SMC set to expand Indonesia business

Food and beverage conglomerate San Miguel Corp. (SMC) is now in talks with two to three firms in Indonesia to push through with its planned expansion program in that country within the year.

SMC chairman and CEO Eduardo M. Cojuangco told The STAR last Tuesday night they are still studying whether they will form a new company or buy existing Indonesia-based firms.

Cojuangco, explained that SMC already has an existing operation in Indonesia but would need these new acquisitions to intensify their business activities in the said country.

"We are eyeing other core businesses like feed mills. We already have our brewery in Indonesia," he said. Aside from a brewery,

SMC also operates a plastic plant and a food and agri-business firm in Indonesia.

"Hopefully, we can finalize something before the year ends. After this, we would work on expanding our operations at other countries we have earlier planned," he said.

Based on the plan, Cojuangco said they would pour in at least $100 million for each country that they intend to invest in. He said that initially they will not use up the entire investment amount for Indonesia.

Before going to Indonesia, SMC already expanded its operations in two other Asian countries, namely like Thailand and Vietnam.

Late last year, the food and beverage giant announced it would allot some $700 million for its expansion program in the region.

After Indonesia, Cojuangco said they hope to look at opportunities in Taiwan and China. The other countries that SMC is eyeing for other business opportunities are Malaysia and Australia.

In Thailand, SMC signed a $20-million deal with Thai developer Amata City Ltd. for the purchase of an industrial complex in Amata City, one of the vibrant industrial estates in Thailand.

SMC’s expansion program in Thailand involves the manufacture of beverage products such as packaged water, carbonated softdrinks, carbo-natural drinks, juice, tea and energy drinks, processed foods, snacks and feed mill operations. The plant will be operational in 2005.

Last October, SMC reported the purchase of a Vietnam-based company that is into pig farming and feed milling for $35.5 million (P2 billion). SMC acquired TTC (Vietnam) Co. Ltd., after buying the 100-percent stake of Taiwan Tea Corp. in TTCV Investment (BVI) Co. Ltd. TTCV is the parent firm of TTC.

With TCC’s acquisition, SMC aims to accelerate its entry into Vietnam’s basic and processed meats market while creating a stronghold in its growing animal and aquatic feeds market. The transaction includes the purchase of all the assets and facilities on a 234-hectare leased property located in Binh Duong, the fastest growing province in Vietnam.

At present, the facility serves mainly Ho Chi Minh City (formerly Saigon) which is Vietnam’s most progressive city.

Based on the plan, SMC will continue to run the business with a 500-strong Vietnamese workforce, supported by a core management team to oversee a smooth integration.