Kirin rating up on SMC partnership

The largest securities firm in Japan, Nomura, has upgraded its rating of Kirin Brewery Co. Ltd. to a "buy" recomendation, saying its pursuit of M&A (mergers and acquisitions) strategy should lead to an improvement in asset efficiency.

Nomura which plays a significant role in all the key stock markets of the world noted Kirin Brewery’s acqusition of a 15-percent stake in San Miguel Corp. (SMC) which has a diverse food and beverage business portfolio and accounts for about 90 percent of the Philippine beer market.

Kirin and SMC have over 60 million hectoliters of combined brewing capacity, placing this partnership among the top five brewers woldwide. Kirin has been an SMC partner of long-standing, with San Miguel having brewed Kirin beer in Hong Kong for many years. The two companies enjoy a harmonious working relationship, and share similar values. They likewise share the same vision on international expansion and leadership.

Koichiro Aramaki, president of Kirin, said they have been impressed with the management team at SMC and its San Miguel investment is a clear signal of the importance of Asia in Kirin’s global strategy. "San Miguel has a large-scale influence in Southeast Asia and China," he said. "It is a diversified food and beverage company, like Kirin. These are the reasons for this partnership and this investment is a clear signal of the importance in Asia in Kirin’s global strategy."

Kirin’s core business in beverages include those in beer, soft drinks, liquor and wine; it also has interests in food, real estate, logistics, pharmaceuticals and agribiology. With more than 6,500 employees worldwide, Kirin operates 11 breweries, one pharmaceutical plant, seven laboratories and 17 regional offices.

Global investment banking firm J.P. Morgan likewise favorably viewed Kirin’s entry into SMC, saying the Japanese brewer could learn from San Miguel, particularly in China where SMC is profitable. Similarly, the buy-in would be beneficial to San Miguel because it would bring in financial and human capital, and new export markets could also be opened for SMC, the securities firm noted.