SMC sees 20% hike in 7-month sales revenues

Food and beverage conglomerate San Miguel Corp. (SMC) is expected to post a 20-percent increase in sales revenues for the first seven months of the year due to improved consumer spending, even as company officials project a better third quarter for the firm.

Company sources told The STAR that the huge growth in the January to July earnings compared to the same period last year is largely due to better consumer purchasing power that has boosted sale volume growth for most of SMC's products.

July beer volumes are projected to rise by about 12 percent compared to the same period last year, or a three percent gain for the January to July 2002 period. Given this, a year-end beer sales volume is expected to grow by five percent over last year.

While no figures were available yet, sources said softdrinks sales volume of Coca Cola excluding recently acquired Cosmos Bottling Corp., has also increased in July.

Volume gains were also seen in chicken, registering an estimated 20 percent growth for July alone as against last year and about 33 percent increase for the January to July period.

For the second quarter of the year, consumer spending rose 3.8 percent compared to 3.3 percent a year ago and 3.4 percent during the first quarter. The second quarter consumer expenditure figure accounts for over 70 percent of gross domestic product (GDP) which in the first semester climbed 4.1 percent following a second quarter GDP growth of 4.5 percent on the sustained strength of the services sector and a more upbeat industry sector.

Company officials explained that aside from better improved consumer spending, SMC’s efforts to grow volumes, maximize operational efficiencies, and optimize resources after acquiring several value-enhancing businesses including Coca Cola, Cosmos, and Pure Foods Corp. are contributing heavily to improving the company‚s bottom line.

With these businesses coming under its fold, SMC has focused on the implementation of various integration programs to realign operations, distribution, processes and systems. Part of the realignment includes the consolidation of all non-alcoholic products under Coca Cola Bottlers Phils. Inc.’s (CCBPI) umbrella and the merging of Purefoods and SMC’s food operations into San Miguel Pure Foods Co.

Officials said the resulting structure in both these segments enabled SMC to better deliver a full range of products to the consumers.

For its part, SMC‚s hard liquor subsidiary La Tonderna Distillers Inc. further refined its value proposition by focusing on its core business and a potentially profitable export market.

They also explained that the integration of the acquisitions and synergies derived from the realignment enabled SMC to further enhance its position in the processed meats, softdrinks, and non-carbonated beverage markets.