SMC buys out foreign partner in dairy processing subsidiary

The San Miguel Group has bought out its foreign partner in its dairy processing business for P200 million, according to a company statement submitted to the Philippine Stock Exchange.

San Miguel Pure Foods Co. Inc. (SMPF), the new corporate name of Pure Foods Corp., said it has signed a share purchase agreement with the New Zealand Dairy Board (NZDB) for the sale of the latter’s 30-percent interest in the unlisted San Miguel subsidiary Philippine Dairy Products Corp. (PDPC).

The agreement was signed yesterday between SMPF and NZDB. It is expected to close within 30 days after several conditions have been fulfilled.

PDPC, along with its subsidiary Star Dari Inc., is into the production and marketing of butter, margarine and cheese products, carrying the leading brands in the market: Magnolia, Star, Anchor and Dari Creme.

The so-called spreads business is an important contributor to the food and agribusiness concern of the SMC Group, contributing revenues of nearly P3 billion and a net income of about P250 million last year.

SMC controls 70 percent of PDPC, which was formed as a joint venture with NZDB in the late 80s. Although the divestment of NZDB – the umbrella organization of New Zealand’s dairy farmers and cooperatives, the world’s largest exporter of dairy products – can be considered a setback in the operations of PDPC, the move nevertheless consolidates SMC’s hold of the spreads business with the buy-in of its meat processing subsidiary. – Conrado Diaz Jr.