SMC seals deal to purchase Thai Brewery assets

Food and beverage giant San Miguel Corp. has sealed a deal to purchase the brewery assets of Thailand Amarit Brewery Ltd. with the payment of 3.9 billion baht (roughly $95 million) last Tuesday.

The conclusion of the deal followed the granting by Thailand’s Excise Department to SMC on June 1 of a license to produce beer in Thailand.

The acquisition gives SMC access to the fast-growing and largest beer market in Southeast Asia. Thai per capita beer consumption is among the highest in Asia.

Included in the assets purchased are a modern and fully-equipped brewery on a 21.75-hectare site at the Pathum Thani north north of Bangkok, Thailand and a 2.4-hectare property strategically located at the Bang Po area of Metro Bangkok, which has an existing port facility.

Thai Amarit’s Pathum Thani site still has around 11 hectares that SMC can use for future expansion.

With the acquisition of the state-of-the-art brewery, which can produce about one million hectoliters of beer a year, SMC can now bring to Thailand its own beer brands.

SMC considers 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.

The acquisition likewise offers potential synergy with other SMC projects in Thailand and in the region, particularly with San Miguel (Thailand) Co. Ltd., SMC’s venture in Thailand’s Amata City (Rayong) Industrial Estate.

The Amata City venture involves manufacturing and distribution in Thailand of all of San Miguel’s product lines, including beverage products, processed food and snacks, and feed mill operations.

The first phase of the venture will be the construction of a non-alcoholic beverage facility in the Amata industrial estate, where SMC will distribute its own brand of softdrinks. The beverage operations in Thailand are expected to start in 2005.

Phase two will involve processed food and the feeds business, while the third phase will involve the packaging business.

Meanwhile, SMC denied charges made by the Kilusang Mayo Uno that the closure of its three warehouses in Quezon City, Manila, and Caloocan last June 12 was part of a plan "to abolish the employees’ union with a strong partnership with KMU".

SMC said the move completed a business decision implemented in 1993 for it to outsource its non-core activities such as warehousing and product delivery to external service providers as allowed by law.

These warehouses, SMC said, were its only remaining facilities nationwide that still employed regular employees for these activities.

On allegations that SMC chairman Eduardo Cojuangco, Jr. "ended the services of the employees without giving further notice," SMC said it complied with the 30-day notice required by law prior to terminating the services of affected employees when it announced plans to close last June 15.

SMC said the retirement of all affected employees will take effect on July 15. They will be given a separation package that is above what is required by law, SMC said.