare property that SMC will lease from the Phividec Industrial Estate, is expected to produce up to 75,000 liters of hard liquor per day.

SMC is also expanding and modernizing its breweries in Polo, Valenzuela and in San Fernando, Pampanga to tap the expected continuing uptrend in beverage consumption.

Around P5 billion has been earmarked for the development of feed mill plants in Bataan and Misamis Oriental, a broiler farm in Bulacan as well as hog farms in Bukidnon and Tarlac where San Miguel is also setting up a pet food plant and a veterinary medicine facility.

SMC is scheduled to inaugurate this year its Pure Foods Hormel Plant in Cavite as well as two Pure Foods’ facilities in Batangas, a flour mill and flour blending facility.