SMC's food group maintains growth

The San Miguel Food Group (SMFG) sustained its growth momentum in 1999, with aggregate net income minus the coconut oil business, rising 240 percent to P439 million.

Continued productivity and cost improvements, better management of working capital, and lower interest expense buoyed the group's performance. San Miguel Foods Inc. (SMFI), now practically debt-free, increased its net income by nearly 18 times. SMFG's spreads business' net income also increased by 189 percent and Monterey Farms Corp.'s by 40 percent.

Volume improvements were attained in basic and value-added meats, processed meat, dairy products, and B-Meg feeds. These gains were maintained last January with year-ago increases of 8 percent for basic meats, 29 percent for processed meats, 4 percent for spreads, and 41 percent for feeds.

SMFI's operating income rose 10 percent to P453 million last year from P411 million in 1998. Magnolia Chicken, sustaining its premium position in the retail segment and remaining as the dominant supplier to the country's fast-food chains, realized a 3 percent volume growth in 1999 versus the previous year. B-Meg Feeds posted a 12 percent growth in volume through an intensified sales drive that resulted in greater market visibility and penetration.

San Miguel CampoCarne posted a 22 percent growth in sales volume boosted by higher sales of Valiente and Moby hotdogs, and the introduction of new products.

At Monterey, revenue rose 7 percent to P2.68 billion as a result of slightly higher volumes, better selling prices of basic pork and beef and a significant sales volume growth in value added meats. Improvements in the company's distribution channels customer service, product quality and availability contributed to a 21 percent volume growth of value added products.

Revenue of SMC's spreads business grew by 10 percent to P2.7 billion as Philippine Dairy Products Corp. (PDPC) had an 8 percent volume growth, attributable to a 12 percent improvement in the margarine business. Star Margarine Swet Blend boosted market share to a record 93 percent. The cheese segment rose six percent in 1999, as PDPC continued to dominate in the food service industry.