San Miguel eyes stake in Dole Phils

Food and beverage conglomerate San Miguel Corp. (SMC) said yesterday it is seeking to acquire a stake in multinational fruit processor Dole Food Co.

"As of the moment we are interested in acquiring a stake in Dole Food Co. but there are no definitive matters to disclose," SMC told the stock exchange.

SMC did not disclose how much of the US fruit company it plans to purchase, but sources said the food and beverage giant is seeking a 24-percent shareholding in DOLE.

SMC has been actively seeking a food or beverage company to invest part of the $1 billion still remaining from its divestment two years ago of its stakes in Nestle Philippines and in the European subsidiary of Coca-Cola Amatil Ltd. of Australia.

SMC also reported a 33 percent jump in its net income to P559 million last month, sustaining a similar upbeat result in January as its core businesses continue to post double-digit growth in sales.

In a statement, SMC said the rise in net profit from P421 million a year ago could have been larger "were it not for the lower share in earnings of SMC from Coca-Cola Amatil." The company sold off its 21.5 percent stake in the Australian-based Coke bottler through a global bookbuild offering last year.

SMC's net sales revenues rose by 38 percent from P5.28 billion to P7.19 billion in February alone as its core businesses of food, beverages and packaging registered double-digit gains.

Company officials attributed the buoyant growth of SMC's "solid positioning for growth in the years ahead as a result of the organizational restructuring and synergies that management has been implementing across SMC's business units, in combination with aggressive marketing, selling and distribution initiatives."

Sales revenue on SMC's beverage business jumped 45 percent, packaging by 54 percent and the food group by seven percent.

Among the food categories, meat processors Monterey and CampoCarne achieved 20 percent and 11 percent growth, respectively; animal feeds by 31 percent; and coconut oil, a major recovery with a 269 percent sales jump. These huge gains, however, were tempered by the depressed prices of poultry due to the competitive pressures of smuggled chicken.

SMC said earlier it expects a steady 40 percent increase in its revenue in two years, driven by higher volumes in its core businesses of beer, liquor and processed food.

Last year, the country's largest privately owned company recorded at 82 percent rise in net income to P6.02 billion, on total sales of P75.6 billion. The local beer division contributed 37 percent (P28.3 billion); the food group, excluding coconut oil operations, 21 percent P15.7 billion); and the liquor and bottled water arm La Tondeña Distillers, 14 percent (P10.55 billion).

The company's business portfolio also include meat and dairy processing, packaging, real estate as well as beer brewery operations in various parts of Asia (Hong Kong, Vietnam, Indonesia and China).

The company continues to dominate the domestic beer market with an 85 percent market shares, boosted by the introduction of the Sam Mig Light, a lower-calorie drink than the flagship Pale Pilsen brand.

La Tondeña Distillers also gained headway as profits nearly doubled to P1 billion. Its share of the hard liquor market inched up to 52 percent with the launch of Bravo Rum, a sweet smooth 80-proof rum made from premium alcohol, while its bottled water business consumed 54 percent, up from 20 percent in the previous year due to its acquisition of the Wilkins brand and Metro Bottled Water Corp. from Metro Pacific Corp.

Backed up by over $1 billion cash chest from the proceeds of its sale of its interests in transnational companies Nestle and Coca Cola, SMC has been on the look-out for buying opportunities and takeover targets in its bid to strengthen its hold on its core competencies led by the food and beverage businesses.

The company is also reportedly working a deal to acquire local juice maker Sugarland, the maker of the Eight-O'clock brand of juices.

The company, however, categorically denied that "it does not have anything to do with Splash Manufacturing," another local company rumored to be another takeover target by SMC. Splash manufactures a complete line of personal care products such as soap, hair, facial and body lotions.