Kraft picks RP as SEA regional hub

Food and beverage giant Kraft Foods International has reportedly chosen the Philippines to be its regional hub as it expands its operations in Southeast Asia.

Industry sources said former San Miguel Corp. (SMC) executive Bienvenido Bautista will head Kraft’s expanded operations in the country.

Kraft is the food and beverage unit of Philip Morris. It is being merged with Philip Morris’ new acquisition – Nabisco Holdings Corp. which is best known for its various cookie products Chips Ahoy! and Oreo.

The expansion of Kraft dovetails with Philip Morris’ plan to invest P300 million in the country to expand its cigarette manufacturing operations.

Sources said Kraft decided to choose the Philippines as its regional hub as the country accounts for about 50 percent of Kraft’s volume in the region.

Based on Kraft’s definition, the Southeast Asian region comprises all of the ASEAN countries plus Indochina, the Indian subcontinent and the Pacific Islands.

The Southeast Asian region corners 30 percent of the Asia-Pacific business of the food and beverage unit of Philip Morris.

Meanwhile, Philip Morris is seeking approval from the Board of Investments (BOI) for its expansion plans to entitle the firm for a tax incentive.

Philip Morris’ overall expansion strategy in the region is hinged on the implementation of the ASEAN Free Trade Area (AFTA) by the year 2003.

The AFTA is intended to create a 500-million consumer market that will rival that of China.