SMC president Ramon Ang told reporters Friday night that the growth will be primarily driven by the company’s beer operations, packaging and food units.
"Next year will be a much better year. We expect a 25 percent growth in revenues," Ang said.
For this year, revenues of the SMC Group are expected to grow by more than 20 percent while profits are seen to rise by 10 percent compared with last year’s figure.
SMC earlier said it was looking at a net income of P7 billion this year or 5.6 percent higher than the previous year’s P6.63 billion. Analysts, however, are expecting SMC’s net income to reach between P7.5 billion and P7.9 billion by yearend unless the local economic and political environment worsened.
To keep posting double-digit sales growth, SMC has earmarked P10 billion for its local and international expansion next year. The company has a standby credit line of $3 billion, Ang said.
SMC’s regional expansion, according to Ang, remains on track with most of its new manufacturing plants expected to be operational by 2005.
Among the areas earlier identified by SMC ideal for its regional expansion are Vietnam, Indonesia, Malaysia, Taiwan, China and Thailand. SMC’s annual group revenue should be boosted by $300 million from sales generated in these markets.
SMC has earmarked up to $700 million ($1.23 billion) for planned acquisitions and investments in Asia, aimed at seeking offshore growth to complement its dominant foothold in the local beverage market.
It plans to make major inroads in the Asia-Pacific region to further improve its profitability and enhance shareholder value.
SMC earlier sealed a deal to acquire TTC Co. Ltd., the Vietnam-based wholly- owned agri-business unit of Taiwan Tea Corp., for $35.5 million. This is SMC’s first acquisition of a food business in Vietnam. TTC is engaged in pig farming and feed milling.
With TTC (Vietnam) as springboard, SMC said it aims to fasttrack its entry into the country’s basic and processed meats market while creating a stronghold in its growing animal and aquatic feeds market.
Apart from this, SMC had also purchased a $20 million industrial complex in Amata City, Rayong from Thai real estate developer Amata City Co. Ltd.
SMC’s expansion in Thailand involves the manufacturing of various products from beverage, processed food to feeds. The plant is expected to be operational in 2005.
SMC views Thailand as a strategic investment site due to its huge beverage market, competitive investment and tax incentives, well-developed infrastructure and proximity to other target markets like Cambodia, Laos and Myanmar.
At present, SMC is in talks with Malaysian conglomerate Lion Corp. for the acquisition of the latter’s breweries in mainland China. It is also making a pitch for Vietnam-based Coca-Cola Indochine Pte. Ltd.
The Lion Group has 11 joint brewery plants in China with a total production capacity of 1.6 million tons per annum.
To support its bid to become a major regional player, SMC is eyeing to buy out or at least own a controlling interest in Coca-Cola Indochiine, which has 65-percent market of the Vietnamese softdrink market.
About 15 percent of SMC’s total revenues are currently derived from offshore operations, including a brewery in Australia, and breweries and packaging plants in Vietnam, Indonesia and China.